) ratcheted up the competition for speedy delivery service with its
acquisition this week of Shutl, a four-year-old venture
capital-funded start-up based in London that offers "same-hour"
delivery service, or as close to it as is humanly possible.
Its biggest rival could have told eBay that fast delivery is one
tough business nut to crack, and it's not cheap, either.
Ironically, eBay's announcement came within hours of word from
) of its first-ever increase in the minimum purchase requirement
for its Super Saver free shipping service. The minimum purchase is
now $35, a $10 jump.
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EBay's acquisition of Shutl will help the company expand its eBay
Now delivery service, with a goal of adding more than 20 cities in
the US by the end of next year.
EBay Now serves the San Francisco Bay area, New York, and-as of
this week-Chicago, where it reportedly has already adopted Shutl's
logistics system. Shutl operates in New York as well as about 50
towns across Great Britain.
EBay is clearly betting that the start-up has devised a system that
makes it possible to provide fast door-to-door delivery at a
In sharp contrast to Amazon, it's a system that allows eBay to
stick to its time-honored strategy of keeping its hands off the
goods, and serving primarily as a middleman between seller and
EBay Now, in its current form, uses a network of couriers to pick
up and deliver purchases from participating merchants, including
), for a fee of $5.
It's impossible to imagine this service not losing money on every
single transaction. The merchants, and the areas each serves, are
limited, but the service still doesn't stray far from the dot-com
days of pie-in-the-sky free delivery.
Shutl has worked out a different system,
according to Wired.com
. Rather than hiring its own couriers, it piggybacks on existing
delivery services in each area it serves. It tracks the real-time
locations of their trucks (or bikes or motorcycles), and the
available space on each. It matches up new orders and available
couriers, and gets the goods delivered as an add-on, either as soon
as possible or within a one-hour window.
Shutl also limits its available retailers, with a current list in
the UK that includes names like the department store chain Argos,
fashion chain Oasis, and footwear seller Schuh.
With this latest acquisition, eBay continues to edge into territory
dominated by Amazon.com. Built as the ultimate online auction site,
eBay has been moving steadily into fixed-price goods, and building
its list of big-name products and retailers in key areas.
Amazon's massive expansion of its warehouses coast to coast was
designed to increase the speed and efficiency of its delivery of
the most popular items in its stores.
But its Super Saver program was designed to encourage customers to
buy more, and more often. The increase in the fee may be intended
to move more customers toward Amazon Prime, its membership program
that includes free shipping on many purchases. The Amazon Prime
price remains unchanged, at $79 per year.
Both those programs aim for second-day delivery-fast enough for
most shoppers most of the time. But Amazon also is dabbling in
Amazon Fresh tested same-day grocery deliveries in Seattle for five
years before branching out to Los Angeles last June. In its
quarterly conference call on Thursday, a company spokesman said
Amazon Fresh customers were adding more non-grocery purchases to
their orders because of the same-day service. No real numbers were
given, though such a trend could justify the service, even if it
just breaks even.
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