Of late, much is being talked about the fierce manner in which the eCommerce marketplaces in India are competing with each other. Companies like Flipkart, Snapdeal, Amazon and so on are fighting for users, investment, team and vendors to sell their inventory on their respective platforms. On one hand, while these companies have presented a golden opportunity to retailers, brands and SMEs to sell to the entire country, they fail to highlight how tough it would be.
Getting onboarded to a marketplace might seem like a piece of cake in front of the challenges that come in selling through them while making a sustainable revenue. Peer competition on each marketplace is just one part of the story, here are 5 other big problems that sellers face while selling on marketplace eCommerce platforms
- Manual Efforts in Volume Management
Cataloguing and updating inventory across marketplaces isn’t an easy feat. For instance, let’s say you are a fashion retailer selling on 3 different marketplaces. Now to stay ahead of the competition, you add fresh stock every month or so, this would involve checking the cataloguing requirements of each portal for each item and manually updating your inventory one by one. This is because there is no standard code for cataloguing. Even if you use a technology solution that allows automated updation on a few marketplaces like Flipkart, Amazon & eBay, most of the other major portals don’t have their catalogue APIs open yet.
- No Flexibility in Moving Price and Inventory
Pricing is one of the factors that will determine your success in a marketplace, since the competition is cut-throat especially in commodities like electronics, apparel, home decor and so on. Event based discounting puts sellers in a dilemma on how much discount to give on their products on different channels, since different portals run their sale season at different times. Here comes the challenge of inventory allocation, which to some extent gets eased out if the seller is using an eCommerce SaaS platform that allows inventory management.
- Commission to Marketplaces
Selling on marketplaces comes at a cost. As mentioned above, eCommerce in India has opened up doors for retailers to sell across the country, and some even globally, and for giving this opportunity they charge a service fee. For each sale they make on a portal, the sellers have to pay a commission to the respective marketplace. Thereby increasing their cost of sales.
- No Creation of Own Brand
End consumers remember the name of the online marketplace they shopped at, not the seller they bought from. Moreover, even if you are highly successful on a particular marketplace in comparison with your peers, the brand creation in the overall market still lacks.
- Challenges in Scaling Up
Only a few companies exist which are online only. Companies go online to grow their existing channels of sales – some create their own online stores, some sell on multiple marketplaces and some do both. On marketplaces, building repeat buyers and a loyal customer base is very tricky owing to the competition and absence of brand creation. Even with a seasoned team that can help you with different processes of cataloguing, inventory management & logistics, there is a limit to how much you can grow your revenue.
Investing in a good team and technology is critical for survival and scale on marketplaces. If you are looking for scale and growing your brand, you may want to consider having a dedicated store while parallely selling through different channels. Readily available ERP, CRM and other technology tools can help you accomplish the same.
About Purple Stores:
Purple Stores is a DIY eCommerce platform designed specifically for the Indian Merchants. It allows them to run their own branded online store with ease even while selling on multiple channels. Apart from on demand technical support, it allows gives an access to services like catalog development, logistics support and internet marketing. To try out Purple Stores for your business for free, click here.
Disclaimer: This article is powered by Purple Stores