Snapdeal might have many flaws according to its sellers, but the marketplace has managed to do good things too like deliver products the fastest, boost SD+ seller sales and now make early COD payments to online sellers.
Early Payment Option = Capital Assistance
In an email the marketplace informed its sellers that they can request for cash on delivery payments 3 days in advance. There is a catch though. Those availing of this facility must forfeit 0.5% of that payment as a nominal fee.
The marketplace has introduced this service in the attempt to enable easy cash flow for online sellers. This should allow them to meet working capital requirements.
The following email illustrates this capital assist feature from Snapdeal:
Word from the Online Marketplace
Snapdeal launched capital assistance last year in August, like its competitors Flipkart and Amazon which already have financial assistance programs (for sellers) in place. However, this aspect is still in the trial phase.
The marketplace said, “We continuously engage with online sellers to help them become more successful. To take a broader view, Capital Assist is conducting a survey among select sellers on Snapdeal to assess their requirements. It is a standard practice to seek seller feedback on any new service or policy we plan to introduce.”
Since the initiative is still at the feedback stage, steps will be taken according to seller response. Also, this arrangement is not a change of any policy the marketplace said, just an optional facility for those interested in it. The procedure will be conducted between the seller and banks tied up with Snapdeal’s Capital Assist platform.
Do Online Sellers love it or hate it?
Despite the etailer stating the “early payment option” will benefit online sellers, they are in the least bit impressed. Especially because with the 0.5% charges!
eSellerSuraksha president, Sanjay Thakur said, “It would have been better if payment was made upfront instead of just three days before due date.”
Questionable features and policies
IOS spoke with AIOVA about this new feature from Snapdeal and how they felt about. The association recently met with the Minister of State for Finance for the initiation of an ecommerce regulatory body.
The sellers group feels there is certainly something fishy about this approach by Snapdeal. AIOVA said according to regulations from the RBI, a nodal account must be maintained by etailers, e-wallet companies and payment gateways. The funds in this account cannot be touched by anyone nor do they belong to anyone, till the particular product sold has reached the consumer. So promising advanced payments seems impossible.
The marketplace may say it is making advanced payments out of its own pockets to provide this service, but how can they, AIOVA questioned. “Snapdeal claims to have 3,00,000 online sellers. Do they honestly have the bandwidth or large enough pockets to pay all these sellers in advance? It’s highly uncertain! Also who said they could charge nominal fees of 0.5% on the seller’s money?” the association said.
“If you ask them about it, they will say this is a pilot project to engage seller reactions,” added the association. Their opinion is the marketplace is simply trying to cover up its very questionable features and policies.
What do you think online sellers? Does Snapdeal have a hidden agenda?