Selling online is the next phase after an offline venture for some retailers. It is also a cheap and effective means of reaching out to consumers across the country. For the Goan electronics and watch seller, Omprakash Mhavarker, online selling began for the very same reasons. He says he was drawn towards selling online for the simple purpose of building his business through increased sales. But, like it is the case for many, Omprakash did not have it easy.
He bought into the online retail dream through TV ads about Flipkart. At the time he tried to register on their website but his PIN code was not serviceable for order pickups back then. Luckily, the seller was contacted by Snapdeal and that’s how the ecommerce journey for Omprakash began, in June 2015.
“I registered on Snapdeal and was happy to receive my first order after only 7 days. I soon joined Flipkart a few months later. With time my sales increased. But the best profits came when we sold in bulk. For example, the profit we earn on the sale of 5 items is Rs. 250, which is far more in comparison to the sale of a single product offline. So as long as we were making sales online in bulk quantity, I was happy,” He informs IOS.
But unfortunately, the very same marketplace that got him started with online selling is now bringing him immense grief. The online seller informed us that Snapdeal has created multiple issues for him as an online seller. At first, it started off with delayed payments. Then came problems like:
– Fake orders
– Return of used goods
– Shipping charges for returns
– End of insurance policy
“I’ve tried many things to overcome my issues. Reaching out to Indian Online Seller is one way I plan on raising my voice so Snapdeal clearly sees my issues, works on them and helps sellers like me. I want to restart my business online in full swing so I can sell more to earn more,” Omprakash says.
In an exclusive interview with IOS, the online seller brings out the lesser known troubles Snapdeal’s electronics sellers face without ecommerce insurance.
IOS: How did your problems on Snapdeal affect your business?
There are three basic problems we faced on Snapdeal.
Problem #1 – The initial issue was payments!
Two months into online retail on Snapdeal and we began facing payment troubles. The delays usually lasted for about 7 to 12 days. As a result, I was falling short of cash to restock my goods. This issue persisted for quite some time that’s when I reported the issue to Snapdeal. In the next payment cycle, they transferred the amount due.
Problem 2# – Shipping charges making things worse!
The next issue we faced was with shipping charges. To deliver a product Snapdeal would charge us Rs. 57 if the customer didn’t like his purchase and sent it back. This drastically affected our profits.
If the cost of a product is Rs.1000 and its MRP is Rs. 1150. Snapdeal charges a commission of Rs.50 per product on the profit made. In case the item is returned we have to pay shipping so I make a loss because I have to pay for return shipping.
Problem 3# – Return of used products & end of Insurance for mobiles & tablets – The BIG issue!
After the payment and shippinc cost troubles, problems of fake orders and the return of used goods came along. After reporting this to Snapdeal only then we received refunds of 40-100%. But we cannot resell used products on Snapdeal. The consumer would open the seal on a mobile phone pack and use the device. This would be sent back and in some cases, Snapdeal would refund only 40-60% of the returned order, the unrecovered amount was a loss for our business.
Initially, the online marketplace had an insurance policy for mobiles and tablets which was good for instances like the above. But, 4 months ago this policy ended forcing us to bear the losses after Snapdeal’s 30-60% reimbursement.
IOS: How did the insurance policy work?
In the mobiles and tablets category Snapdeal used to collect Rs 32-37 from us per mobile/ tablet as insurance. So, if a customer cheated us or sent back the wrong, damaged or used products Snapdeal and the insurance company would cover our losses and we could recover the entire amount of the given product.
However, the etailer would keep the product. I was okay with the way this policy worked. I sold with full confidence knowing I would get my money even if consumers engaged in malpractices.
But, around 4 months back they ended this insurance policy and I’m forced to reduce my online sales and sell used products as second-hand commodities at my offline store!
IOS: Is selling second-hand products working out?
The moment the consumer inserts a SIM card into the phone the phone’s warranty is activated. And when the same product is returned this makes it a second-hand commodity.
Once Snapdeal’s insurance policy was discontinued, I received my returned products. The warranties were activated for these since they had been used. I couldn’t sell these on the marketplace or on my offline counter as new products.
So, I reported to Snapdeal the issue I faced and was provided 40-50% of value of the phones returned. The marketplace told me to recover the rest by selling the used item as a second-hand product. They didn’t provide any further assistance or directions after changing their policy.
To get rid of the returned products, I’m managing to sell some on other online portals and some at my offline outlet.
IOS: Do you still sell on Snapdeal after this?
Yes, I do.
IOS: Why continue?
I’m a small seller and this helps me generate more income and achieve some good turnover. However, I am not dependent on this channel. I concentrate more on my offline retail now.
IOS: Has the volatile nature of Snapdeal reduced your enthusiasm in online retail?
I used to make sales worth Rs.1 lakh to Rs. 2 lakh per month. Now, it’s reduced to just Rs.50,000 to Rs.1 lakh a month. I don’t feel as much excitement as I used to about online selling. Marketplace policies are constantly changing and one way or the other we are being cheated.
Sometimes, it feels like online selling is not for sellers like me. It’s for big individuals who can buy products in bulk and offer mega discounts. These are not prospects that will work for small sellers.
Warehousing large stocks comes at a cost and we could use SD+, but the SD+ warehouses give preference to large sellers who can afford their expensive services.
IOS: Why do you keep selling online despite the issues and current lack of excitement?
The ecommerce market is very big and anyone can buy from here. If I list my products online now or after 4 months I will surely get sales. If my stock is stuck in my offline retail the best place to clear up dead stock is online marketplaces. Whether it’s a day of a few months stocks definitely sell out.
At the same time, selling on an online marketplace is worth it only if the online sellers are well protected. With offline selling, you can communicate with the customer and sell products at a profit.
IOS: How can Snapdeal improve for its online sellers?
To improve Snapdeal needs to:
Do you agree with Omprakash? Does insurance make a big difference to online sellers and can it reduce the effects of product returns?