India’s leading online marketplace, Flipkart has reduced Service Level Agreement (SLA) procurement time to two days, which could hinder sellers who manufacture just-in-time. Currently the seller and marketplace agree on the SLA procurement time, which could be even as much as 6 to 7 days in some instances.
It is understood that Flipkart is implementing this new policy based on analysis that shows sales greatly increase if orders are fulfilled on time, as online customers are hungry to get their hands on the goods
Flipkart has stated that after Friday the 22nd of January 2016, products with procurement SLA’s longer than 2 days will be de-activated. To avoid this extreme measure, Flipkart has urged all its sellers to update and reduce the SLA procurement time to 2 days.
SLA refers to a contract that stipulates all the terms and conditions between seller and marketplace. In this case, it is specifically about the agreed time taken for sellers to dispatch their product with the courier once an order has been placed with the marketplace. Snapdeal already has a 2 day policy in place, while Paytm and Amazon still give the seller a choice (within reason), depending on the category.
While this new policy will not harm efficient sellers much, it could prove futile for sellers who prefer to manufacture only once the order has been placed. Sellers will now have to analyse and forecast sales to make sure they have enough inventory in stock to fulfil demand and avoid losing out to competitors. Are you prepared?
Online sellers, let us know your views on the new policy!
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