I can’t comment on whether or not this is bottom-line profitable for eBay, but I do know that this is spectacularly executed. Obviously, eBay drives more bids, more sellers and more money to flow through its service by encouraging international postage, but that’s not what I want to talk about. It’s the execution that is genius.
As long as a seller shipped domestically before, almost nothing changes in the workflow to participate in this program. eBay takes on the responsibility of not only shipping the items, but also calculating the various regional prices. eBay manages customer information and sends the seller a proxy domestic address, just like a normal domestic auction. The seller posts the package to eBay and eBay ships it to its final international destination.
This means the seller only pays domestic shipping charges to eBay. eBay recoups its expenditure through the additional P&P costs that the buyer is already used to seeing.
In fact, the process is so transparent that eBay can (and is) automatically enrolling sellers into the scheme without being obnoxious. eBay isn’t asking the seller to take on any additional responsibility, so there’s no penalty for the seller to be part of the scheme.
The efficient reallocation of resources here, where eBay is pooling individuals to take advantage of its economies of scale in distribution, is just sublime. This is what you call an elegant product change.