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eBay tests subscription loyalty scheme to match Amazon Prime

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eBay is testing a customer loyalty program to rival Amazon's Prime initiative, offering buyers speedy delivery and free returns on items for an annual fee. The program reportedly dubbed eBay+ is currently being trialled in parts of Germany, with plans to roll out the service to the whole of the country scheduled for the second half of the year. The loyalty program is being tested with a handful of top-rated sellers, and although pricing has yet to be announced, it's thought that the annual subscription fee for buyers could be somewhere between €15 and €20 (around $17 to $22).

Participating sellers will get preferential treatment in search results

"Through this new program, sellers will have the opportunity to commit existing customers even more strongly to themselves and to gain new customers in addition," Maike Fuest, eBay Germany's director of communications, told The Street. According to the company's website, participating sellers will receive an unspecified discount on the sales commission they pay to eBay, while their products will also be "marked and highlighted" in search results.

However, there are challenges facing eBay. Unlike Amazon, the company does not have direct control over how its products are shipped, making it difficult for it to match Prime's next-day delivery — let alone its one-hour delivery service in certain cities. Fuest says that sellers participating in the scheme are responsible for shipping a package on the day it's ordered, but did not clarify whether or not there was a time-limit for when the package should arrive. Notes on eBay's site about the program suggest that orders should "usually" arrive the next day, adding that sellers are also required to offer free returns within one month of purchase.

It's clear to see why eBay would like to replicate Amazon's Prime business. Not only is its $99 subscription fee a steady source of revenue, but according to a survey published last year, Prime customers also spend, on average, 68 percent more than their non-Prime counterparts. This might simply be because heavy Amazon shoppers are more likely to sign up for Prime in the first place, but subscribers are also likely to shop more to get the most out of a service they're already paying for. Other retailers are also taking note, with Walmart announcing its own loyalty program this month with free shipping for $50 a year. As with eBay, however, even Walmart can't match Amazon's next-day shipping promises — or its range of perks, including unlimited photo storage and access to streaming service Prime Instant Video.