Why doesn't eBay Now work?

The market demand (market size X fee or price premium) is as yet undetermined for large scale same-day or next-day delivery services. Yet ... Amazon is most likely to have good "big data" on this, based on the buying patterns of millions (billions?) of transactions and the shipping choices selected by their Prime and non-Prime customers. They can do A/B tests as frequently as they want to, by simply varying the shipment upgrade price. It follows that Amazon is in the best position to evaluate and exploit all shipping options, including same-day and next-day; and that all competitors, even as large as eBay, have a huge information disadvantage. Amazon is still a more highly respected seller than eBay; I'll bet their on-time delivery statistics beat eBay by far. And their return procedures are streamlined. Payment (including 1-Click!) is streamlined, compared to eBay + PayPal.

I think there is a combination of things at play here - and we should all keep in mind that the same day delivery market is still in its infancy. eBay Now's initial business model (1hr delivery for $5) was flawed (and costly). When people want something that fast, they value delivery over commerce, and should pay for delivery accordingly. I thought that Postmates was wrong with their business model, and people would not value delivery vs. commerce. I think this was wrong. eBay Now finds itself in some kind of an in-between situation: it has a lot of items, but not enough items. It is not  a true "Amazon"/ General Merchandise replacement, but it is not a curated experience either. As a consequence, this cannot be your first go-to place. EBay's brand of commerce is not the favorite ones among tech-saavy Gen Y folks. Google for example is way better regarded, and as Google Shopping Express carries similar stores as eBay Now while providing delivery for free, GSX has a way better value proposition (except when people favor the "now" dimension, which is, very rarely). Grocery (or food) is the killer app of same day delivery. Traditional ecommerce's killer categories were travel and media (with collectibles to a lesser degree). I think that grocery and food are the killer apps of same day delivery (with flowers and gifts to a much lesser extent). What I mean that killer apps, is that, these are categories where: You really need them same day/same hour You need them often (new buying behaviors are easier to learn with something you use every day/week) They correspond to needs (vs. wants). Traditional goods, fashion, etc.... will be the biggest segments of same day delivery - 10 years from now. But it will be way easier for an Instacart, Amazon, GSX (if this experiment continues), and, to a lesser degree, a Postmates/WunWun, to provide that service to consumers acquired and monetized with grocery/food, that it would be for an eBay to build a service from scratch and wait for that market to take off. Once people trust you and come to you every week, you can sell them more categories, like Amazon did in time.

eBay says that eBay Now isn't going away. It just seems their expansion plans are not as aggressive as they once were. I think the reality of the high cost/low profitability of same-day delivery - as well as the cavalcade of competition with same-sized pockets - may be making eBay a little gun shy. I applaud their decision to pull back now, because I don't think the business model (in its currently talked-about incarnations) is a profitable one, long term. I'm excited for the consumer (in the short term) because the Walmarts and Googles etc. will be throwing a lot of money at the model to see if it will work.

Along with some of the reason below,  I believe the main reason is because it wasn't a good fit with what they offer.  I don't think some one would expect that eBay would offer this service.  It's not really related to their business model.  To do this successfully, they would need to slowly transition their business model to involve a more day-to-day use case.