Snapdeal cuts marketing fee to lure sellers

E-marketplace operator Snapdeal is changing its policies for its over 3 lakh online sellers in a bid to increase their participation on its platform and attract more sellers at the same time. The changes, effective July 14, include reduction in marketing fees by up to 18% for over 120 sub-categories, reduction in returns window, sharing the cost of returns.

The reduction across digital products, electronics, women's fashion, fast moving consumer goods (FMCG), sports and fitness goods, fashion jewellery, kitchen appliances, automotive accessories etc ranges 0.2% to 18%.

"Post this change," the company said in a statement, "Snapdeal will have the lowest marketing fee for around 300 sub-categories out of the total approximately 600 sub-categories across all leading marketplaces." It has also marginally increased marketing fee ranging from 0.5% to 5.5% for nearly 30 sub-categories.

Vishal Chadha, senior vice-president - market development, Snapdeal, said the reduction in marketing fees among other things will foster growth for our sellers. "We have worked closely with our sellers, and basis their feedback we have made these policy changes to make them in-line with e-commerce industry best practices. Reducing returns from the market by ensuring best in class logistics and technology advances is a key focus area for us.

Snapdeal has agreed to bear the cost for reverse pick-up and payment collection, while packaging and shipping will be borne by sellers. In case of replacement /exchange also, reverse pick up costs will be borne by Snapdeal.

"While we share costs with our sellers in case of return, we will continue to forego marketing fees to reduce the costs for sellers," said Chadha, adding that the policy changes will help the company build a fair, transparent and competitive marketplace.

Additionally, Snapdeal also unveiled a simpler framework of dos and don'ts for its sellers. "The self-serve platform helps sellers resolve their queries easily and together with the simplified policies, this is expected to enable the sellers to avoid the imposition of penalties due to ignorance or complexity," the company said.

Snapdeal's move comes at a time when the online seller community is in a tug-of-war with Flipkart. Sanjay Thakur, president, eSeller Suraksha (eSS), a body of over 1,500 online sellers from across the country, said, the biggest change is the removal of 'No question asked' policy and fixing seven days for returns, which will help to reduce irrational returns and frauds by buyers.

"The only negative point is charging shipping from sellers for RTOs (undelivered courier returns). However, the conditional returns will further squeeze the fraudulent buyers thus bringing down the returns ratio," said Thakur, adding that all in all it's a welcome move and will motivate sellers to increase their focus selling on the Snapdeal platform.

The fight between Flipkart and online sellers is certainly proving beneficial for competition. Last month Amazon.in took advantage of the market scenario and reduced commission rates (referral fees) charged to sellers for using its platform. The revised rates, Amazon.in, had said in a statement, can significantly help sellers to perform even better/ and succeed in their business. Amazon.in said that it started with 100 sellers three years ago and has crossed 1 lakh sellers during April-June quarter growing at 250% year on year and adding over 90,000 products daily.

With Flipkart not heeding to their concerns, online sellers have reduced their focus from selling on the portal while increasing efforts on Amazon.

While on the one hand Flipkart has been citing increase in the number of sellers on its platform from 90,000 to 93,000 post the policy change, the online sellers' fraternity, on the other hand, said Flipkart has been suspending / putting on hold sellers' accounts on its platform citing internal quality checks. "Sellers are being forced to open new account if they want to continue selling on Flipkart and that could possibly be the only reason for increase in the number of sellers on their platform," a seller said.

"Flipkart, it seems, only wants to work with a handful of third-party sellers who will function like WS Retail. This is being done to comply with the 25% and less sales volume limit criteria set by the government for e-marketplaces with foreign direct investment (FDI). These handful of sellers are likely to control a majority (90%) of the sales on Flipkart and the balance 90,000 sellers will fight for the 10% of the sales," said another seller.