eBay and UPS Unveil Shipping Pact

Online auction leader eBay (Nasdaq: EBAY) said Wednesday it has begun to give its users direct access to United Parcel Service shipping options through the eBay Web site.

The partnership, which UPS called the first integration of a shipping company into an e-commerce site, is designed to make it easier for eBay users to ship packages — often a hurdle in completing consumer-to-consumer auctions. A link to the UPS Service Center within eBay can now be found on eBay’s home page.

eBay vice president Jeff Jordan said the agreement will “reduce the transactional friction” that auction users often experience.

Financial terms of the deal were not disclosed.

Ship Shape

The UPS section of the eBay site will enable users to calculate shipping costs, arrange for package pick-up and drop-off, print labels, and track packages. The shipping center will be accessible through several different links on the eBay site, the companies said.

“We can simplify the decision for them,” UPS vice president of e-commerce Ross McCullough noted.

eBay buyers and sellers are left to hash out shipping arrangements as part of the post-sale negotiations that eBay essentially stays out of.

In the past, the auction site has offered links to MailBoxes Etc. — which offered discounts for eBay members — and Stamps.com’s iShip service. The UPS deal appears to trump those offerings by establishing a presence within the eBay site.

Ship To My Lou

While the thrust of the agreement seems to be aimed at simplifying the lives of eBay’s users, the deal also underscores the importance of order delivery in the e-commerce business.

Though often an afterthought, shipping operations are crucial to the success of e-commerce companies. That fact was underscored when Credit Suisse First Boston analyst Jamie Kiggen went undercover last month, taking a job at an Amazon.com distribution center to get a first-hand look at the operations.

His mostly favorable report on the shipping side of the company gave Amazon’s stock a brief boost.

Shipping for Businesses

Also on Wednesday, eBay said it will expand its offering to small-and medium-sized businesses through a partnership with CAM Commerce Solutions (Nasdaq: CADA).

CAM will enable retailers to plug into the eBay network. The Fountain Valley, California-based company becomes one of the first companies to license eBay’s Application Programming Interface.

eBay announced in November that it would license its auction technology as a way of accelerating development of wireless access and other technologies.