It’s just days after Flipkart announced its new policy changes. The marketplace claims to have changed its fees structure for simple and easier understanding. The only thing everyone understands about Flipkart’s new policy is that it is upsetting online sellers.
The marketplace claims to have simplified things, but the new charges introduced apart from the hike in fees are still unclear to online sellers. And saying they are annoyed with this new policy is now an understatement!
Many online sellers and online seller associations voiced their protests against the change over social media. On twitter, the trending hashtag is #SellersQuitFlipkart.
Some sellers added a bit of humor as they pledged to the #SellersQuitFlipkart movement on twitter:
IOS reached out to the All India Online Vendor Association (AIOVA) and eSellerSuraksha (ESS). We asked them if any sellers on Flipkart have confirmed seller account deactivation. Both say the online sellers who mentioned quitting Flipkart on 20th June, are serious about their decision. Should this new policy stay in place then they will reduce their inventory on Flipkart to zero.
As for those willing to stay on with the marketplace, they will undergo pricing adjustments to maintain transfer prices, says AIOVA.
ESS claims, those who plan on managing the high cost of selling on Flipkart, need to increase their prices by 15-20% in addition to shipping charges.
Flipkart is a big deal in this country. A 75 million consumer base is definitely something sellers should consider. What could be the repercussions of leaving Flipkart?
ESS always suggests that its members not depend on one platform.
“Majority of our members sell on multiple platforms. Hence, the impact of closing down/heavily reducing business on Flipkart will be minimal considering the growth of other marketplaces in the last year. Along with this, we’re already in talks to on-board sellers in bulk to the new marketplaces like Tata Cliq, Relience Ajio and we’re planning for the same with the international players like Alibaba and Rakuten,” ESS informs us.
According to eSellerSuraksha, it is evident that sellers who remain on Flipkart, in spite of this policy, will suffer grave losses. Unless, they shoot up their prices by 20%!
“We’ve created an ‘Optimal Selling Price Calculator’ which will help our members to calculate the effective margin which will help them to set the selling price accordingly .We’ve attributed the anticipated loss due to returns & replacements in the calculation based on history.”
There is no online marketplace supervisor so Flipkart sellers will need all the help they can get.
AIOVA have set up discussion forums and have been in touch with Flipkart on the subject. They also joined other seller associations to create educative material for Flipkart sellers to thoroughly understand this policy.
ESS started its campaign against these new rates since the 3rd of June. In addition to this they have also put together a detailed article on this policy to assist Flipkart sellers plan their next step accordingly.
There certainly is some good in this policy, however small it maybe. A few positives still exist like:
But we need to look at how this affects the average Flipkart seller. That is the whole picture and it involves huge disadvantages that online sellers have questioned.
“The disadvantage here is increasing costs. There are ways to control the costs, which have already been suggested to Flipkart, but they aren’t interested at this point. The advantages are for a few categories with regards to the 10 days return policy. The advantage is also only available to WS retail who will have the cheapest product across categories,” says AIOVA.
ESS responded along the same lines saying,
“The cost of doing business has definitely increased. It is very evident how the disadvantages heavily overweigh the advantages. The only positive of the new change is in terms of shipping dimension & weight calculation. Heavy commission charges (30-40% increase), Fixed Fee Changes (a 300% increase) and shipping charges in case of refund/exchange are no advantage.”
When asked what they feel the marketplace can do to patch things up with agitated sellers, In AIOVA’s opinion,
“There are lots of things Flipkart has to do. We have already provided them with our suggestions. However, only the policy has changed, the policy makers remain the same. They aren’t accepting our offer to help them during policy making. Nor are they discussing the same prior to implementation. Post implementation they only beautify the same by adding sweetened comments to it.”
ESS believes there are changes the etailer can make,
“Firstly, the reduced return window (from 30 to 10 days) and the sellers ability to charge for shipping impacts a sellers profits. Now a request for return, replacement or refund will bring down that profit extraordinarily. So either the fees for returns needs change or the “No Questions Asked Return/ Refund Policy”.
“Secondly, they have to simplify marketplace deductions in a better way. commission fees, fixed closing fee, collection charges, pick and pack fees, storage fees are only making things more complex. And to a certain extent it deceives the seller.”
Flipkart has at least 90,000 registered sellers. So when you look at the online seller protesting, you can’t help but question why the protesters aren’t multiplying? Do online sellers assume the Flipkart will simply cave and end this ridiculous policy?
Or do they feel Flipkart is right on some level. Maybe there’s an angle we’ve all missed?
Could it be a big portion of Flipkart sellers are afraid to leave the marketplace? For some it could be the biggest source of income. And for those whom it isn’t, leaving will make no difference.
Flipkart seller Mayank Goyal like many others feels, the marketplace is up to its neck in debt and with all the cash crunches it’s been doing, pushing the financial burden onto sellers could be the best way out.
According to Mayank, “This is one pathetic policy introduced by Flipkart! I think 20th June will now be called #FLIPKART_MUKTI_DIWAS.”
Indian online sellers how do you choose to react?
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