According to a report in the ET, several hundred sellers at Flipkart are not happy with the new return policy of Flipkart and have decided to halt selling on the platform. As per these sellers, the new changes are “unilateral changes” that would increase the cost of doing business.
Flipkart had introduced new policy changes which include a 5% increase in commission fees levied by the company. However, since other e-commerce firms also levy a commission fee with Amazon also increasing the fee recently, this is not a major concern of sellers.
The concern is about changes in return policy according to which sellers now need to pay the shipping fee, reverse shipping fee, and collection fee on every product returned by the customer. Previously, sellers need to just pay less than 1% of the order value on returned goods and that too, only in case, when sellers were at fault themselves for return.
Since return percentage is often quite high ranging from 8% to 10% in most categories, the new policy will lead to a sharp increase in costs incurred by sellers. ESellerSuraksha, which is a group of about 1000 online sellers conducted a survey among 300 sellers asking them about feedback of this policy.
98% of the sellers thought that new rules would “kill sellers” whereas about 57% said that they would “rethink” selling on Flipkart. More than 42% of them were also planning to increase prices of goods by 15%-20% to make up for their impending losses due to these changes.
A merchant selling lifestyle products on Flipkart, on the condition of anonymity, told the ET,
It is not really the increase in commission that has upset sellers but the frequent policy changes done by Flipkart without consulting us.
Another merchant, who is a senior member of All India Online Vendors Association (AIOVA) has revealed that 300 out of about 1000 merchants of their group have already decided to quit Flipkart due to its decision of passing the burden of product returns to sellers.
However, Flipkart has strongly defended its new policy and said that it would make things easier for sellers by offering predictability and control over payments. A spokesperson of Flipkart said,
Our returns policy and process continues to be the best and the easiest in the industry.
The company has also advised merchants to adopt right practices such as effective cataloguing and packaging to prevent product returns due to false shipments.
Recently, Flipkart also reduced the time period during which customers can return products to ensure quicker arrangement of products and timely replacement. This, Flipkart believes, would ultimately lead to a more seamless experience for both sellers and customers.