eBay is introducing a cost-effective fulfillment service called Managed Delivery that is going to launch next year. As part of the new service, logistics centres will be set up where sellers can store their goods. Besides that, eBay wants to take care of the delivery of the packages, just as Amazon does. This new service should help sellers to reduce their workload. eBay promises lower costs and faster shipping for the deliveries. But the new storage options also come with new risks to online sellers.
Beginning only in the U.S. in 2020, Managed Delivery promises to provide shoppers faster and more reliable delivery on millions of products. Managed Delivery should also help sellers with high-volume inventory to meet rising consumer expectations while reducing costs and workload. Sellers will be able to store their products at logistics partners close to buyers in strategically located warehouses, which will also be responsible for packaging and shipping.
eBay is not owning the warehouses but will power the Managed Delivery experience through a global technology platform and third-party partners, creating a seamless end-to-end fulfillment process for sellers. The goal for Ebay is to reignite competition with Amazon. Amazon also offers such a logistics service to marketplace traders and employs partner companies for the delivery. The new service will give sellers the ability to offer free shipping buyers want with a more reliable and faster delivery promise – and hence drive their sales on eBay.
Besides the creation of a managed catalog to make it easier for buyers to find what they are looking for and the development of managed payments to offer more payment options for buyers, Managed Delivery is the third creation of eBay’s evolution to a better marketplace. Sellers with high-volume inventory who qualify for the use of Managed Delivery will have following advantages:
- Lower fulfillment costs
- Simplified logistics and faster shipping
- Increased sales
- eBay branded packaging
- Customer Support & enhanced protections on shipments
On the other hand buyers will benefit from:
- Faster delivery
- Reliablity and accurate tracking of their orders
- Free shipping
- Quality packaging through eBay
- Improved customer support
How does Managed Delivery affect sellers when it comes to VAT compliance?
Managed Delivery will be introduced in the USA in 2020. As there is no Value-Added-Tax in the US, there are no special rules to be considered by sellers using Managed Delivery within the US. Once the service will be rolled out to Europe, there are several things to consider for sellers in order to stay VAT compliant.
Any business that operates within the EU is obligated to add VAT to products and services. Local tax authorities in the EU are keen on making sure it gets collected. If Managed Delivery warehouses will be available in the EU and your goods will be stored there, you will need at least one VAT number in the country you are storing your goods in order to sell in the EU. If you will store in more than one country or if you exceed the distance selling threshold for a specific country, you need additional VAT numbers from different countries. You can store your goods in one country and sell to other countries within Europe with one VAT number, but only if you don’t exceed the threshold limit.
If you do so, you still need to apply for a VAT number in the country you passed the limit, whether you are storing your goods there or not.