In an attempt to compete with other online retailers, eBay has recently introduced a Guaranteed Delivery (GD) program that advertises specific delivery dates to buyers and provides compensation when items arrive late.
Confident that buyers will ‘love’ the program, it may prove to be harder to convince sellers about the benefits of Guaranteed Delivery. Read on to discover the what, how and why of eBay’s new Guaranteed Delivery program and the benefits and disadvantages to sellers.
What is eBay’s Guaranteed Delivery program?
Guaranteed Delivery is an eBay program officially launched in September 2017 and featured in the Fall Seller update. It was rolled out gradually but by mid-October, all US eBay sellers were able to opt-in to the program if eligible. For sellers in other countries, it appears eBay intends to roll out the program further in 2018.
The idea behind the program is simple. Qualified sellers guarantee delivery of an item by a specified date. If the item does not arrive on time, the buyer is compensated for this delay. Other major online retailers have had similar programs in place for years.
Sellers who offer Guaranteed Delivery will receive, according to eBay, increased exposure and happier customers.
How Guaranteed Delivery works
Eligible sellers who opt-in to the Guaranteed Delivery program can select individual listings they want to guarantee in one of two ways:
- Handling time option – The delivery date of the item is determined and guaranteed by eBay. If the seller met their handling time and the package was scanned on time at the post office, eBay will compensate the buyer if the item is delivered late.
- Door-to-door option – This version of Guaranteed Delivery is aimed at large sellers with multi-location warehouses. Seller takes control over deciding a guaranteed delivery date (4 days or less), based on their ability to deliver to various regions and carriers’ service level by region. eBay will also compensate buyers if delivery is late with this option. Starting in 2019, it will be handled by the seller.
Note that sellers must choose one of the above options for all of the listings they want to guarantee. It is not possible to choose the handling time option for one listing and then the door-to-door option for another.
If a ‘guaranteed’ delivery is late
If an item arrives late, a buyer is allowed to submit a claimed shipping up to 30 days following the missed Guaranteed Delivery date. There are three compensation options for buyers:
- Refund on shipping cost
- A voucher for a future eBay purchase
- If the seller accepts returns, a free return label (seller must refund item)
eBay claims that it manages all customer service related to the Guaranteed Delivery program (both versions), avoiding more work for sellers. Buyers will be able to choose between these compensation options via a special Guaranteed Delivery page.
Correspondingly, sellers in the program have a new Guaranteed Delivery dashboard within Seller Hub.
If the delivery does not arrive by the guaranteed date and the seller has met all of the program criteria, there is no penalty for the seller.
If the seller does not meet the handling time, however, their late shipment percentage will be affected. Sellers are required to have a minimum of 97% of on-time Guaranteed Delivery transactions to continue using the program.
Eligibility requirements for Guaranteed Delivery’s handling time option
To be able to opt-in to the handling time version of the Guaranteed Delivery program, sellers must:
- have a minimum of 100 transactions per year
- a late shipment rate of 5% or below
Once a seller has opted-in, listings with all of the following features will automatically be activated into the Guaranteed Delivery program:
- fixed priced items
- zip/postal code in the item location
- shipped with an eligible carrier service
- same day or 1-day handling time
The Guaranteed Delivery bulk editing tool can be used to see and quickly update listings that are not currently eligible for the program. Sellers can opt-out of the Guaranteed Delivery program at any time.
Door-to-Door Guaranteed Delivery requirements
Sellers opting for the door-to-door version of Guaranteed Delivery must create their own rate tables to set regional shipping speeds and costs. There are fewer listing restrictions for sellers who use the door-to-door Guaranteed Delivery program. The main requirements for listings are:
- fixed priced items only
- shipped with an eligible carrier service
- must be associated with a rate table
Whichever version of the program a seller decides to opt into, there is a performance standard to achieve for all Guaranteed Delivery transactions:
- 97% on-time shipping
- 95% on-time tracking
Benefits of eBay’s Guaranteed Delivery program
It is reasonable for any eBay seller, large or small, to wonder why they should join the optional Guaranteed Delivery program. Here are some of the advantages:
- Low risk. For sellers opting into the handling time option, there is not a lot of extra risk or work to the seller since eBay is covering the customer service aspect and compensation program. As long as the item is shipped on time, eBay claims to take care of the rest.
- No dramatic increase in returns. In theory, sellers are unlikely to experience a dramatic increase in returns due to late delivery. Buyers do typically want an item when they purchase it, and for most people, arriving a little late will not be a problem.
- More buyers. The GD program may attract a new base of customers to eBay. When looking for items to arrive quickly, many online shoppers head to the larger retailers as they are able to ensure fast shipping. Guaranteeing arrival of an item within three days or less may make more online shoppers move away from the larger retailers and think about eBay in a different way.
- Get an edge over the competition. Offering Guaranteed Delivery on an item may improve standings over a competitor. While being part of the GD program alone doesn’t boost search rankings, buyers can filter search results to see listings with Guaranteed Delivery only.
- No extra work. eBay handles all additional customer service related to the program. It has also been promised that eBay will remove any negative feedback relating to shipping as long as the seller met their handling time commitment and the package gets scanned.
Disadvantages and controversies
There are quite a few potential seller concerns regarding the Guaranteed Delivery program. Here are some of the major issues causing disagreement.
- Third party involvement. One of the biggest disadvantages of GD is the reliance on third parties – the post office and shipping companies. Making delivery guarantees with such a heavy dependence on scans from external parties sounds a bit like a disaster waiting to happen. Technical issues happen and eBay is trying to guarantee something it cannot personally control.
- Guaranteed doesn’t really mean guaranteed. Even shipping companies, the ones that are physically moving packages around the country, cannot absolutely 100% guarantee arrival dates for customers. Sometimes things do go wrong. In reality, guaranteed means “we will try our very best.” While customers may be happy to receive a refund or credit as appropriate, eBay may be losing more customer confidence than they expect.
- What’s in it for sellers? The reward for sellers taking part in the Guaranteed Delivery program isn’t obvious. eBay claims that buyers will be “happier” and that sellers who take part will receive increased exposure. While it is true that buyers will now be able to filter their searches by which sellers offer Guaranteed Delivery, it is unknown how many buyers actually do this. If sellers in the program actually received a direct boost in search ranking, the exposure would be more tangible.
- Shipping coercion. One of the requirements of the GD program is to use specific shipping carriers. Some sellers may find this inconvenient and more expensive than working with their usual carriers.
- Eventual force opt-in? As with every new eBay program launch, a lot of people have the fear that Guaranteed Delivery will one day be mandatory for sellers. At the moment, it is an opt-in program.
- Wrong target audience? Offering guaranteed delivery makes sense for perishable and urgently needed items like groceries, household supplies and medication. These are the types of items sold by the large online retailers offering very fast delivery. With eBay sellers more likely to sell ‘discretionary’ products such as collectables and clothing, some are asking whether eBay buyers were really asking for this type of service at all.
Guaranteed Delivery: A worthwhile step forward?
The Guaranteed Delivery program will no doubt appeal to those eBay buyers who want more certainty about their item’s arrival date. Whether or not buyers will actually filter searches with the Guaranteed Delivery option remains to be seen.
eBay seems certain that this service will attract new buyers to the eBay marketplace and enable sellers to sell more items. Being in the first year of the program, it is difficult to say of the true benefit of the Guaranteed Delivery program for sellers at this point.
The handling time option does not seem to involve much more effort for most sellers but this depends on whether eBay is able to hold up their promise of handling any additional customer service issues relating to the program.
For larger sellers, the door-to-door option appears to come with a lot of responsibility, especially in 2019 when eBay will no longer reimburse buyers if a shipment is late. With the program as it is right now, Guaranteed Delivery is likely to be much more popular with customers than sellers.
What do you think about eBay’s Guaranteed Delivery program? Will you be opting-in?