Snapdeal, Flipkart cut payment cycle, charges to retain vendors

E-marketplace operators Snapdeal and Flipkart are taking steps to retain vendor/seller base upset over their recent policies.

A sizeable percentage of vendors had gone inactive citing payment issues and unfriendly policies that made selling difficult on these platforms.

Snapdeal has changed its payment policies to woo vendors/sellers annoyed by its payment related issues. The Alibaba-backed platform has reduced the seller payment cycle by 40%, thereby enabling faster payments to its 3 lakh vendor base. With this, the company claims fastest payment schedule among e-marketplaces in the country.

While Snapdeal did not share details, DNA Money has learnt that the payment cycle has been reduced by two days for vendors using the SD+ (products stocked at Snapdeal's warehouses or facilitation centres) model as well those using the drop shift (not using the Snapdeal's warehouses or facilitation centres) way of selling.

Sanjay Thakur, president, e-Seller Suraksha (an association of over 1,500 sellers), said the payment cycle with SD+ is five plus five, which basically means payments for products shipped between day one to day five will be made on day 10 and so on.

"In a month, a seller would get paid six times depending on the shipment schedule. This five plus five days (10 days) has now become three plus three days (six days) – a reduction of four days. Similarly, for drop shift the payment cycle was eight plus seven, which has now become five plus five," said Thakur, adding the move will go a long way in helping sellers plan better and increase business.

Faster payments, Snapdeal said in a statement, will enable them (sellers/vendors) to use working capital more efficiently and generate additional business without needing to invest additional funds. "For sellers working on the SD+ model, this will mean a whopping 40% faster payment, which is also the best in class in Indian e-commerce industry," it said.

Similarly, Flipkart has reduced marketplace fees for its sellers, thereby cutting the cost of doing business across verticals for over 100,000 sellers. While fixed fee is set to become cheaper in about 80-90% of product verticals, there will be a reduction of 40% in collection fees for all cash on delivery (COD) orders. Additionally, shipping fees will see a reduction across various slabs for local, zonal and national deliveries. In fact, 24 verticals are likely to see the highest reduction (up to 10%) in the cost of doing business for all sellers.

Flipkart said in an emailed response to DNA Money, effective March 15, all sellers across its verticals will enjoy lower charges. "With this reduction, it becomes cheaper to sell on Flipkart across all verticals and seller tiers (gold, silver, bronze)," it said.