Monday 15 August 2016

Online Retail has no limits, it’s freedom to sell! How can sellers handle marketplace dominance?
70 years ago, India fought long and hard for its freedom. The battle between the British and Indian people was an epic moment in history. And till today it inspires many! One may think the age of battles and disobedience movements are all behind us.
But we see this happening even in the most lucrative of opportunities, as in the case of the online retail industry. There has been a noticeable amount of friction between online sellers and online marketplaces. A simple fix to all their problems would be leaving the online retail scene. But the industry has so much promise.
To make sense of the online sellers vs. marketplaces situation, IOS spoke with different online sellers about their online retail experiences.

What drew you towards online retail?

Free will, that’s what Independence provided and these sellers exercised it by joining online marketplaces. Question is, why did they do it in the first place?

The struggles of Online Retail – What led to your frustration with online retail?

Ecommerce has changed a lot says, Saurabh Daga. “We began selling online 3 to 4 years ago. Back then everything was so different. There was less competition and the marketplace policies were not bad. Now marketplaces are lenient with the buyers and unfair to the sellers,” he explained to IOS.
The struggles of online sellers are very real. The more sellers we spoke with the clearer it became; online retail develops a new challenge every day. If it’s not with online marketplaces, it’s with the government, the buyers or each other. We collected the most pressing ones online sellers struggle with.

STRUGGLE #1 – We sold your goods but we don’t have money to pay you!

In theory, once a sale is confirmed, the buyer walks away his purchases and the seller with his earning. According to numerous sellers that isn’t quite the case!
Online seller, Jayesh Lakhani, sells on Indiaroots and Askmebazaar. He sells ethnic wear and has received 1000 daily orders, when these marketplaces engaged in heavy promotions. He says both online marketplaces owe him a lump sum for these orders, but hasn’t received any word of payment confirmation.
“Delayed payments was nothing new with these online marketplace. But now they’ve stopped making payments altogether. The marketplaces are only focusing on sales and not time to time payments.” Jayesh says.
An online seller (name withheld on request) emailed the ecommerce furniture company requesting his payment be made as soon as possible! The following are emails exchanged between him and Mebelkart:
(Courtesy of ESS)
(Courtesy of ESS)

STRUGGLE #2 – Product returns are your fault

Returns are a part and parcel of ecommerce but exponential returns is what online retailers are biting their nails over.
Jatin Bhutani, an apparel and innerwear seller says, “Canceled orders, returned order, some returned products are in very bad condition and that is a clear loss, we cannot claim for losses from all the marketplace, even the order which has returned half way that has some loss, in terms of time and packing material.”
“Let’s take an e.g., I received an order of 3 t-shirts, I ship it in good condition, and the customer returned it saying, it is not the same product he ordered and I receive only one t-shirt back instead of 3.
TOTAL LOSS = Forward shipping+ reverse shipping + cost of 2 t-shirts + packing + time and reviews, Jatin explains.
Multi-product online seller, Saurabh claims that originally shipping charges were Rs.50. Today, it has increased to Rs.70 (without including sales tax). Add 12% marketplace commissions to that and the rising number of product returns, then your profits will definitely decrease.
Another online seller, Mayank Goyal says, “As we all know, there is always a advantage and disadvantage for everything. The marketplaces are having cash crunches and they are increasing the commission and logistics cost to meet the cash crunches. Also some marketplaces are charging for RTO too.”

STRUGGLE #3 – Account suspension/closure is a weapon and we aren’t afraid to use it

According to online seller Mayank, “They (marketplaces) also penalize sellers for unfair returns whether seller is at fault or not. Fake orders, orders with incomplete address should be cancelled by Marketplaces. But to make money they are not doing it.”
Online seller Saurabh says, “There is a rise in fake buyers, product returns, and damaged goods.” He has been tweeting about his blocked Flipkart account on Twitter, for some time now.
Twitter post
When IOS spoke with him, he said he makes a claim for the Seller Protection Fund when his goods are returned. But because he’s made so many claims for SPF, his seller account has been closed.
“This is a very unfair reason,” he says with frustration. “Yet they refuse to reopen the account.”
To open a new account, Saurabh say, there are numerous hurdles he’ll have to jump over once more.
“I have to obtain new VAT/CST registration. I’m from Gujarat and to get that registration here it cost at least Rs. 50,000. There’s paperwork involved. I have to relist my products. At the start I had only a few SKUs, now I have at least 8,000 – 9,000. I’ve lost my positive reviews and ratings. I have to wait for my Flipkart account to get verified. I used to take 2 to 3 days when I first started on Flipkart, now it will take at least 30 days,” he explains.

STRUGGLE #4 – We own the platform, we make the rules

“Online marketplaces do not provide proper support. Flipkart has the worst seller support. They don’t know anything. In case my listings are not approved the first time and I upload them again the same way the second time and it gets approved!” Saurabh reveals.
Vikas Jain, a computer and mobile accessories seller, mentions that most of the time online sellers return goods without genuine reasons.
Back in April, IOS interviewed online seller Mayank Bhatia, who said the exact same. He told us that returned goods are not really accompanied with the right reasons. In some cases no reasons at all. If a product is returned and marked with the reason, “quality issue”, the seller may lose his account! But the seller cannot do much if his marketplace offers no questions asked returns.
Some marketplaces do not provide sellers with buyer contact information. This prevents them from confirming COD orders.

Despite the trouble, Online Retail has a silver lining

With the grave troubles online sellers go through every day, it’s hard to understand why they still sell online. Walking away is the path of least resistance. It can ensure peace of mind and fewer risks. So we asked them,

What keeps you from leaving online retail?

“Business changes very fast, I could be done for in the long run. But if I do things right, online retail is really very profitable. And that is what keeps me from leaving the online business. I want to make it big!”
          Jatin Bhutani
“There are pros and cons with every marketplace but you have to adjust and grow with them. A good online seller is always updated with all the policies of marketplace and changes his plan of action as and when required. Good pricing, quality image, key features and well explained description are all you need to get your product keep selling.”
          Sachin Gala
“If there are no issues with the work we do, then zeal to achieve goals and satisfaction will not be there. We always want to work hard to our full capabilities and we never give up at any time because we don’t believe in quitting. Online retail gives us a platform to reach out to a lot of buyers those who need our products.”
          Mayank Goyal
“Though the current scenario does look bleak for online retail, however, online retail has been a boon for manufacturers like us. Online retail has enabled us to connect directly to end consumers, aiding us in brand building and maximizing our customer reach. Furthermore, it has helped us to understand customer trends very efficiently.”
           Saurabh Daga

Bonus Read!

Seeking Online Retail Freedom?

Online seller, Chandan Kushwaha, a furniture manufacturer and online seller, from Delhi-NCR, tried ecommerce through online marketplaces. His ecommerce journey came to a brief halt as he was let down by not so any promising changes.
For about 4 months he registered on Urban Ladder and Pepperfry. However, due to lack of sales and massive losses of approximately 1.2 lakhs, he closed his seller accounts on both portals.
“I have dead inventory lying at home, document expenses, office set up expenses, salaries and other expenses to pay off,” says Chandan.

What went wrong and where?

“Online marketplaces have restrictive guidelines. The platforms I joined selected products from my inventory and requested me to send those to them so the consumer can touch and feel them. And as you know with use products lose their color and appearance with time. As a result I lost money,” explains Chandan.

Liberty from the trials of ecommerce!

Online retail is definitely beneficial, according to Chandan, that’s why he joined in the first place. He became a part of the virtual industry to expand his selling capacity but wasn’t happy about the approach.

What was plan B?

“Selling online allows flexibility. It offers a wider reach. But marketplace policies are too rigid. That’s why I launched my own portal,”he says.

If you don’t like the rules change them!

“With my own portal I can reach more consumers compared to my offline business in Delhi-NCR,” the furniture seller says.
When talking to clients over the phone he says he cannot provide them with the look and feel of his furniture. Online retail offers greater visibility and better chances of convincing consumers to buy. He went on to explain.
“On online marketplaces there is unnecessary pressure on vendors,” Chandan states. With his own portal he feels he can get ahead of his competition. “I have control over the manufacturing, the manpower and therefore the pricing,” he says.

Freedom to do what you believe in

“Another thing about selling on online marketplaces is the lack of quality checks. I’m not sure if they check other seller’s products, but they didn’t in my case.”Chandan claims.
So to ensure his consumers (on his portal) get the quality they are willing to pay for, he offers quality certificates assuring the authenticity of the materials used. Chandan also explains that consumers can bring in the kind of materials and fabrics they want to make their upholstery made out of.
Selling online is the future of retail. In spite of the trials in your way, it does have the potential to provide success. And if a struggle is what it takes to survive in the business, isn’t it all worth it?
Here’s wishing you all the very best with your ventures and a happy Independence Day!

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