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Tesco prepare to take on eBay and Amazon

By Chris Dawson November 20, 2010 - 3:34 pm

News is out that Tesco are the latest to announce the launch of an online marketplace to compete with eBay and Amazon. The marketplace is expected to launch in the summer of 2011, it was hoping to launch the site this year but wants to make sure that the technology behind the site is fully tested and working.

Retail Week who broke the news say that the Tesco Marketplace is likely to include all Tesco non-food categories including toys, games, electricals, furniture and clothing and has already had conversations with other retailers regarding selling on their new site.

The big questions for online merchants is just how to spread their inventory across the plethora of sites which exist already or are due to open. Sellers already list on eBay, Amazon and your own website in the UK and on International sites. Other options inlcude Overstock, Etsy, Play.com, Pixmania, Rakutan, PriceMinsiter and now the new sites due to open which include Asos as well as Tesco in the UK.

The only solution for larger sellers is it use management tools such as ChannelAdvisor or eSellerPro but will these companies add in support for marketplaces like Tesco?. For smaller sellers who can’t justify these solution the dilemma is whether to dilute their inventory by listings on multiple sites or to concentrate on eBay and Amazon and miss out on potential sales.

One interesting quesiton is what payment methods Tesco may opt to accept. Will they embrace PayPal and maybe Google Checkout or will they accept payments through their own website billing and disburse payments to merchants at a later date similar to how Amazon operate?

If Tesco link their marketplace to their existing ecommerce operation then the potential for sale will be huge. Tesco has around a 30% marketshare in the UK and has stores in 14 countries around the world. Tesco do of course already sell their own products on eBay, currently with over 800 listings live on the site.

  • northumbrian
    9 years ago

    great news competition for ebay can only do us good

  • Warren
    9 years ago

    As Tesco are the biggest retailer in the UK and yet they are still not to big to sell on eBay, I wonder how their marketplace will fair considering they already have their own on-line presence and yet they still use eBays brand to sell their products. I would have thought eBays and Amazons main threat for the future would be from Asia where everything seems to be made. They could made it and sell it directly from an Asian ternative like allibarba.com. If I was eBay I wouldn’t worry about Tesco to much. Even if they let you use your clubcard.

    • edwina
      9 years ago

      Ebay should be worried, Amazon maybe not.

      Tesco dont get much wrong, maybe the housing move, the rest not much

      Another area to sell FANTASTIC!!!!

    • Maximus
      9 years ago

      Tesco have been on eBay for over a year trading as Tesco Outlet

    • fozz
      9 years ago

      If Buyers want next day delivery between 1 & 3 pm , you aren’t going to get that direct from china or india. Now from Tesco , thats a different matter…
      Look forward to seeing more details on this.

    • 9 years ago

      When I first saw the item I decided to go and have a look at Tesco’s ebay site. Only a limited number of items spread across a number of different product lines. I would say a classic “sticking your toe in the water to see how warm it is”. In other words just an experiment. Obviously if they are now seriously talking about their own equivalent to ebay or amazon the experiment succeeded. In regard to the point about payment Tesco already have a Banking arm and they have been looking at becoming a fully fledged Bank so what could be more natural than looking at all the available examples and that includes Paypal. So maybe a fully fledged Bank that operates as a Conventional Bank but has within it the Paypal type operation as a Division of that Bank. Now that would really be competition for the ebay/amazon/Paypals of this World. Also Remember that Tesco do not only operate in the UK so it could be rolled out over a much larger area(including China where Tesco have Stores)

  • 9 years ago

    i think this is fantastic news, hopefully they should have auctions too.

    hate em of love em Tesco is still a UK based operation unlike ebay,

    More competition is better for consumers all round. (eBay doesnt class sellers as consumers they class them os operators or users BTW)

    Best news ive heard in ages. I will be signing up right away.

    eBay invited Tesco to sell on its platform they saw it was such a poor platform now they are going to take em on

    ironic isnt it

  • 9 years ago

    One area of possible concern might be if it is going to be an Auction Site or just designed around Tesco selling their own brands at fixed prices. After all if you go into your local Tesco the price for each item is clearly marked. There is no facility to haggle. Obviously if there is no Auction Facility it will limit its use for those why mainly sell in this way. However Tersco have a reputation built up over many years of always getting everything right in their new ventures. So until its final form is clearly known then all the other sites should be worried. If it does include the provision for Auctions then as it will be clearly advertised in every Tesco in the land there is likely to be a great deal of interest and obviously if it takes off it will have the effect of kicking the legs out from under all the other sites including ebay and Amazon. Perhaps if traders are only able to cope with one site then it could be that Tesco will be that site.

  • Steve P.
    9 years ago

    Anything that will make ebay appreciate and treat their sellers better is allright by me.

    Some serious competition, in the auction sector is way long overdue…

  • 9 years ago

    Load of cheap junk from China.Cheap tat that does the job but only for a short time.
    Mind you,if it sinks ebay I’m all for it.

  • Gary
    9 years ago

    If its a Tesco auction site then it will take off in the UK and be extremely stiff competition for eBay. Over half the UK population visit a Tesco store at least once a month so it will get big promotion.

    If they don’t do auctions then eBay won’t have too much to worry about (IMHO).

  • Warren
    9 years ago

    They could link the site it to Tesco Mobile.

  • 9 years ago

    Tesco had 98.8% feedback on ebay on 1 day latter they are now on 99.8% again.

    Their feedback is being manipulated i think !

    • Cambridge_Blue
      9 years ago

      Spot on!
      They won’t kick you off but simply source the same product (or very similar) and price you out if they think the market segment is attractive enough for them.
      Sounds familiar …… see Amazon for details lol.
      pip pip

  • bob hoskins
    9 years ago

    they will use it as a test to find out the best selling products then get rid of 3rd party sellers and sell the items themselves-every little elps

    • 9 years ago

      The traders who have most to fear are those selling high volume items. Obviously Tesco could very well be interested in monitoring the high volume items and perhaps doing exactly as bob hoskins suggests. However in my case I sell Books. Years ago there was a saying in the Book Trade. “The Average Book Shop Sells of the Average Book 3 copies”. I distributed Books for a while and the number of Bookshops that would look at the Book I was offering them and then order 3 copies. It did not matter if it was local or on Aberdeen the order was 3 copies. Go into a Bookshop today and on many shelves you will find 3 copies of a title. Tesco will not be interested in such low numbers but if your items sell in the thousands you could be in trouble. As a matter of interest sales on ebay tend also to be in the region of 3 copies per title so ebay is about the equivalent of a single traditional Book Shop.

  • Gary
    9 years ago

    Who says Tesco are going to offer any of their own product through this channel?

    They already have a website.

    All that is rumoured is that they will have non food catagories that match what they already sell.

    Lets all hope they have auctions for used gear and that the fees are 5% or less with no listing fees.

    • Davey
      9 years ago

      I believe listing fees are required to prevent a site like this being filled with cack and tat and items priced at crazy prices.

      Im hoping they are gonna move into motoring too.

  • 9 years ago

    Howdy,

    eBay is trying to be Amazon in many ways after that beat up from Wall Street a few years back (single listing, multiple sellers, single carts again etc…)

    There is a lot of focus in the previous comments regarding competition for ‘eBay’, but I think is not going to be the case, but a direct take on Amazon.

    If it was me, I’d duplicate the Amazon marketplace, its far more lucrative and if you can instill even 50% of the trust that Amazon logo has to the Tesco logo as an online marketplace (which other sellers sell upon), then it’ll be a winner.

    I’ll be exceptionally surprised if its not a bolt on to their Tesco Direct site, http://direct.tesco.com/ but we’ll see soon enough.

    I certainly hope they open up an API and at least have a file loading system that does not lag for hours like Amazon’s can do at times, they’d be insane not to do this. As again I am suspecting it’ll be a barcode based system not to dissimilar to Amazon and very little like eBay.

    Anyone taking bets who software platform has been given access or being consulted on integrations? Its unlikely to have got this far without some planning 😉

    Anyway, we’ll see shortly.

    Matt

  • Jack
    9 years ago

    Hopefully it will be set prices only and not auction. Stringent vetting of marketplace sellers would also be good, especially for Tesco I would have thought, if they want to keep their current reputation.
    Amazon are already muddying their reputation by allowing too many unprofessional sellers and poor listing tools.

  • 9 years ago

    There is one point thast I am surprised that nobody has picked up on and that is the bit about making sure that the software is fully tested and works. From my point of view it would be a pleasant surprise to find this as ebay often gives the impression that its software is held together with chewing gum and string. Also whenever ebay “improves” anything you can almost be certain that it will not work and they have to have several goes at it before they find all the bugs.

  • Warren
    9 years ago

    Going by what most of you say, you’ve all been selling on eBay for ages and that eBay is not what it used to be. Thats because eBays competition has improved. If Tesco sets up a market place this will add to the competition and dillute everyones sales further. I think its more negative than positive for everyone if Tesco opens up a marketplace, unless your a share holder in Tesco who wants a few more pennies with their dividend.

    eBay are only trying to keep up in a changing world and I don’t think they deserve all the negative comments. If you want to sell successfully on eBay you have to change with the times. Some of your operations may not be compatable with eBay for TRS but thats up to you to address. Tesco are only going to charge you to sell via them so you’ll have to sell more to make a profit selling on Tesco as well as all your other channels. More channels I think means more competition with more sellers dilluting sales. But can Tesco make it work for them?

    • 9 years ago

      Thats just it. I think that we are all looking for the perfect site. One that provides us all with masses of customers and no hassle and where the charges are fair and reasonable. So lets say that the Tesco Site does prove to be it. The next question is Do we continue to Trade on other Sites as well? The obvious answer is it will depend on where the buyers go. So if the New Tesco Site is heavily Marketed in every Tesco Store and on TV and Radio and in the Press guess where the buyers will go-if only to have a look at it. So lets say that the new Tesco Site attracts masses of buyers would you stay with ebay etc? I will not try to answer the question except to say that when I see the Tesco Site I for one will be looking at it very seriously and if it is the perfect site I may very well move my activities. But then thinking about some of the other postings I will be putting all my eggs in one basket if Tesco did decide to enter everbodies markets.

    • Warren
      9 years ago

      I agree, more competition will only benefit buyers not sellers. As there will be more sellers on more selling plateforms it will be even harder to attact customers to your own internet outlets.

    • Cargo365
      9 years ago

      Boosting Club card points via a large selling bonus will attract those sellers into Tesco taking customers away from the other supermarkets.
      Tesco could also take some of the parcel delivery market. Using the main or conveinence stores as Post Offices, the daytime delivery vans can run the pacels overnight, and then passed on to a local multi-drop courier such as DHL.

  • 9 years ago

    Managing multiple selling platforms like ebay, amazon and website are easy if you use a program called linnworks.
    It manages your stock across multiple platforms, so adding tesco to it wont be a problem at all.
    It IS only a stock management tool though, so wont produce listings for you !
    Personally I cant wait for someone else to come in, even if it is blooming tesco !
    Ebay needs a good kicking to make it start caring about its SELLERS !.

    • Old Hand
      9 years ago

      The money enters the chain from the buyers not from the sellers. Know your place, you sell on eBay you are dependent on the eBay middleman.

      Think how Apple is whopping Microsoft, Apple sells to consumers, MS sells to business (and developers aka business). eBay used to sell to consumers, now they sell to business thanks to the corporate wonks from Bain & Co. That is their downfall. As they try to sell more and more to bigger business the small/medium sized business gets squeezed and their payments used to subsidise big biz.

      There’s something weird about selling on eBay, when people start selling they seem to forget what it is like to be a customer!

  • 9 years ago

    I was watching an item about Supermarkets. Apparently the average Supermarket has 45,000 differant products on sale. In addition it costs many millions to find a suitable site and get planning permission and eventually build and open the Store. Perhaps Tesco has another thought in mind. It dominates the Conventional Store Market. So many have projected that in a few years that Online will exceed the High Street(including Superstores) perhaps Tesco is thinking 5 or 10 years ahead. If they dominate the online even if it is only in non-food(although how long will it be before food is included as well?) as well(and we know that they are looking at becoming a fully fledged Bank) then the World certainly is their oyster.

  • Warren
    9 years ago

    I don’t know about Tesco. With Tesco Direct I think the Argos brand is too strong. I don’t see too many e-mail addresses with my sales with a tesco.com in there so maybe Tesco internet is not doing to well. The big brands have the mobile market tied up. The Tesco brand to me seems to speak supermarket and I find it hard to place certain things with Tesco even though I know they do them, I’d still use a brand associated to a certain product.

    Most supermarkets have a banking presences but the banking brands are too strong. Maybe Tesco are putting their fingers in all the pies and hoping for the best, put I think a lot of people are against them as they view them as too big and dominant, calling a place a Tesco Town is after all viewed as negative by people who dislike the brand and blame Tesco for killing the high street. It will be interesting to see if they can make it work but I feel eBays brand is too strong. I wish I had a strong brand.

    • 9 years ago

      Tesco Town means that Tesco totally dominates the local Supermarket situation usually by having multiple sites and owning and controlling other possible sites so stopping other Supermarkets getting a foothold. But the situation is changing and I suspect Tesco are looking years in the future. Lets go back a few years Tesco had Town Centre Supermarkets. Then over time these were closed and Tesco developed the big out of town Supermarkets with Petrol Stations and huge Car Parks. Perhaps they have now projected what we are going to be doing in 5 or 10 years hence and the Conventional Supermarket is declining in importance. It could be left with large numbers of very expensive sites that have years of life left in them but are only really valued at Site because nobody still wants Supermarkets. So a site that cost say £20million to develop might only be worth £1million. But Tesco are still ahead of the game and have come up with a new use for them(or a proportion of them) Distribution Warehouses. We buy from Tesco online a mix of food and non-food and it is delivered to us from the nearest centre that used to be a Tesco Superstore and is now a Warehouse. So we order by 1pm and by 5 pm one or perhaps 2 vans are delivering the goods(1 for food and 1 for non-food). How could we going through the Post Office or a courier compete with service like that. We pay not by Paypal but by Tesco’s own Bank and get masses of Clubcard Points. It could be not a Tesco Town but a Tesco Country(indeed World) and all of us and ebay,Amazon and Paypal will be but dust. Or am I thinking far too far in the future? In regard to comments about other brands remember that Tesco have not always been the biggest in Food Sales. Its not that long ago that they were much smaller than Sainsbury’s now look at the respective positions.

    • Warren
      9 years ago

      All major supermarkets deliver to your door already, Tesco, Asda and Sainsburys have delivery drivers, but I’m not sure of Morrissons. You can buy on-line or instore and get it dropped off.

    • 9 years ago

      If you went back to the 1960’s and 70’s there were regular pronouncements on such as Tomorrows World about how we would live in the future. The fully automated house and working from home and everything that we could ever want available to us at the push of a button etc. Well we are not there yet although we are getting close in some areas. Yes Tesco and the rest have delivery drivers and I am sure while shopping in Tesco you will have seen the member of staff wheeling a barrow round picking the items off the shelf that the delivery drivers will later deliver. But I suspect that Tesco are thinking way ahead of that. They are thinking about 2015 or even 2020 as Tomorrows World was thinking 2000. One problem could be that even today many shoppers still want to see the item before they buy. That could be why the TW projection of 2000 has so far not arrived in total. Mrs Smith still wants to pick it up, feel it and in the case of clothes wants to take it into the fitting room and try it on. But perhaps Tesco are thinking that the next generation of shoppers, those that are growing up now will be happy to buy everything online and the Tesco Staff wheeling the barrow round Tesco picking the orders just will not cope with that. They need specialist warehouses and a comprehensive site and if it welcomes you and me as sellers than maybe, just maybe it could be the place to be.

  • Old Hand
    9 years ago

    You have no commitment/leverage trading with a goliath, next fuel strike, power outage, snow on the motorway, Tesco don’t deliver and tough s**t. Use your local traders, yes they still are there, they value your custom, often beat the big stores prices (no fat cat bonuses to pay out of your purchase price) and if there’s a problem there’s a face to face resolution a few yards/miles from your door rather than an obscure customer service (sic) call centre somewhere between West Africa and Malaysia.

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