WSJ -- UPS, eBay Set Deal on Tools To Compare Shipping Costs.
June 23, 2003
UPS, eBay Set Deal on Tools To Compare Shipping Costs
By RICK BROOKS and NICK WINGFIELD
Staff Reporters of THE WALL STREET JOURNAL
United Parcel Service Inc. reached an agreement with eBay Inc. to give the Web auctioneer's buyers and sellers online shipping tools that will compare the delivery prices of UPS and the U.S. Postal Service.
The deal, expected to be announced Monday, is an important step in simplifying one of the biggest trouble spots that often stand in the way of smooth transactions between the buyers and sellers that make up the eBay marketplace. Until now, users bidding on items usually had to steer from eBay's auction pages to a package carrier's Web site to figure shipping costs. The arrangement with Atlanta-based UPS will provide eBay sellers with a shipping calculator that can be displayed on their auction Web pages.
"I think this will reduce the length of time sellers will take to figure out how to get a product shipped," said Meg Whitman, chief executive officer of eBay, of San Jose, Calif.
The calculator also will make it harder for sellers to pad their shipping-and-handling charges, because buyers will get more information during the bidding process. The UPS system lets sellers display either a flat shipping rate or the price for three different kinds of delivery by UPS or the post office, based on the bidder's ZIP code. "The top reason why [online] buyers abandon their cart before the end is surprising shipping charges," said Satish Jindel, a transportation consultant at SJ Consulting Group Inc. in Sewickley, Pa. The deal between UPS and eBay is "bringing transparency to the shipping-and-handling process."
The five-year agreement gives UPS a chance to peck away at the dominance of the Postal Service with eBay sellers, particularly on shipments weighing less than 5 pounds, according to eBay. UPS ranks a distant No. 2.
"We are happy to be compared with anybody," said a Postal Service spokesman. "We think we offer the best combination of price and service." The post office is "working on something" with eBay, he added, declining to provide details.
EBay said the deal with UPS prevents the Web auctioneer from striking similar deals with FedEx Corp. and Airborne Inc., but eBay could add Postal Service offerings to its site, Ms. Whitman said. Financial terms of the UPS deal weren't disclosed.
Write to Rick Brooks at rick.brooks@wsj.com and Nick Wingfield at nick.wingfield@wsj.com
Updated June 23, 2003
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