December 10, 2013, 11:58 AM

Magento offers retailers more services as part of eBay Enterprise

Clients can now purchase other eBay e-commerce technologies in a bundle.

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After acquiring e-commerce software provider Magento in 2011, eBay Inc. last month officially brought it into the fold of its e-commerce technologies division eBay Enterprise. As part of the division, Magento clients may now purchase from eBay a bundle of e-commerce technologies and services, including order management, customer service, payment processing and fulfillment.

“We can offer the full set of services to launch a web site, all from a single partner that is proven to be able to deliver,” Magento CEO Roy Rubin says. He notes that some of the world’s largest retailers—for instance, The Estee Lauder Cos. Inc., which had 2012 web sales of $512 million according to Internet Retailer estimates—are eBay Enterprise clients. “It’s a lot more simple and effective, and we’ve got the full spectrum of capabilities to meet all their needs.”

Although Magento also boasts clients with more than $500 million in annual sales, it is well known for providing a free version—the Magento Community edition—that any retailer can download and begin using, as well as an on-demand version that retailers can use to host a web store for as little as $15 per month.  Larger clients, on the other hand, pay $15,500 or more for an annual software license to run the Enterprise edition on their own servers.  Over the years, Magento has been gaining more mid-sized and larger merchants, Rubin says. Magento has 2,642 Enterprise edition customers and more than 208,000 Community edition customers, he says.

“What we’ve seen as we move into the mid-market is the needs of those retailers and brands is more inclusive of back-end capabilities,” he says, Those back-end requirements, he adds, generally involve enabling retailers to manage customer orders and fulfillment, along with financial and inventory records, across retail channels to sell better between stores, the web and mobile devices. For example, retailers can use eBay Enterprise technology to let customers engage in “omnichannel commerce,” such as placing orders through a web site or mobile device and arranging for pickup in a local store. EBay Enterprise, formerly known as GSI Commerce, which eBay acquired in 2011, also includes technology and services such as customer relationship management and multiple forms of online marketing.

Peter Sheldon, an e-commerce technology analyst at Forrester Research Inc., says the collaboration between Magento and eBay Enterprise will specifically address the ability of retailers to manage operations and serve customers across retail channels. “The main benefit will be the ability to simplify technology provider relationships by sourcing both technology and services from a single end-to-end provider that is 100% focused on omnichannel commerce,” he says. “This will appeal to firms that today struggle to manage a complex set of different technology vendors, consultants, agencies, systems integrators and service providers.”

Moreover, though Magento hasn’t yet announced pricing for the newly bundled services, merchants can expect it to be highly competitive with other vendors, Sheldon says. “The real savings will come from reduced implementation costs as clients are able to leverage pre-built integrations between all the components from eBay Enterprise,” he says. By deploying technologies that already work together, retailers will not have to spend money on systems integrations, which can sometimes cost more than the technologies themselves.

24 retailers in the Top 500 Guide and six in the Second 500 Guide report that their e-commerce platform vendor is eBay Enterprise.  17 in the Top 500 and 48 in the Second 500 say Magento. 

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