Imagine placing an order on your favorite e-commerce platform and receiving the package at an unexpectedly fast speed, beautifully packaged in eco-friendly materials, with the entire process feeling seamlessly tailored to your needs. This experience is powered by highly efficient and intelligent e-commerce logistics systems. eBay Enterprise is redefining the speed, flexibility, and cost-effectiveness of e-commerce logistics through its exceptional automation system integration, delivering premium experiences for both brands and consumers.
From Traditional Warehouses to Smart Fulfillment Centers
Traditional logistics considers warehousing as one of five core processes in warehouse operations, alongside receiving, picking, packing, replenishment, and shipping. However, eBay Enterprise's Richwood fulfillment center in Walton, Kentucky, challenges this conventional wisdom. As Craig Hayes, Vice President of Fulfillment, explains, warehousing here functions more like a replenishment process, with most newly received products directly placed into bins and swiftly moved to forward picking areas. This isn't a traditional warehouse but a highly efficient e-commerce distribution center specifically designed for retailers and online businesses.
"Accurate forecasting is crucial," Hayes emphasizes. "Our goal is to work closely with clients to precisely predict sales and shipping demands for upcoming months, enabling just-in-time receiving."
The Richwood fulfillment center is actually a massive fulfillment campus comprising two facilities totaling 1.175 million square feet. One facility is highly automated, featuring four mezzanine levels and a high-speed induction and tilt-tray sortation system specifically designed for handling high-volume, flat-pack apparel items. Additionally, this facility utilizes light-directed picking technology for products less suited for automation. These items are picked into totes and conveyed to light-directed put walls for order consolidation.
The second facility serves as a highly flexible fulfillment center capable of processing diverse merchandise ranging from pet supplies and consumer electronics to irregularly shaped sporting goods like kayaks and golf clubs. Across its four mezzanine levels, orders are batch-picked into carts and totes before being transported manually or via conveyor to light-directed picking stations.
Speed, Flexibility and Cost-Efficiency: Three Core Design Principles
While these two facilities differ in their fulfillment approaches, they share identical design philosophies: processes must be flexible, fast, and cost-effective. For instance, 85% of orders from this campus ship the same day, while 90% reach customers within three days—with an average transit time of just 2.37 days.
"Our entire fulfillment philosophy revolves around flexibility and speed, striving for perfection from order generation to final delivery," Hayes states. He adds that the company places strong emphasis on cost-efficiency and sustainability.
From Garage Sales to Omnichannel Fulfillment: eBay Enterprise's Evolution
For many, "eBay" still conjures images of the once-dominant online auction platform—a virtual flea market where people sold unwanted items. However, today's eBay has evolved far beyond this perception. While remaining an iconic internet brand, eBay Enterprise (headquartered in King of Prussia, Pennsylvania, and acquired by eBay in June 2011) provides comprehensive e-commerce solutions for businesses unwilling to invest in proprietary fulfillment systems.
Prior to acquisition, eBay Enterprise operated as GSI Commerce, offering not just picking, packing and shipping services, but also developing online stores for retailers, executing email marketing campaigns, managing credit and payment services, providing customer support, offering pre-shipment value-added services, and handling returns.
More importantly, the company operates in an omnichannel environment. "If a Denver customer orders a sweatshirt with next-day delivery, our algorithms determine the optimal shipping location—including store picking and fulfillment," Hayes explains. "Our focus is absolute speed."
Through value-added services, packages shipped from eBay Enterprise bear identical branding to those dispatched from physical stores. "We maintain our clients' brand integrity. End customers won't know whether their package came from a store or our Kentucky facility," Hayes adds.
The Richwood campus forms part of eBay Enterprise's global network spanning nine facilities across 7.5 million square feet, supporting order fulfillment solutions in the U.S., Canada, and Europe. In 2014, this network shipped 174 million items, with the Richwood campus handling peak daily volumes of 350,000 shipments during high seasons.
Speed and Flexibility: Addressing 3PL Challenges
Regarding facility design, eBay Enterprise faces the same questions as other third-party logistics (3PL) providers: when does automation make sense?
The market offers numerous automated goods-to-person solutions like shuttle systems, mini-load automated storage and retrieval systems (AS/RS), and horizontal carousels. However, for 3PL providers, capital investments in these solutions can be substantial while offering limited flexibility.
"Some clients sign three-to-five-year contracts," Hayes notes. "When contracts expire, the next client may have completely different product lines and SKU quantities to manage. We believe automation can constrain your SKU flexibility."
Consequently, these facilities prioritize flexibility and speed. For example, while the first facility incorporates a large tilt-tray sorter, this was designed specifically for two clients handling flat, tagged and packaged apparel items. "The tilt-tray system delivers optimal value for these products," Hayes explains.
Once orders enter the facility's warehouse management system (WMS), the tilt-tray system processes them at remarkable speeds. "About 85% of this facility's orders ship the same business day, and we operate seven days weekly," Hayes states.
However, when expanding to bulkier apparel items, eBay Enterprise implemented tote picking with conveyance to light-directed put walls.
Similarly, given the second facility's diverse product range—from pet supplies to golf clubs—its design incorporated four mezzanine levels and put wall solutions from inception. "We use RF-directed batch picking into totes on mezzanines, then convey totes to light-directed picking areas," Hayes describes.
There, workers on one side of the light wall place items into designated compartments. When all items for an order occupy one space, lights on the wall's opposite side alert packers that the order is ready for shipment. "With mezzanines and put walls, adding more tote space or compartments is relatively inexpensive if business needs change," Hayes notes.
Both facilities also demonstrate operational flexibility. With ten distinct clients and varied product lines, one building might operate slowly while another runs at full capacity managing special promotions. "We frequently shift skilled labor between buildings to scale operations rapidly," Hayes explains.
While both facilities currently use RF-directed picking, Hayes reveals plans to implement voice-directed picking systems already deployed at other eBay Enterprise fulfillment centers to enhance speed and accuracy.
Speed and Cost: Internal and External Optimization
At Richwood campus, fast and flexible fulfillment doesn't stop at loading docks. Transportation management proves equally critical for operations. The facility's location was selected not just for proximity to both coasts, but also for access to parcel shipping hubs beyond Louisville and Memphis.
"We measure speed both inside and outside the box," Hayes says. "Inside, we track how quickly we fulfill and ship orders. Outside, we measure delivery speed to consumers."
This strategic positioning allows eBay Enterprise to bypass Louisville and even Memphis, instead utilizing full truckload routes directly to destinations like Chicago distribution centers—reducing overall transit times while controlling rising e-commerce shipping costs.
With carriers now implementing dimensional pricing, eBay Enterprise closely monitors outbound carton sizes. "We've invested significant time weighing and measuring inbound inventory to optimize box sizes," Hayes explains. "When orders enter our WMS, they undergo cartonization before wave planning to identify 'right-sized' packaging."
After shipment confirmation, the WMS selects the smallest viable carton for each order. Additionally, the company implemented an on-demand box-making process for low-volume products. "Environmental responsibility represents one of our key objectives," Hayes states. "When shipping 40 million annual packages, corrugated materials become significant components." Reducing cardboard usage also supports sustainability goals.
As e-commerce continues evolving, Hayes believes eBay Enterprise remains well-positioned to meet client needs. "Competition remains intense," he acknowledges. "But with this campus, we've developed a solution enabling rapid scaling to meet customer demands while delivering exceptional consumer experiences."