Over the last few years, more and more retailers have enlisted themselves on online marketplaces like Flipkart and Amazon in India. On one hand the digital space gives these sellers an opportunity to reach out to thousands of consumers across the country, and on the other the marketplaces are offering service models that are specially designed to help small sellers make more out of less.
The Story of Selling on Marketplaces
According to Google India there were 35 million online shoppers in India in 2014 Q1 and is expected to cross 100 million mark by end of year 2016.
Many small sellers with a low budget stop themselves from selling over the marketplaces, because of the fear of ending up making no profits due to high fee and competition on these platforms. Online marketplaces in India are nonetheless rapidly gaining increased visibility among shoppers, as they allow sellers the convenience and flexibility in offering products and services to consumers.
Categories like lifestyle, fashion, electronic products have gained most popularity and contribute a larger part of business to sellers selling those categories online. Other categories like handmade products and grocery have recently started catching up.
What Makes Flipkart and Amazon Attractive Platforms for Small Sellers?
Flipkart, and its largest local rival Amazon India are ranked as the top eCommerce sites by Alexa. Both the marketplaces are seen to be constantly focusing on coming up with innovative strategies that could help startups and small sellers grow, all in an effort to dominate the rapidly growing eCommerce sector in India.
Flipkart and Amazon are also included among those seven eCommerce companies to have earned billion dollar valuation, as of Q1 2015. So what makes these two so beneficial for small scale sellers?
1- Logistics Support
Providing a winning growth factor for small sellers, these platforms offer fulfilment service models that helps them overcome the nightmare of not being able to fulfil their customers’ orders in time. Denying a good experience to the customers at an initial stage will create a bad impression around the seller’s brand, which automatically hampers growth.
FBA: Adopting “Fulfilment by Amazon” allows sellers an ability to connect with the best of the best fulfilment resources that are already trusted by customers on Amazon.
From storing inventory to picking, packing, and shipping products to customers, FBA service is helping many small business owners to save loads of time and ensure products are always delivered to customers in time.
Flipkart Advantage: Similar to Amazon, Flipkart offers sellers its own fulfilment service called “Flipkart Advantage.”
Adopting this service, small sellers get a chance to showcase trust with a 30-day return policy along with same day and next day delivery option.
2- Pocket-Friendly Fee Structure for Beginners
Marketplace are surely helping small sellers earn sales orders, but, not many survive as most of the marketplace charge quite an amount of fees for subscription, listing, and commission and closing.
How are Small Sellers Benefiting with Flipkart and Amazon Pricing Structure?
Flipkart and Amazon offer a performance based pricing structure encouraging more and more small sellers to be a part of one of the fastest growing sector In India.
Subscription fee: There is no subscription fee for sellers, all you need is to register, list your products and start selling.
Listing fee: Listing of products on both the marketplaces is free, however there is commission charged on each product sold.
Commission: Commission differs from category-to-category. For Flipkart sellers, the commission can range as low as 4% to 25% depending on the product that is sold. For Amazon sellers, the commission can range as low as 6% to 45% depending on the product category. The good news is, the percentage of the total sales price that is paid by the buyer is deducted as referral fees.
Closing Fee: Flipkart and Amazon offers a standard closing fee from sellers. There is no closing fee for products priced below Rs. 250. There is Rs. 5 fee for products ranging from Rs. 250-500, while Rs. 10 for products above Rs. 500. For all other categories, the marketplace charges a fixed fee of Rs. 10 for each product sold.
The above figures are the updated one as of today, however, for any future updates on their pricing, please refer below:
3- Compete with Price
Repricing on Flipkart and Amazon is constant hence small sellers find it difficult to to offer competitive ones, most of the time. Automated price updation is now becoming important for sellers to ensure their products are competitively listed, always.
Analysing and tracking pricing pattern of competitors is ideal for small sellers. But, updating prices for each product manually is not a good idea. Chances are more that the price gets outdated by the it’s updated.
Orderhive – a multi-channel marketplace software well connected with both the marketplaces, has the same motto of constantly rolling out models that could help start-ups and small sellers meet needs in ways that are easy on the pocket.
Allowing sellers to understand and analyze pricing structure of competitors, Orderhive makes it easy to manage repricing across multiple marketplaces.
4- Returns and Seller protection
Small sellers at the initial stage may not be bothered about the safety against returns and fraudulent customers. What they don’t realize is, when their business grows such scenarios lead to real nightmares, eating a large amount of capital.
Flipkart India protects small sellers with their Seller Protection Fund (SPF) program. Sellers will have benefits like:
1- Returns, Product damage in transit – Sellers can claim for benefits when they are not at fault.
2- Orders lost in transit by Flipkart’s courier partners – Sellers under the SPF claim automatically.
Claims can be directly requested through Flipkart Seller Dashboard.
Similar to Flipkart, Amazon marketplace offers a Seller Protection program that helps sellers from frauds, returns, and offers refunds. Sellers will have benefits like:
1- Amazon return policy- Sellers can expect refunds for products returned within 30 days.
2- Amazon A to Z Guarantee Protection – Protects sellers against payment frauds when payment is made via the Amazon.com.
What’s more for small sellers?
Flipkart One Stop(F1-Stop) Program
Flipkart launched has launched a new program that will assist small sellers with end-to-end support and ensure every seller grows successfully while selling on the marketplace.
Currently, Flipkart is offering this program service in 10 major cities across India, sellers will be able to gain valuable insights ranging across registration, training, packaging, cataloging, and financial assistance too.
Orderhive is one of Flipkart’s F-1 Stop program partners – to ensure a combined effort in offering the most simplest and profit-making online journey for small sellers in India.
This marketplace has also lately announced its tie up with Export Promotion Council for Handicrafts and Karnataka Small Scale Industries Association to organize workshops and discuss on ways that could help small sellers grow online.
Considering Amazon for your small business
Amazon Loan Program
Amazon.com Inc has declared to launch its business loan program for small sellers in eight more countries including India.
This is to encourage more and more sellers gain confidence to shift their business online by providing them a reliable source of credit availability and gain a kick-start when selling over the marketplace.
Unable to offer competitive discounts, pricing, and logistics has always made it a tough decision for selling and surviving on online marketplaces. However, among the many marketplaces available for sellers in India, Amazon and Flipkart are surely a great help for budget-constraint sellers. Both the marketplaces have already proven to be a growth factor for many small business owners and they continue to do so by helping them perform better year-after-year.
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