Pulling strings behind the scenes

Flipkart recently decided to hike its commissions from sellers and also charge them a fee on product returns. This was seized upon by its rival Amazon India, which lowered commissions on the money-spinning electronics and smartphone segment. This, in turn, fuelled anger among some sellers who protested Flipkart's decision by listing their products as out-of-stock for a day.

While this episode may typify the competition in the ecommerce space, it also shows that e-tailers as well as omni-channel players are always trying to strike a balance between the quantity and quality of sellers. E-commerce players cannot afford to be crutches for small-time sellers to lean on, but a robust platform for them to succeed on a bigger scale.

A spokesperson of Flipkart, India's largest online marketplace, explained that the company's revised structure across shipping, commission and returns would enable sellers to have predictability and better manage their online business. "The standardisation has been designed to encourage sellers, who offer superior customer experience, and it is thus a win-win situation for both our customers as well as our customer-oriented sellers. Our commission and fee structure remain competitive and in many categories better than other marketplaces. Flipkart is conducting several webinars and training sessions to ensure a smooth transition for all the sellers," the spokesperson added.

Snapdeal, which has over three lakh registered sellers, aims to grow with small and midsize businesses (SMBs), according to the company's senior vice-president, market development, Vishal Chadha. He says the company has mapped seller journeys, identified challenges and tried to create an enabling ecosystem for them.

One of the principal challenges identified by Snapdeal is business planning and inventory management. "Traditionally in India, SMBs relied on intuition-based business decisions when it came to inventory management and pricing. However, we built a team of dedicated Snapdeal advisors last year, who enable our sellers to make data-driven decisions on assortment and inventory management. The advisors work closely with sellers to develop joint business plans on the basis of predictive analysis for periods of high demand and help them grow their businesses. We have come to a stage where sellers have begun to 'stock what sells, rather than sell what is in their stock'," says Chadha. The advisors also identify training needs of sellers and provide necessary interventions, he adds.

Second is logistics. The company introduced Snapdeal Plus, a service that allows sellers to stock their inventory at the company's fulfilment centres for nominal fees. "Over the last year, we have opened 63 Snapdeal Plus centres across 25 cities and sellers who avail of its services get a solution for all their logistic needs, including packaging and tracking of shipments," Chadha points out.

Third, Snapdeal unveiled the Capital Assist platform, which aids sellers in meeting their working capital requirements and scaling their business. Under this programme, Snapdeal has tied up with 27 banks and non-banking financial companies to use big data to transform lending to small and medium enterprises. "By using sales history and customer reviews of sellers, banks are able to make pre-approved offers or instant decisions on loan requests for sellers. Till now, we have disbursed loans to 1,200 sellers of approximately Rs 300 crore across 300 cities. This has enabled sellers to keep pace with the growth of sales on our platform," he says.

Last but not the least, for a better interface, in November 2015 Snapdeal refreshed its seller platform with the "Sherpalo" update to further enhance seller experience. The platform provides a single-window access to all seller services like on-boarding, training, product listing, inventory, order and returns management, advertising, third party services, capital assistance and help centre, to help them manage and optimise their online operations. It also sends notifications to give sellers real-time updates on incoming orders.

Vishal Sharma, vice-president, operations, ShopClues, identifies five key issues to manage suppliers best as thus - getting more orders, getting paid, managing returns, clarity on fees and commissions and logistics support.

In order to improve visibility of merchants on the ShopClues portal, they are allowed to place products on its flagship deals properties such as Sunday Flea Market and Super Saver Bazaar. "They can also bid for featured product listings and customer search keywords through our AdZone bidding platform. Very soon, we will provide our sellers their own digital identity with a custom domain, website and app," he says.

ShopClues claims to have the fastest payment cycles in the industry. Sharma says, "We ensure our sellers get paid on time, every time. If the seller improves his/her rating (defined by on-time shipping, product quality and customer satisfaction), then they can get paid even faster."

When it comes to its returns policy, he says that unlike other portals that offer no-questions asked returns for customers, ShopClues takes a "more seller-friendly approach" encouraging sellers to resolve the issues. "We also have a chat feature called ShopClues Connect that enables customers to directly talk to sellers and clarify their doubts and make an informed buying decision, thus reducing returns," he says. For transparency on fees and commissions, ShopClues' new payment dashboard clearly shows sales, refunds and payouts, while the company has tied up with 40-plus couriers across India to enable smooth delivery for tier-II and tier-III cities-based sellers, he adds.

Since its launch in June 2013, Amazon India has added over 85,000 sellers in the country, reporting a seller growth of over 250 per cent year-on-year. It also boasts nearly half of its sellers from tier-II and tier-III towns. Gopal Pillai, director and general manager, seller services, Amazon India, opines that the seller base in India is as evolved in their thinking as anywhere else, despite being new to online retail. "They care about sales, profitability and a fair and transparent platform to operate. We work seller backwards to understand the needs of the sellers and innovate."

He cites a number of initiatives taken by the global ecommerce giant to transform "the way India sells". These include an extensive education and skilling programme for SMBs called Seller University, offering Fulfilment By Amazon (FBA) - a pay-as-you-go fulfilment service wherein Amazon.in packs, ships and delivers products to customers, manages returns and does customer service on behalf of the sellers - innovating Easy Ship, an assisted shipping service that makes it easy for sellers to ship products across India, and Seller Flex, which implements the FBA technology at sellers' warehouses.

FBA helps sellers to store their products in Amazon's warehouses while the company packs and delivers the orders to customers, provides customer service and manages returns. Among its slew of measures to address sellers was the launch of Amazon Tatkal, which was meant to allay fears of online selling being cumbersome and time-consuming. "This is a service on wheels where we help SMBs get on to Amazon.in and sell within 60 minutes. We have covered over 40 cities and on-boarded hundreds of SMBs," points out Pillai. He adds, "We recently partnered the Development Commissioner for Handlooms under the Union Ministry of Textiles to enable weavers in Kota, Rajasthan, Nadia, West Bengal, Bargarh in Odisha and Bijoynagar in Assam to sell their products directly through Amazon.in's 'Crafted in India' store."

In the ecommerce space, some have opted for a multi-channel approach toward sales. Such a model, even in case of companies foraying into ecommerce later, is preferred by those who do not wish to put all their eggs in one basket.

Pratik Jindal, MD of SRS e-Retail Ltd, which drives the SRS Group's ecommerce sales of grocery, says, "Logistic is the only problem in the grocery sector. We have connected all the SRS Value Bazaar stores for customers. Anyone who isn't delivered goods through the warehouse after ordering online can get them delivered through the store." Involving its ecommerce business with the SRS Value Bazaar chain, instead of brands or sellers directly, cuts their dependence on suppliers, he adds.

Lenskart, which designs its own products, also offers customers the options of buying products online as well as from its offline stores that came up later. Founder and CEO Peyush Bansal says, "From a supplier perspective, the biggest challenge of course is quality. In a marketplace when the seller is shipping out you may not have a good sense of what is going out. That is why we have fundamentally stayed away from that model." Besides quality control, merchandising is another big challenge, he feels, but cautions, "a model where the goods don't come to you and directly go to the consumer saves an additional day but it has a cost in terms of quality."

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