Sellers on marketplaces such as Amazon, Flipkart and Snapdeal say they’re being penalised because buyers are increasingly returning merchandise, adding to operational costs that they have to bear. About 1,000 sellers have formed the eSeller Suraksha Forum to convey their concerns and one vendor has even sent a letter to Amazon founder Jeff Bezos to draw his attention to the problem.
The sellers, none of whom wants to be identified, complain that the marketplaces are not sharing logistics costs or returning commissions in case a customer opens the package and then doesn’t want the item. “They put the entire blame on us, saying that we shipped fake or faulty products leading to return,” said a forum member.
The three biggest ecommerce companies Amazon, Flipkart and Snapdeal function as marketplaces that connect buyers with sellers. They can’t sell directly to customers as India’s overseas investment rules don’t allow this. The rising trend in returns cited by the sellers the ecommerce companies deny this is happening comes as marketplaces look to shore up finances after having focused on heavy discounts to win customers. This means online bargains are declining, which seems to be resulting in pain at the business end of the ecommerce retail chain.
“In case of a customer return (where the customer has opened the package) we have to (still) pay commission to the platforms. In case of courier return (where packaging is intact), we don’t have to pay commission,” said a seller who’s not a member of the forum. Apart from additional logistics costs, product damage is another bone of contention.
“Customers take advantage of the buyback period and if sellers investigate or ask for a reason (for the return), the customer care team forces the seller” to comply, said the seller in the letter he wrote to Bezos. “They threaten us if we don’t authorise the return request (that) they will file an A-Z claim and our account will be suspended.”
Amazon uses the A-Z claim to safeguard buyers not happy with a product. Once filed, Amazon will investigate the matter and try to resolve it within seven days.
Sellers say the return rate has increased by up to 50% in many categories including electronics, mobile phones, mobile accessories, apparel and jewellery since July 2015. This means losses for sellers that are mostly small and medium-sized vendors. Echoing the sellers’ concerns, Arvind Singhal, chairman of consultant Technopak Advisors, said the return rate on ecommerce platforms has gone up and could go up further.
“There could be multiple reasons for this. First, with high penetration of smartphones, there are non-serious buyers who order for the sake of fun, like window shopping on ecommerce sites,” he said. “This trend could be higher in certain parts of the country like UP. Some ecommerce companies have stopped delivering to several such regions. Secondly, (in) categories… such as apparel, footwear… touch and feel could be different from what it looks like on the website. Given lack of standardised sizes, even serious customers may not know their right sizes.” Amazon, Flipkart and Snapdeal, however, denied the accusations, insisting that they don’t see any such trend in returns.
“Unfortunately, it’s difficult to comment on your numbers as we don’t know what specific sellers you are talking to,” said Gopal Pillai, director, seller services, Amazon India. “But we don’t see it anywhere close to 50% it is significantly lower.
We have been growing significantly year-over-year with millions of new customers shopping on Amazon.in, yet the numbers of returns continue to be much lower than the industry average on our platform.” Pillai also said Amazon doesn’t charge sellers any commissions for returned products. “We have one of the best-inclass seller support and customer support teams, who treat both sellers and customers respectfully,” he said.
Flipkart also said its returns were lower than the average. “Our returns process is designed to create a win-win situation for both our customers as well as sellers,” a Flipkart spokesperson said. “Majority of our sellers have significantly lower return figures compared to the industry. We have an easy return policy for our sellers which ensures prompt returns as well as exchanges.”
Flipkart said it has invested in creating a returns dashboard that provides details of operations, status, payments and customer details for sellers. A dedicated team monitors and handles return requests.
Snapdeal said returns had declined. “The returns on the Snapdeal platform have steadily gone down over the last one year due to introduction of various technology upgrades and tighter monitoring of quality aspects,” a Snapdeal spokesperson said in an email. “The returns are today less than 10%, which is unarguably the lowest in the industry in India. There may be some outlier cases where a seller may have seen higher returns for reasons specific to such a seller.”
The site has a dedicated site for such information. “The recently launched seller interface Sherpalo provides a complete dashboard for all transactional information and hence reduces need for email/phone interaction,” the Snapdeal spokesperson said.
“Sherpalo also makes it easier for sellers to raise grievances. All sellers are also assigned advisors whose mandate is to enable sellers to conduct their business smoothly on Snapdeal.” Snapdeal said that sellers are not required to pay any marketing fee, commission or logistics charges on returns where the vendor is not at fault. Only in cases where the seller has shipped a defective product or an item that doesn’t match the specified order is a penalty levied.
Amazon’s Pillai said the company was seeking to get vendors well-versed with ecommerce.
“A lot of the issues are a result of unawareness among sellers of the systems and processes that are involved in managing an online business,” he said. “To address this, we launched a program called Seller University that educates sellers on these processes in a very detailed way though videos. There are 500+ videos in English, Hindi, Tamil, Telugu and Kannada which receive 7,500+ views a week. In addition, we also have programs like Service Provider Network and Amazon Trained Ecommerce Specialists who work with sellers and help them manage their business and grow on Amazon.in.”
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Source – ET Retail