Sellers on Flipkart might soon be able to sell on the online marketplace without commissions burning a hole in their pocket.
According to this ETRetail news report, Flipkart is planning to discontinue commission it levies on enlisted merchants. In place of commission, the marketplace will insist sellers to use the platform to advertise their wares for a cost.
One of the Flipkart’s executive revealed to ET, “The focus will be to push sellers to advertise on the platform and not compete on commissions. The selling commission will become zero now.”
This step is taken with an intention to get more sellers on the platform. While selling commission (that varies from 4% to 25% depending on the category) will be done away with, merchants will be required to continue paying the closing fee and shipping charges.
Another reason is to create revenue for Flipkart’s advertising venture. In March this year, Flipkart had acquired Adiquity, a mobile advertising firm. The acquisition made it pretty clear that the marketplace wishes to explore other avenues such as paid ads to become more profitable and stay ahead in competition.
It is still unclear as to how this will work out. Currently Flipkart has 30,000 sellers and they plan to make the total to 1, 00,000 sellers. Obviously not all will/can choose to consistently advertise. Because the whole point of a seller going online was to cash in on the online shopping craze without the marketing cost.
Few are happy though. A merchant selling on Flipkart said, “When sellers are pumping in more money to bring visibility to their products with ads, Flipkart might become more sustainable and it’s good in the long run for sellers like us.”
On the plus side, getting rid of commissions will not only reduce a seller’s burden, but cases of fake discount such as this will hopefully drop too.
While brand visibility has always been a sore point in a big marketplace, now with paid ads, will the ones who can’t afford to pay for it get sidelined? What do you think? Please share your views.