Everything that’s wrong with ecommerce marketplaces narrated by online sellers

Rebecca Menezes | Sep 10, 2020

Online marketplaces attract shoppers with the promise of discounts, variety and the ease of placing orders. Similarly, online sellers are also baited with the promise of maximum exposure, low costs and higher earnings. As time progressed from 2014, when online shopping became a hit in India, merchants on online marketplaces began feeling disappointed with online marketplaces. That’s because their online selling path was riddled with hindrances either caused, or ignored by these ecommerce platforms.

Marketplaces are the first choice for online sellers to launch their retail ventures. And, by 2020 the number of online sellers will grow to 10 million. Does this mean marketplaces will prioritise seller struggles or will concerns continue to multiply?

At the moment, etailers appear to have their hands full as they strive hard to cut their losses. Some claim they are charging extra, withholding payments, delisting sellers and favouring top brands to reach profits. All these means are certainly unfair to online sellers looking for opportunities to build businesses and make ends meet.

Indian Online Seller (IOS) investigated the matter. We spoke with a spectrum of sellers to understand different concerns regarding marketplaces. Here are some of the pressing matters that have sellers worried about the future of their online selling businesses.

Seller concerns about online marketplaces

Concern #1 – Lack of transparency

Sahil Bansal the owner of Fur Jaden, a women’s luxury bags brand, says one of his biggest concerns is Flipkart’s internal working that is unclear and inconsistent. The seller has 2.5 years worth of experience in ecommerce and feels that Flipkart has been very unpredictable and this makes it difficult to determine the requirements to do good business.

Sahil says, “With Flipkart, sales are not logical. Initially, we would receive 15 orders a day on the platform and overnight our sales dipped to 1-2 units a day and have been the same ever since. We believe this could be due to an internal algorithm change.”

That’s not all, when Sahil worked on his seller metrics he managed to obtain the high ratings required to be a gold seller. However, Flipkart did not change his seller status for months. When they finally did, Flipkart made new internal changes that pushed Sahil back to the silver seller category.

“Another problem with Flipkart is, they are always in a hurry and do not scan products in front of the seller when picked up. The products picked up are scanned at the marketplace warehouse and in case the orders cannot be scanned properly, Flipkart will cancel the order and return the product. Out of 15 products sold at least one faces a dispatch breach,” the seller shares.

Flipkart seller Gourav seconds this claim. He too says that Flipkart never scans his products in front of him. So, in case they are unable to scan them at the warehouse, he suffers from ready to dispatch (RTD) breach. And, this brings down his metrics.

When products are returned it affects seller metrics. Plus, sellers are charged shipping fees to send the product, fees are collected to return the product and a fixed fee is also charged by the marketplace. All of this can be avoided if the courier person simply scanned the product during the pickup, claims Sahil.

The seller feels that marketplace should also be more transparent with online sellers so they understand how things work. The high fashion accessory merchant also believes that Flipkart needs to figure out its business and maintain an internal process that’s not likely to change so often.

Concern #2 – Varying product image requirements

Bipin Agarwal a lingerie seller with almost a year’s experience in online retail says marketplace image requirements are his dilemma. He states that it is not logical to have a different photo shoot for each product on different marketplaces due to their different requirements.

“Besides back and front views, marketplaces want a 45 degree angle view for apparel. But sometimes, a 35 degree angle is better than the 45 degree angle,” says the seller.

He further adds, “Marketplaces like Myntra receive a commission from photo studios they partner with. So, they recommend sellers to use these studios and approve images only after they are taken by these photo studio partners. According to some marketplaces, the model used in product images also needs to be approved by them.”

The life of a product image is 3 months according to Bipin. He claims that big brands like Victoria’s Secret change their images every month to keep their products looking fresh and attractive. But the rules by marketplaces make it difficult to add new images.

Bipin says, “Marketplaces must –

  • Consider the seller’s criteria
  • Maintain some form of objectivity and subjectivity behind their image guidelines
  • Provide sellers with freedom to be creative (and reject images in case of obscenity or unethical practices)
  • Sellers should be allowed to decide on the kind of model and photo studio to use”

Concern #3 – Encouragement of unethical behaviour

“Snapdeal says they returned our products to us, but the products were never received by us,” Aparna Jain informs us.

The maternity wear online seller claims that Snapdeal does not return her products at all. On multiple occasions, the marketplace said that returns were attempted however her place of business was closed, so the courier person retreated and the delivery was not successful.

“We have a guard present at our place of business who accepts our return products,” says Aparna.

As a result, it is strange for the marketplace to claim that the place of business was closed and there was no one to receive the product. The seller lost a lot of money due to this recurring situation. When a product return cannot be completed, Snapdeal notifies the seller by email and allows only 24 hours for a reply to raise a claim requesting the product return be attempted again. Once that time is up the seller loses the product and is not allowed to claim payment.

“When we questioned Snapdeal about non-delivery of our goods, they informed us that they were already delivered to us. So, we asked them to provide us with proof of delivery (POD). We did not receive any response after this,” Aparna recalls.

“This is not expected from big ecommerce platforms like this. To cut our losses and troubles on Snapdeal, we quit the marketplace,” she states.

Concern #4 – False promises about sales

Fur Jaden has products listed on Paytm, but according to Sahil, he never sees any response for his products here. He mentioned that the marketplace advised him to participate in their sale where he’s brand would have to offer an extra 20% off to encourage sales. This, however, resulted in zero conversions for the online seller on the retail platform.

Concern #5 – High returns, wrong returns, used returns & no returns

Almost every online seller we spoke with revealed they were concerned about product returns.

“For most sellers, I believe this is something to really worry about. Return(s) are very less in electronics, but sellers dealing in clothing niche definitely worry when a customer returns a used clothing item, as it cannot be resold,” claims Aakash Adlakha, an appliance and electronics vendor.

For health and personal care seller, Abbas Bhojani returns mainly occur due to COD. This is because buyers do not accept deliveries. Then there is wastage due to costly packaging material and loss of product in some cases he explains.

He also informs us that fraudulent buyers keep returning empty packages or different products. Sellers can spot these bad buyers, but due to cancellation charges faced, there is not much that can be done to avoid this problem.

“On Snapdeal we received many wrong returns. Irregular pickups began on the platform and our sales fell, returns increased and so did wrong product returns. Our payment began being held back when we made claims about the wrong products being delivered to us. We were given unclear reasons for our payment delays. This is even after offering video proof of wrong returns,” says Sahil.

On account of high returns, withheld payments and constant losses, Sahil closed his account on Snapdeal.

For online seller Aparna, Shopclues keeps returning the wrong product to her. When questioned about this, the etailer washes its hand by saying,

It was the right product when we checked it at our end.’

On Flipkart, she received her product in a used condition. After a long struggle with the marketplace, she was finally given reimbursement. But, here’s the interesting bit –

“Flipkart reimbursed me only Rs.30-40.This is not even half the amount of the product. Neither can I use it to clean the product for resale,” says Aparna.

Concern #6 – Delayed payment or no payment at all

The second biggest concern for online sellers was payment. With recent marketplace closures and non-stop struggles to defeat losses, sellers are concerned about payment delays and non-payment of dues.

“The marketplace should clear seller payments without major delays,” mentions homemade product seller, Priyanka.

“Payment cycle of some marketplaces is very long. Payment cycle of 15 days is very long, it creates errors in payment ledgers,” says 3-year online seller Sagar Sharma of Royalshe, a ladies footwear brand.

In many cases, delay in payment or non-payment may stem from a product return situation gone wrong, like Sahil explained above. And sometimes, payment delays may be due to irrelevant deductions by the marketplace, like Saurabh Kataria’s case below. The seller commented about payment delays under an IOS report uncovering hassles faced while selling on LimeRoad. Here’s what the seller went through to collect his dues,

Concern #7 – Random delisting

Gourav, an apparel seller on most major online marketplaces reveals that lack of transparency is also the case when it comes to marketplace policies. Almost a week ago, he received an email from Jabong stating the termination of his seller contract with the marketplace after 30 days.

There was no explanation or warning for anything. They have also frozen my inventory and we may have to deal with penalties. We can only print labels and ship products. There is no seller safety here, it is a complete dictatorship,” says the apparel seller.

He has done everything possible to meet the standards set by Jabong. Be it price wise or quality wise. When questioned about this issue, the marketplace refuses to meet or even speak over the phone with the seller.

Myntra, on the other hand, delists his products.

“We have reduced our prices like the marketplace requested. We even paid for product quality checks by the marketplace, still, our products are returned because they are the wrong size according to the customer,” Gourav conveys to us.

Concern #8 – Inconsistent product listing

Myntra takes approximately 60 days to list new products. There is no consistency when products are listed. And, by the time our products go live here, they end up going out of stock (due to sale on other platforms),” explains Sahil the founder of Fur Jaden.

On Jabong, he says there are errors when products are finally listed. Product images uploaded sometimes do not match the product descriptions. For example, the seller says on Jabong the product listed was titled and described as a tan bag. But, the image showed a royal blue bag. The rectification process for this is usually stretched to one entire month, causing troubles like wrong dispatch, returns, order cancellations, seller unreliability (in the mind of customers) and a lot of confusion.

Concern #9 – Absence of seller support

Ambrish Kumar Kushwaha, an online seller and owner of Kaylon Lifestyle, mentions that there are multiple hassles faced on online marketplaces but these can be solved only if sellers could get in touch with marketplace personnel.

He lists Paytm, Snapdeal, Shopclues and Flipkart as marketplaces without a toll-free number that sellers can call to register problems. However, according to the seller, Amazon and Flipkart offer the most satisfactory seller support when compared to the other platforms he sells on.

Mamata Negi, on the other hand, claims it is painful to communicate with Amazon’s support team. The seller received the same machine generated response for 2 months straight but no solution to her problem. When IOS exposed Amazon’s seller support flaws, the seller commented the following:

“Marketplaces should be available on phone to provide seller support for a good experience and long-term relationship,” seller Priyanka strongly believes.

Concern #10 – Rising marketplace fees

Amazon recently increased its commission, but it’s not the only marketplace with excessive charges that alarm online sellers.

Ambrish sells on Flipkart and feels their commissions are high.

Mobile and fabric seller, Vishal Naiker claims, “Online portals like Amazon charge more money if any product is returned.”

Aakash, an appliance and electronics online seller says they set the selling price after calculating the average shipping of products. However, with unfair practices by courier companies, we are charged higher fees due to returns which either cause losses or very small margins.

Will marketplaces keep doing their own thing?

As the ecommerce industry grows, along with its progress online seller concerns have increased. Payments are a rising concern and it looks like returns will never die down. Snapdeal has joined the payment delay club. Flipkart went back on its no-refund policy in less than a week, calling it a misinterpretation. According to Flipkart, it is the seller’s favourite due to its low costs. But, sellers have clarified that whatever fee reductions the etailer introduced are minuscule.

Amazon is spending on infrastructure which it believes will assist the seller community. At the same time, sellers are likely to be charged high commission fees this month. Snapdeal tried to reduce ecommerce fraud, or so it claims, by removing SKUs from invoices. However, sellers claim it this has only made order processing a hassle.

It appears etailers are still experimenting as they haven’t found the right strategy to manage customer, seller and their own needs. Based on the insights shared with us, it’s the sellers who always receive the short end of the stick. So, what happens once sellers have had enough of marketplace ignorance? Can we expect a revolution or a gradual fade away?

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Rebecca Menezes

Rebecca Menezes

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