One of the many decisions that sellers have to make while signing up on an online marketplace is, should they choose – marketplace fulfilment services or fulfill an order themselves.
Let’s weigh in the pros and cons and find out which of the two is better for an online seller.
What is marketplace fulfilment?
It’s a service provided by ecommerce players to their sellers. Those who sign up for this service, get assistance in storing inventory, packaging, shipping and delivering orders. This is done in exchange of a set of fees such as courier charges depending on the product category and size.
For the same, the companies have invested heavily in building huge warehouses across the country and tied up with various logistics & delivery service providers.
Snapdeal Plus (SD+), Fulfilment by Amazon (FBA), Flipkart Advantage and Fulfilment by Shopclues are fulfilment services by ecommerce leaders Snapdeal, Amazon, Flipkart and Shopclues, respectively. Amazon has over 21 operational fulfilment centres, across 10 states in the country. Snapdeal has over 60 fulfillment centres across 20 cities. Flipkart has 17 as of now, but they plan to set up 80 to 100 fulfilment centres. Shopclues has 4 as of now.
It’s when a seller decides to take care of order fulfilment on his or her own. This means taking entire responsibility of holding inventory and picking up a reliable logistics partner for packing orders, shipping and timely delivery.
Another option that falls under this category is to outsource order fulfilment process to a third party instead of using marketplace’s service or doing it yourself.
Which one is better?
“My advice to any online seller would be to go for marketplace fulfilment out of the two options”, says Vijin Nair, Category Manager at Browntape Technologies.
According to him, not only the logistics cost gets reduced but also delivery is faster without the grueling responsibility. Nair explained why he holds that opinion,
“The responsibility of the order delivery is on the marketplace. Fast shipment is one of the factors that a marketplace ensures, which in turn helps sellers to earn high ratings.”
He further added,
“All local courier partners cannot be trusted for safe delivery of the package. If the package is lost, it is almost impossible to trace. On the other hand, if the logistics is handled by a marketplace, a seller can apply for a reimbursement if package is lost.”
Here’s a table to help you understand how the delivery cost reduces drastically in the case of marketplace fulfilment:
In all fairness, the advantages of marketplace fulfilment overshadow the cons and also pros of self-fulfilment. An ecommerce portal is a crowded place and if a ‘Flipkart Advantage’ or ‘SD+’ tag gets you listed on top and noticed then everything else pales in comparison. Not to forget the added advantage of COD, reverse pickup, and customer support.
“After several hits and misses, now I only buy products that are fulfilled by ecommerce sites themselves, especially for high-end products and prepaid orders. It’s risky to trust sellers that don’t have the tag (marketplace fulfilled),” shared Rakesh B, a regular online buyer.
A seller can opt for self-fulfilment if it’s a small business, established brand or niche products such as rare imported items, memorabilia and collectibles. Toy enthusiast Mehul S stated, “In the past few months, I have bought many collectible action figures that were seller fulfilled and not Amazon fulfilled. But I made sure to read every feedback and scan through ratings and history before clicking on Buy. Plus Amazon’s A to Z guarantee was reassuring.”
Processing orders is a time-consuming activity and if not done well, it will affect your ratings and future sales. If the accountability can be passed on to the ecommerce site, then a seller should seriously consider it. After all, ecommerce companies wouldn’t like to dilute its brand value by delivering shoddy service.
Indian Online Sellers, have you used any of the marketplace’s fulfilment services? Please share your experience and help other sellers to make a sound decision.