Starting June 20, prices of products are likely to go up considering the increase in commission that goes to the site for each purchase, according to a report in the Economic Times. With a cut down in return period, the company aims to address some of the concerns of sellers on its platform. In order to increase profit, Flipkart has chose to levy higher commission. Rival Amazon, too, recently increased seller commissions.
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The new return policy will apply on categories which gathers large number of the sales on their platform like electronics, books and mobile phones.
Sellers, however, explained that they are ready to bear the cost of shipping a product to the customer but suffer a lot during any product return; in many cases the consumers have no reason to return the products. The new policy is expected to take effect from July.
“The revised structure across shipping, commission and returns will enable sellers to have predictability and better manage their online business. Flipkart is closely working with all the sellers to ensure a smooth transition”, said Flipkart in response to a query.
Flipkart has also done away with its Zero+ commission policy. Under this policy, the company had stopped charging sellers, instead asked them to advertise on its platform for a fee. Also, if we look at our market position we have better commission and fee structure than any other competitors in the market. The sellers will be allowed to pass on shipping cost to customers.
A seller said “Some buyers make unreasonable returns when they change their mind post-delivery”.. An estimated 9 per cent price increase has been pegged by the sellers. “This makes reconciliation hard as it is not easy to keep track of so many transactions”, a seller on Flipkart told ET.
So far, Flipkart was not charging any payment collection fee from sellers, and the new rate is believed to be slightly higher than industry peers like Amazon India and Snapdeal, who usually charge 2-2.3%.
AIOVA is a group of 1,000 sellers across all online marketplaces.
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The Binny Bansal-led company is also dropping the Zero+ Commission Policy. “This makes reconciliation hard as it is not easy to keep track of so many transactions”.
