After putting a cap of 70% on discounts for vendors’ benefit, Snapdeal has announced a new program for sellers – Dynamic Marketing Fee Program. The ecommerce player has decided to apply revised & reduced fees on selected product categories instead of the regular Marketing Fees.
In its mail to sellers, the marketplace informed:
“We are constantly innovating to help you grow your business. As a part of this effort, we are introducing a dynamic marketing fee program effective from 18 May, 2016.
Under this program, Snapdeal may reduce or vary its marketing fee from time to time on one or more products (category/subcategory) as it may deem fit at its sole discretion. However, once reduced, any increase would never exceed the limit of maximum marketing fees prescribed under the commercial terms segment.”
List of sub-categories for Dynamic Marketing Fees
According to Snapdeal, following are the benefits of this program for sellers:
- Stay ahead of competitive pricing
- Potential to get buy button
- Enjoy high buyer conversion
Is this program for sellers’ benefit or buyers’?
By now we know, DIPP has warned etailers to refrain from any activities that directly or indirectly influence the price of products.
Snapdeal claims that Dynamic Marketing Fees will help vendors to increase their sales. But sellers feel that this program is the marketplace’s smart trick to continue giving discounts.
Snapdeal’s mail states,
“Seller hereby voluntarily and irrevocably agrees to pass on the benefit owing to the applicability of Dynamic Marketing Fee to the Buyers and accordingly the price of the applicable Product (at which such Product is exhibited, advertised, made available or offered for sale by the Seller on the Website) shall be automatically adjusted.”
The mail further says,
“Your continued use of website, on and after May 18, 2016, would be considered as your acceptance on this program.”
Sellers’ Association React
Since this program is applicable to sellers who fulfill the defined criteria such as rating, fulfillment mode, sellers feel that Snapdeal will manipulate this clause and will violate the level playing field criterion specified by DIPP.
The All India Online Vendors Association (AIOVA) shared with Indian Online Seller,
“Through such policy, Snapdeal reserves the right to reduce commission on any seller or product it wants to. A normal seller will not be able to avail this benefit; hence, his product would become uncompetitive. Snapdeal says that only vendors having a specific rating can take part in this. It is common knowledge that Snapdeal rating policy is flawed. There is no policy. Even Kunal Bahl cannot write down Snapdeal’s policy on a piece of paper. This will polarize the market, and Snapdeal will gain from it by giving discounts on specific vendors.”
The arguments put forward by AIOVA are valid. Over to your, Snapdeal. And online sellers, what do you think of Snapdeal’s Dynamic Marketing Fee Program? Please share your views.