The US based Amazon.com started in 1995 as an online bookseller has now become one of the biggest online retailers in the world. But for a very long time now, Amazon.com has been accused of taking the side of the customer rather than support the seller. Now, sellers on Amazon.in, Amazon.com’s marketplace model in India, have started to complain about the lack of ethical responsibility by Amazon towards the seller.
Extra discounted products, flexibility on returns, etc., has earned Amazon.com a wide customer base. But with Amazon.in being a marketplace where third party sellers play an important role in the diversity of product base, it becomes crucial for Amazon.in to give equal importance to customers and sellers. Unlike Amazon.com where 60% of the products sold are their own products.
According to a report by Livemint 6 sellers who wanted to remain anonymous expressed their concern about the antagonizing attitude of Amazon.in towards the sellers. Whether this is the opinion of most sellers on Amazon.in is difficult to tell. The 6 sellers who gave their opinion are of the idea that if such stringent policies in favour of the customer continued, sellers would opt out of selling on Amazon.in.
Amazon.in, according to the sellers exerts an upper hand over all matters giving no leeway for the sellers to be able to act or carry out actions on their own.
“The problem is that Amazon controls everything: how much product you have to commit, when do you have to send it to them, when do you get paid and how much cash of yours will they reserve. On several occasions, even though a product isn’t faulty, they will deduct money from the sellers’ account without taking the permission of the sellers,” one of the sellers said.
Sellers have complained that Amazon.in practises strict and unnecessary policies on products returned by the customers. Depending on the damage, money is deducted from the seller’s account. Even though this is stated in the FAQs of ‘Sell on Amazon’, there is no particular percent mentioned and according to the sellers, varies from time to time, depending on the consideration of the amount of damage caused to the customer.
“When there’s a dispute between the customers and sellers, invariably, Amazon is biased towards the customer. In some cases, they will deduct 50% of the money when there’s a product return and sometimes the entire amount. In these cases, it can take more than a month to recover your money even though there was no fault of the seller. All this blocks the cash flow and makes it very challenging to do business with Amazon,” one of the sellers cited above said.
As a remedial measure to faulty products or returns, Amazon.in has a habit of closing down the accounts of sellers. A similar case is said to have happened with Amazon.com where the ‘Buy’ option was deactivated from several book titles when publishers of these books did not agree to cooperate with the discounts Amazon.com imposed on them. Eventually they had to relent.
When seller accounts are blocked or deactivated, payment towards sellers are withheld for days before it is released to the seller, often after a levy of fines or deductions which is not discussed with the seller.
In the case of returns, Amazon.in decides what to do with the returned products rather that consult the sellers.
Sellers who sell on Amazon.in have the option of either using their own shipping service or availing the ‘Fulfilment by Amazon’ (FBA) service. For those using Amazon’s shipping service, products are stored in the Amazon warehouses. Returns on the products and the products themselves are withheld until seven days after product reaches the customer.
Speaking about the claims of these seller’s Amazon.in’s Head of Seller Services, Amit Deshpande said, “We have clear and transparent policies for sellers. In case of FBA, there are four categories of returns: wrong product; if the product didn’t match the site description; change of mind by the customer; if Amazon damaged the product. If Amazon has damaged the product, we pay a fair market price to the seller and also return the product. We also always give sellers a chance to fix their problems. But when (underperformance) happens on a regular basis, it becomes an issue of protecting the customer experience and we have to suspend their accounts.”
Treating both the customer and the third party seller is crucial to Amazon for the following reasons:
“It’s not surprising that Amazon is facing such issues with sellers; they’ve been scaling up so fast that they would have to fire-fight most of the times, especially given their customer focus,” said Harminder Sahni, managing director at consultancy Wazir Advisors. “But, over time, they will have to strike a balance because the only way a marketplace can function well is if both sellers and buyers are happy. Amazon has the funds and the proven ability to do this over time.”
Online marketplaces such as Flipkart, Snapdeal which allow the seller to sell for free without the subscription fee are constantly trying to improve the standards of the sellers and equip them with new and innovative ways of selling their products. This gives sellers more reasons to change ship to a new marketplace if claims about Amazon’s inflexible attitude towards sellers persists.
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
Leave a Comment
