EBay (NASDAQ:EBAY) has announced plans to join forces with shipping company FedEx (NYSE:FDX) to offer discounts and in-home label printing to merchants doing business on the world’s largest online marketplace. Both parties are teaming up in the effort to combat retail and e-commerce giant Amazon (NASDAQ:AMZN) and its sprawling delivery network.
The partnership will allow eBay sellers to print shipping labels from the convenience of home, versus having to physically acquire labels at a FedEx store. Furthermore, vendors will enjoy shipping discounts of up to 37 percent, as FedEx tries to snatch up a greater share of eBay’s delivery business.
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The union between eBay and FedEx is just another example of the vast and powerful influence of Amazon driving changes in the landscapes of nearly all the industries in which it competes. This most recent deal stems from eBay’s need to speed up delivery times after Amazon’s Prime program – which offers members free two-day shipping at the cost of an annual $79 fee – has made rapid delivery the industry norm.
Teaming up with FedEx will hopefully encourage the growing trend of eBay merchants offering their buyers free shipping, another goal eBay is pursuing to keep up with Amazon. EBay sellers provided a free shipping option on 50 percent of transactions in the third fiscal quarter, a figure that is up from 39 percent during last year’s same quarter and one that eBay is betting will continue to grow with the FedEx agreement.
“We’ve been asking sellers to meet buyer expectations of free shipping and tracking,” said eBay Vice President of Shipping Carl Gish. “It’s something our sellers have been asking for for a while, given that we have USPS and UPS. FedEx, as a major player in that space, is clearly a great partner for both our buyers and sellers.”
For its part, FedEx is banking on a spike in eBay merchants choosing its delivery service over others like UPS (NYSE:UPS) and the U.S. Postal Service to more than cover the costs associated with offering such significant discounts.
EbBy buyers and sellers should start seeing the results of the FedEx deal in the upcoming months, just in time for the busy holiday retail season.
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