“The sheer increase in volumes that we had been seeing every single day in the affiliate marketing space prompted me to think that somebody has to be selling all this stuff, so why not?” quips 24-year-old Sugam Jain from New Delhi. Thus was born WonderKart, to sell mom and baby products, and kids toys and games across different marketplaces.

Sugam is also the co-founder of GoPaisa.com, one of India’s largest cashback & coupons site started in 2012. But he is not associated in an operational capacity anymore.

Have his views on online marketplace selling changed? Does he still feel attracted to the concept? Let’s find out, in this IOS exclusive interview with the young and chirpy entrepreneur.

Apart from the above thought, what attracted you to online selling?

Marketplace sellers are the backbone of the industry, but I wanted to understand what makes the entire ecommerce machinery run. I could see it as a challenge I wanted to tackle to create a high volume ecommerce business.

Also, my primary passion has been technology, so I also wanted to see how technology affects an online seller’s margins. I thought I can enable building such products to help us all.

Where did you start selling? How was the experience? Challenges, delays?

• We started selling on eBay and I would say it is the best platform to start with and learn the operational details of what it takes to sell online in general.

It is completely self-serve so you have to start from scratch and then it’s just easier to grasp policies and procedures for rest of the marketplaces and their fundamentals. Gradually, we expanded to other marketplaces which took some doing but we were able to do so successfully within a period of 45 days and volumes increased substantially.

Initial challenges included logistics, packaging and accounting.

• We had to deal with high logistic charges because of less volume.
• Using cheap couriers resulted in damages and ultimately lowered ratings.
• Accounts got suspended.

But I feel it’s a necessary part of the online selling journey. Without a few suspensions and penalties, nobody tries to improve processes resulting in a loss of growth rate.

What is your returns rate? How do you tackle it?

It comes up to an average of about 10-15%. We try and improve listings and packaging to reduce return rate of a particular product. But beyond one point returns cannot be lowered; it’s the cost of doing business.

• We have defined clear policies about type of returns.

Do you think selling on an online marketplace is profitable? Why or why not?

• If done properly, why wouldn’t it be?

Selling on marketplaces is definitely profitable. It may not be as highly profitable as one would want but margins are always category dependent. Also, they depend on sourcing and operational efficiency. We have to run a tight ship to achieve margins.

If you could change 3 things about a marketplace to benefit a seller, what would they be?

1. Marketplaces need to change the amount of control they want to exert over a seller’s business. They should focus more on controlling their own business and should not try to force sellers to opt for their services and various seller programs.
2. They need to be more transparent overall.
3. Seller panels should have more catalog management tools.

What is your honest opinion about ecommerce? Is it a boon or bane?

I don’t see ecommerce as an industry but more as a way of life. It is something that has evolved naturally with technology like the rest of the world has. It has been there since the advent of internet, maybe in a different form and will always be there. Maybe the models, way of selling things, accepting payments etc. may change with time.

What are 3 things about online selling that are equivalent to stepping on a minefield?

1. Listing stock without having inventory.
2. Selling counterfeit products.
3. Ignoring marketplace communications and guidelines.  

Online store or marketplace- which one is better? Why?

Both models of selling have their own pros and cons. It totally depends on the nature of business, budget and also no.of SKUs. I don’t suggest going with own online store unless you have at least 250+ SKUs. Online store takes more investment in terms of development and marketing, and it needs dedicated resources. So these things should be kept in mind before starting.

Do you think marketplace should absorb reverse courier charges and COD charges? Do you feel they should be the ones paying for it since they provide the services?

I don’t think marketplaces need to absorb the charges but sellers should be given the liberty to choose if they want to provide this service or not. But yes, the practice could be harming the market overall. Once the investor funds dry up, which enables marketplaces to absorb these costs, reality will strike. Buyers will have to pay shipping, COD and return charges which will lead to decline in sales volume.

So it’s better that buyers are educated about the same and everybody reaches a reasonable level of understanding to share these costs.

Do you think anyone and everyone can be an online seller? Why or why not?

Sure, anyone willing can sell online. But I feel it does not make sense for a manufacturer or direct importer to get into online selling as it needs dedicated infrastructure and procedures. But if someone has a focused approach and the required ideology, and wants to create a private label, why not?

Who agrees with Sugam?