eCommerce business keeps on developing, speaking to an expanding offer of aggregate retail sales. As increasingly and bigger online stores open, small venders may confront new business-undermining issues in 2017.
We realize that the online business organizations have changed the way we do trade in India. They offer discounts, large number of products in all categories, fast delivery, customer support, easy returns, cancellation, & exchange and in this manner made our lives simple. We can sit in our home or office and request anything we need and pay effectively with Visas, charge cards or COD.
So a large portion of a billion people are amped up for online business in India and this number is developing.
Internet business has a moderately low boundary to start and can require generally couple of representatives or assets. While this won’t likely change any time soon, here I am representing critical issues for small online seller. I will clarify the other piece of it – from a merchant’s point of view. I will clarify the bothers sellers face to keep buyers upbeat.
On An Average The Marketplaces Charge
- Marketplace commission – 10%-20%
- Domestic shipping per Kg – Rs 20 – Rs 30
- National shipping per Kg – Rs 30 – Rs 45
- Sometimes Fixed commission per order – Rs 10 (for orders above Rs 250)
Along with these, below are incurred losses in:
- Due to 15 days or 30 return policies, customers use products and send them back.
- Products damages in transit.
- Items come after returns are not in a condition where sellers cannot resend to other new orders. Most of the covers/corrugated boxes of brands are damaged.
- Reverse logistics charges (When seller cancel, the he pays the return logistics charges)
- Marketplace commissions (When seller cancel, sellers are still charged the commission).
Please Note That The Average Return Rate For Ecommerce In India Is 30 %.
Sellers Operational Cost
- Office Rent
- Cost of atleast 1 person dedicated for packing
- Packing material costs
- Transportation cost incurred for product purchases
- Can you imagine the above expenses if seller was paying Rs 1 lakh rent for my shop?
The pickup executives don’t come regularly. On an average, 30 % of our buyers cancel the order if not dispatched in 1 day. None of the marketplaces take the liability. They tell sellers, “Vehicle was not available”.
Sellers have to keep following with pickup guys every day. Few companies did a good job here by making the process automated. But most of them are way behind in communications.
All marketplaces have own terms and settle payment after a weeks or 30 days after the product reaches customer. Sellers money is blocked and no interest given on them.
Sellers are made to compete for pricing. Sellers play the number game rather than serving the customer. Sellers are left with very little or nothing at the end. You will ask, why are sellers not complaining? I do not know. But most retailers who began selling online but gave up after 2 to 3 months, couldn’t speak with anyone. They either get satisfied with offline sales or believe it’s not for them.
Every day thousands of sellers are added with no knowledge of the rules of the game. The companies talk big numbers and sign them up. But the companies never call and ask you how you are doing or what problems are you facing with business or how they can help to grow our business…?
The eCommerce companies have total control on seller’s inventory.They can block sellers anytime, make listings inactive anytime, can damage orders in transit, delay payments, cut huge commissions, cut buyer claimed refunds without giving any notification.
There is nothing wrong in eCommerce companies business model and policies, none of them are competing on any product/service differentiating factor. All are fighting on discounts.
“Discounts” won’t help in building customer loyalty as buyers would go where the discounts take them. In the long run, this is a biased business model, where sellers are screwed to make customers happy. The discounts and offers do not go a long way and the customer expectations are increasing day by day. To meet those expectations sellers are giving up their margins and closing businesses.