Do online marketplaces really favour customers more?

The online sales boom is at its peak, and retailers are hooking up to the internet like never before. The Indian ecommerce industry is growing in leaps and bounds. It also helps immensely that buyers are increasingly taking their shopping carts online. The situation should ideally be a boon for online sellers.

Let us look at the argument from all sides. We will play the devil’s advocate and put up the facts from the point of sellers, buyers, and the marketplaces and you be the judge.

Sellers who take the online route

An online presence is possibly the best thing that could happen to a seller. First, the reach – an online seller can reach customers in numbers that simply cannot be compared to the number of customers that would walk in to a physical store. Some, like Jabong, also have an international presence. Second, the marketing – most established marketplaces give sellers a good chance of visibility. Apart from that, sellers can avail of paid marketing in some websites.

If an individual seller is to try to market and advertise products, she or he would definitely not have the resources to compete with an online marketplace receiving funding in multiple crores from foreign investors.

Third, the seller can do away from the expenses of maintaining a physical store. A fee to use the website’s warehouse might not be higher than the expenses of rent, electricity, and utilities for a physical store. The seller can also cut down on expenses on support staff; as without a brick and mortar store, there is no need to maintain sales people. (This will doubtlessly cause loss of livelihood to the staff, but they can hop on board the online bandwagon in various capacities.)

This post on Quora by Quoran Abhishek Anand explains it beautifully. He does not pass judgement on whether the commission charged by Snapdeal is fair, but he says at the moment, the company is calling the shots. Having said that, there are many benefits of listing in an online marketplace, not the least being financial benefits.

The seller has scope to earn in massive proportions, if this Snapdeal blog post is to be believed. But the fact remains that marketplaces are generally pro customer. This places a heavy burden on the seller’s shoulders. With the marketplace charging huge commissions, taking the customers’ side unconditionally, and urging sellers to dole out huge discounts, the sellers seem to be left high and dry.

What choices does the seller have now? One possibility is to spread their wares, literally, by signing up at multiple websites. Exercise due diligence and sign up to those marketplaces where there is a good support and a fair representation for the sellers.

From the buyer’s standpoint

As far as the shoppers are concerned, there could be nothing better that could have happened to them! There are several perks that an online buyer enjoys. First and foremost, the several discounts each website offers. Second, the ease of shopping from the comfort and convenience of wherever they want to. Third, the numerous websites from which they can make choices. Fourth, the ease of comparison of products and sellers through multiple tabs.

More importantly, the superficial benefits apart, online marketplaces have placed customers on a high pedestal. Buying online has guaranteed returns and refunds (within reasonable time frame and conditions) at no penalty or loss. However, in several physical stores, the customer can only exchange the product for something of a similar value, never a monetary refund. There are some stores that have a no return no exchange policy, leaving the customer high and dry in case of a reasonable issue (size, defect, colour fade). Customers also have the benefit of delivery and pick up from their doorstep. This saves buyers from a lot of trouble.

Despite the advantages, there is a downside to online shopping. IOS reported instances of buyers getting fake speaker, stones delivered instead of a phone, and so on.

The other side of the customer camp

However, not all customers are honest and fair. Earlier, IOS had covered a story on how customers take advantage of the policies created to protect them. The article also gives tips on how to handle sticky situations like customer asking for a refund after using products.

Marketplaces

The middleman is a necessary evil. The fact remains that a huge chunk of the transaction is eaten up by a middleman. In spite of all the arguments against middlemen, they carry out the important task of connecting the party who has to sell with the party who wants to buy.

Indian online marketplaces have been coming to the notice of major foreign investors and venture capitalists. However, the singular grouse that sellers have is that marketplaces take the buyers’ side, no questions asked. The marketplace runs chiefly because of its sellers, and if disgruntled sellers walk away, then no matter how many happy customers you have, without sellers you cannot run the show.

To sum up

Doubtlessly, without demand, supply is meaningless. Without a strong customer base, sellers will be out of business. The online marketplaces are laughing all the way to the bank. It is a win-win situation for the customers as well. The circumstances are great for sellers too, barring a few inconveniences such as marketplaces putting the burden of discounts on them.

In order to ensure that things run smooth, marketplaces need to strike a balance among all stakeholders. It should never be a situation where one party is favoured over the other. Some stringent policies should be put in place to protect the sellers’ interests as well.

What do you think? Let us know your views. Leave your comments below.