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Eyeing better cashflows, Flipkart continues to come down hard on sellers

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Continuing with its new seller policies, Flipkart has announced a fresh new policy for sellers on its platform. The eCommerce firm has now increased seller commission rate in key categories, despite heavy protests from sellers.

Along with the increase in seller commission rate, the sellers will now also have to bear cost of product returns. It also reduced product return days from 30 to just 10. Flipkart has not revealed the exact numbers for commission fee.

Commenting on this, Anil Goteti, said,

This puts the onus on the seller on how to reduce returns, improve quality and the overall customer experience. Our incentives are now aligned with those of the sellers.

The company is also working to make sure that more and more sellers uses its logistic solutions. Thus, many sellers have started protesting against the company for these changes. Sellers are of the view, that this move will result in increased price of products on platform. Many seller have already marked all their products on the platform as “Sold Out”.

However, it seems that Flipkart is in no mood to entertain such demands. The company seems to be believing that few hundred sellers won’t affect its business. Moreove, its more of a brand loyalty test for the over a decade old brand, to see if sellers stick to it despite these measures, or go for Amazon — which currently offers much better incentives.

As per reports, Flipkart is planning to move towards a faux-marketplace model. In this model, majority of the sales will be generated by a handful of sellers called “alfa sellers”. These sellers will be similar to WS-Retail, where Flipkart will have more control.

This will enable company to meet the guidelines of capping sales of single seller to 25 percent of the total sale on platform. It will also ensure consistent seller and buyer experience.

On the other hand, Amazon has reduced the seller commission rates on its platform. Amazon is slowing closing the gap with Flipkart to be the leading eCommerce platform in India.

With reduced seller commission rates, it seems that more sellers will be attracted to Amazon. Also, Jeff Bezos recenly committed to pour in additional $3 billion in Amazon India. Thus, making it clear that Amazon is ready to do whatever it takes to take the pole position.

Since Flipkart’s launch in 2007, it has become the largest and most popular commerce platform. However, since last year, its brand and customer service suffered in comparison with Amazon.

Apart from regulatory hurdles, Flipkart has been facing a series of valuation markdowns. Presently, it is struggling to raise further funding round at its desired valuation.


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