eBay Sellers Say Bye-Bye to the Post Office

Giving the U.S. Postal service a run for its money, Pitney Bowes is providing its Internet postage technology to eBay and PayPal.

The Stamford, Conn.-based mail services provider Tuesday said it will integrate its browser-based product with eBay’s platform so that customers of both eBay and its person-to-person payment subsidiary will be able to calculate the shipping cost of an item with the U.S. Postal Service, pay for it and print a label from the computer.

“This is a next-generation product,” said Rudy Chang, vice president of technology integration for Pitney Bowes. “This offers the seamless experience of never having too leave the PayPal or eBay Web site.”

The system eliminates the need for special software or to create a unique registration. Once the label is purchased, both the buyer and seller can track the delivery status of the package online.

Pitney Bowes Direct, a division that serves the small business market, developed the back-end service for eBay, combining it with the PayPal service so that sellers can pay for the postage through their PayPal accounts.

“EBay customers now have an industrial-strength application,” Chang said. ” We eliminated all the barriers: there’s no registration required, no software download, no prepaid account. We have resolved the issue of having to go to the post office.”

“Shipping is a crucial piece of the transactional process,” said eBay spokesperson Jennifer Caukin, who noted that customer feedback identified it as a top issue. “With online postage, we are able to reduce the number of steps it takes to handle shipping.”

The service went live on eBay on February 12, offering priority and express mail services; more services are expected to go live within a week. Caukin said that adoption has been strong, with several hundred thousand labels printed already. The San Jose, Calif.-based e-commerce and auction platform also offers users the ability to ship via UPS.

Chang said the service took a year and a half to build and integrate with eBay’s infrastructure. While Pitney Bowes is the exclusive provider of eBay’s online connection to the USPS, Chang said his company plans to aggressively market the product to a variety of other customers.

Behind the happy news is a history of contention. In June 2002, before it was acquired by eBay, PayPal allegedly signed a deal with Stamps.com for a similar service. According to a suit filed in 2003, new parent eBay dragged its feet and never implemented Stamps.com’s software. Pitney Bowes and Santa Monica, Calif.-based Stamps.com already were feuding and had slammed each other with patent infringement suits. All their suits were settled in 2003 with five-year cross-licensing agreements, but Chang said that the eBay system uses only Pitney Bowes’ patented tech.

Pitney Bowes’ customer win of the world’s largest e-commerce business is a huge loss for Stamps.com.