Transcript
COMAPRISON OF ONLINE PORTALS
AMAZON
Whenever one thinks of an online marketplace to sell on, one of the first names that
pop up is Amazon. The world’s largest online retailer has become a hot favourite with
sellers since entering the Indian market in June 2013.
Here’s a breakdown of the services Amazon provides.
a) Pricing: The following is a summary of the pricing charged by Amazon for listing
and selling products.
Monthly Subscription Fee: Rs 499.
Closing Fee: Rs 10 charged on every sale that you make through them.
Referral Fee/Commission: Ranges between 5% and 15% per sale, depending on the
product category.
You can check out the detailed pricing for Amazon here.
b) Shipping: A seller has the option of either shipping the product to customers
himself, or using the Fulfillment by Amazon (FBA) to ship products.
In case the sellers signs up for FBA, he is required to stock the products at the
various Amazon Fulfillment Centers. Whenever an order is placed by the customer,
Amazon packages and ships the product to the customer. The seller is charged extra
for the following:
Storage Space: Rs 14.2 per cubic feet per month
Shipping: Rs 40 to Rs 45 per 500 grams
Packaging: Rs 10 to Rs 25 per unit
Delivery Service Fee: 1% of item value
You can read the detailed pricing card for the Fulfilment by Amazon program here.
c) Packaging: Packaging material is not provided by Amazon for sellers, unless they
sign up for FBA. In that case, packaging is undertaken by Amazon themselves.
d) Payout Period: Amazon disburses payments to sellers’ bank accounts once every
week. A seller is eligible to get paid for an order 7 days after it is confirmed as
shipped.
e) Marketplace Size: Amazon has close to 10,000 sellers on its marketplace in close
to 10 months of operation in India. The website receives almost 10 million unique
visitors every month. It offers more than 2 Crore products, in addition to 12 million
books and 2 million e-books.
E-BAY
Another name synonymous with selling online is eBay. The online retail giants were
founded in 1995 and took just 10 years to enter the Indian market, in 2005. One
major difference between eBay and other marketplaces is that you have two options
while pricing your products.
You can either list a fixed price for a product or choose an auction type price. You
can select a minimum bid amount and also an end date for the auction. The highest
bidder at the end of the auction gets to purchase the product.
a) Pricing: The pricing structure on eBay is a little more complicated and varies
depending on a lot of factors. Here is a brief of the different charges that a seller
incurs on eBay.
Subscription Fee: On eBay, you can choose to be a Non Shop Subscriber or a
Subscriber (3 different plans). You avail benefits depending upon which plan you are
subscribed to. Here are the rates for the different plans available on eBay.
Basic Store: Rs 499 per month
Featured Store: Rs 1999 per month
Premium Store: Rs 3999 per month
Insertion Fee: To list a product on your store, you are charged a listing fee.
The first 100 products are free of the listing fees for every seller. After that, the
rates charged are as follows.
The rates are shown for the different listing types. The first category is for the 1, 3, 5
or 7 days of listing. The second is for the 10 or 30 day listing option.
PaisaPay Fee: For every sale made through eBay, you will be charged 4.5% as the
PaisaPay fees. In addition, on this PaisaPay fee (only interest amount, not the total
sale value), 12.36% Service Tax is also applicable.
Final Value Fee: For every product that you sell, you will also be charged the Final
Value Fees. It is a percentage of the total sale value. This varies between 1% and
7%, depending on the type of product you are selling.
You can check out the detailed pricing structure for selling on eBay here.
b) Shipping: eBay sellers too have the option to either ship the products themselves,
or use eBay’s shipping solution ‘PowerShip’.
Unlike Amazon, eBay does not have any physical fulfillment center where a seller
can stock the products. Once the seller packs the products himself, representatives
from eBay’s logistics partners pick up the order from the seller. The package is then
delivered to the customer.
Here are the shipping charges for eBay’s PowerShip.
c) Packaging: Just like Amazon, packaging material is not provided to the seller by
eBay unless you sign up for PowerShip. Once you sign up for it, you are provided
eBay branded packaging material to pack your orders.
d) Payout Period: Once the customer pays for the product, eBay holds the payment
till the buyer confirms receipt of the order in good condition. Once the confirmation is
done, eBay transfers the amount to the seller’s account. So, there is no definite
payout period, but instead depends on the shipping time and customer confirmation.
The entire process usually takes 7-10 days from the date of order.
e) Marketplace Size: There are more than 40,000 sellers active on the marketplace
in India and has over 1.1 million live listings on its website at any given point of time.
There are more than 2 million active users on eBay in India from more than 4,000
cities across the country.
FLIPKART
Flipkart is the success story of the Indian eCommerce industry. The 7 year old
company is the largest eCommerce startup in India and has become a household
name in the country.
It caters to a large number of sellers and buyers and offers wonderful services, which
has seen its reputation skyrocket in the last few years. Here is how the marketplace
ranks up in the different parameters.
a) Pricing: Flipkart is another marketplace that follows the performance based pricing
structure. Here is a breakdown of the charges that you have to bear on Flipkart as a
seller.
Subscription Fee: Nil. There is no subscription fee involved in selling your
products on Flipkart.
Listing Fee: Nil. There is no fee required to list your products on Flipkart.
Commission: Flipkart also maintains confidentiality with regards to the exact
commission rates that they charge on every product. The charges vary
between 4% and 20% for every successful sale through them and many
sellers get personalized rates depending on the quantity of sales they
guarantee.
b) Shipping: For shipping, Flipkart uses its own logistics service eKart. It is
mandatory for the sellers to use their services when shipping orders to customers. It
is the seller’s responsibility to pack the order and keep it ready for the courier
representatives, who collect it from the seller.
Shipping Charges: Once again, the exact rates aren’t disclosed by Flipkart,
but the shipping rates are around Rs 35 per 0.5 Kg delivered through eKart.
c) Packaging: Flipkart usually does not provide packaging material to its sellers. But
in certain rare cases, if a large quantity of orders is guaranteed by a seller, Flipkart
does provide the material.
d) Payout Period: The payment cycle on Flipkart for sellers is different for the two
different tiers of sellers. All new sellers start off as Tier-2 sellers. Once the seller
completes one month on Flipkart with minimum 30 transactions, he is considered a
Tier-1 seller. However, for this to happen, a settlement defect rate of less than 5%
has to be maintained. If it shoots higher than 5%, the Tier-1 seller status is
downgraded again to Tier-2.
The payout times for the different tiers are:
Tier-1 Seller: The payment cycle for all tier-1 sellers is Dispatch Date + 5
business days.
Tier-2 Seller: The payment cycle for all tier-2 sellers is Dispatch Date + 10
business days.
e) Marketplace Size: Flipkart has a relatively low number of sellers when compared
to its competitors, with around 3,000 sellers active on the marketplace. This is due to
the company’s policy of onboarding sellers after a stringent quality check.
Still, it was the first Indian eCommerce company to touch $1 billion in sales, earlier
this year.
Marketplace
Pricing
Amazon
Subscription Fee
INR 499/ Month
Listing Fee
INR 10/ Sale
Payment Gateway
Fee
Commission
Self Shipping
Shipping Provided
Shipping
None
Packaging
Cost of Packaging
Panel and Customer Service
None
✔
✔
✘
✔
✔
✔
Powership
Use eKart
Use Fulfillment
500 gms + 1% of
Rs. 40 – 49/ 500
gms
✘
✘
Only for FBA;
Only for
Handled by
PowerShip
Amazon
customers
NA
NA
Confirmation
from customer +
7 Days
10,000 Sellers
Size of the Marketplace
Free
4%-20%
Shipment
Payout Period
products
4.5% Paisa Pay
Free
5%-15%
Item Value
Packaging Provided?
(For Basic Store)
Free for first 100
Flipkart
Fee + 12.36% ST
1%-7%
by Amazon (FBA)
Rs 40 to Rs 45/
Cost of Shipping
eBay
INR 499/ Month
INR 35/ 500 g
(approx.)
✔
NA
On Shipment
Tier-1 Selle
Confirmation
Dispatch Dat
from customer
7 business da
40,000 Sellers
10 Million Unique
2.5 Million Active
3,000 Sellers
Visitors / Month
Users
$1 Billion Sale
2 Crore Products
1.1 Million
2012-13
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Dangerous
Product Listings
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Block seller's
customer service.
account, even if
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buyer is fraud.
protection.
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solutions and
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