These are thoughts shared by Sugam Jain, online seller on multiple platforms.
Tensions & Drama in the Indian e-commerce story is at an all time high right now. Investors are getting cold sweats, top management is tense, middle management is switching jobs left and right and We The Sellers are stranded in no man’s land watching the Clash of the Titans quietly like humble beings, fulfilling the orders and raising seller support tickets. Every day is a new fight with a new process or policy with a new marketplace. Sellers are the invisible Spartans on whose back this entire war machinery is riding.
In midst of this clash of the titans, whoever emerges as the winner and however everyone settles in peace at whatever position, one thing that will not change is the seller’s resolve to sell. Regardless of who becomes the king of Indian e-commerce, the ground reality for sellers remains more or less the same. It all comes down to two things for sellers like us, No. of Orders each morning from whatever number of marketplaces and Transfer Price.
Many of you who are already selling already know what we are promised by marketplaces at the time of onboarding and what we get, the least we can do is share this knowledge with our brothers & sisters soon to be initiated into this army to prepare them for the horrors ahead. It is not a hidden fact that just as the number of customers are rising, the number of sellers is also rising by the day.
Students, Housewives, Fresh Graduates, Experienced Traders, Wholesalers and even Manufacturers are joining the Indian Online Selling movement, be it as a part time thing or as a full time career to see what it has in store for them, where does it take them. All the glitz and glamour attracts them to give it a try, makes it something you might regret if you do not try. We read so much e-commerce in papers, magazines and watch it on news, watch ads between our favorite serials, listen to them on the radio, wait not finished, see ads plastered on cricket grounds, billboards and hoardings, delivery boys and vans AND on top of it all, it comes up in conversation with people! Any age group any time anywhere. It has become inescapable.
Well, folks! All that glitters is not gold.
Selling Online is just like any other business, needs investment, hard work, patience, capable team & most of all time & dedication.
And its certainly less fun than a shopkeeper would have in his entire day talking to 30 odd customers that will walk into his store and actually talking to them to make sales. Selling Online you will only get to talk to rude seller support agents with a don’t care attitude or arrogant pickup boys.
You can always turn to old Lata Mangeshkar songs while waiting for pickups for the day to be cleared and uploading all the manifests before shutting shop. Uploading manifests after pickups is one practice that has been imposed on sellers by marketplaces like curse of dowry on the society.
Multiple marketplaces will approach you multiple times for onboarding, so, before you get “on-boarded” and after you have been “on-boarded”, keep these few things in mind:
Make sure you have valid TIN registration and an accountant or software for invoicing, VAT accounting and timely submission of tax as its the seller’s liability and not the marketplace’s, like when I started selling online, I did not understand V of VAT accounting and invoicing, and no matter how much I asked anyone from the marketplaces, they were not able to clarify the picture as they themselves could not understand the same.
Most marketplaces raise an invoice on behalf of the seller that does not mean they will submit your tax; they only do it to indemnify themselves from any liability. Treat marketplace as a marketplace and nothing else, you are only paying service fee including service tax to the marketplace for using the platform. BE VERY CLEAR about the billing & VAT process, seek advise from someone with experience in this area.
Online selling does not in any way mean less headache from traditional selling, as the market grows there will be more automation tools and life may get easier, but till then, don’t ignore this aspect at all.
Start selling with one marketplace; do not start selling on each and every marketplace that comes along your way, like any other industry or business focus is as important here as well.
They will try and lure by showing a rosy picture but don’t judge a book by its cover, you can always join them tomorrow, am sure they wouldn’t say no. Each marketplace has very different fee structure and policies and seller agreements, while in the short run you would not see a lot of direct effect from ‘these things’ and enjoy the growth like a roller coaster ride but in the long run after the ride is over and you look for stability it can make you sick, you will start to see indirect repressions on every aspect of business as a direct result of these policies and fees.
Also, choose where you start carefully, as every marketplace has a different ‘strength’ category and different audience ‘class’.
So make sure you do your homework and research for your category on the marketplace you are about to join. After starting with a marketplace give it a couple of months to establish specific process and policy for that marketplace for your operations. Let it grow, focus on growing business on that site rather than blindly racing to be present on maximum number of sites. For most sellers, one or max two marketplaces will be 80% of the business while others together will be no more than 20%.
SLA or Service Level Agreement
It is the time within which you have to ship the order from your warehouse.
Forget marketplace SLAs, have a max 24 hour cycle of order processing and shipment, it will not only help your ratings and sales grow it will also help towards faster rotation of capital and inventory, seems small but makes a big difference.
Do not think that if a marketplace has 48-hour SLA you can process the order tomorrow, if you are unable to handle the number of orders, expand immediately but maintain SLA at any cost. This will also help you be a “good boy” for the category manager and you can get special treatment sometimes in terms of your products being put to featured deals and homepage. But again, do it anyway, not for this.
And do not be dependent on your account manager or category manager, keep the struggle up with seller support and focus on increasing product portfolio.
And by the way, there are NO HOLIDAYS; I have personally handed over pickups on 26th January.
Wherever possible levy a separate shipping charge even if minimal like Rs. 30/-.
I am not saying that levy an extra shipping charge, just have it as a separate component. Like if you want to sell something for Rs. 500 make it Rs. 450 + Rs. 50 shipping charge. It helps your bottom-line. I f you include shipping charge in price you end up being taxed 3-4 times. First with VAT, then with marketplace commission then service tax on top of that and finally income tax. But if you charge shipping as a separate number you are not liable to pay VAT or ST on it, the entire amount can be used directly towards actually covering your shipping expenses.
Now this is a tricky one.
When you sell online, MAYBE for the first month you will reconcile the payments and returns, but as your business grows you will start trusting it and ignoring the same as it is truly the most tedious task of selling online, it is next to impossible to do. BUT, don’t ignore this.
The payment sheets are messy, and with multiple payments of multiple marketplaces each week, you have more sheets than you can reconcile and how to adjust it all in traditional accounting practices is a whole other story. One major thing that needs to be checked is deductions for return, as money gets deducted before the return gets delivered back to you. And some returns will never come, they will just vanish into thin air during transit, you need to catch these and raise disputes, also for damaged returns, which are covered under seller protection policy. Also, keep checking the net amount after all deductions (Transfer Price) that you get for each SKU as it will get changed one fine day and you will never know.
Do not fall into marketplace’s trap of plus/advantage/fulfilment models. Consider carefully if its the right thing for you and if you can manage and handle billing and accounting for the same. Now that you have almost first hand knowledge of things to look out for, take your call if you want to enter this industry, as a growing industry it could prove to be more than worth your while but to be able to do that, you need to BE PREPARED! THIS IS SPARTAAAAAAAAAAAA………