In the age of eCommerce, it is almost criminal for a business to not sell online. While there is an option to start an independent online store for your business, it is also a good idea to give online marketplaces a try as well. If an online store can be compared to an independent retail store, a marketplace is more like a virtual mall. Marketplaces provide an established platform for sellers to sell their products online, but give lower margins in profit as compared to selling from an independent online store.
But which marketplace is the perfect match for your business? To help you decide, we’ve put together a review of all the major marketplaces in India based on the following parameters: Pricing, Shipping, Packaging, Payout Period and Marketplace Size.
Here is a consolidated list of the comparison of the different online marketplaces, which is followed by the detailed analysis of each of them.
You can read a complete review of the major marketplaces here.
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 use 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 Fulfillment 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 2,500 sellers on its marketplace in close to 10 months of operation in India. The website receives almost 7 million unique visitors every month. It offers more than 450,000 products, in addition to 12 million books and 2 million e-books.
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, 7 or 10 days of listing. The second is a 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.
You can check read more about PowerShip here.
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 30,000 sellers active on the marketplace in India and has over 1.5 million live listings on its website at any given point of time. There are more than 2.1 million active users on eBay in India from more than 4,000 cities across the country.
A comparatively newer entry into the Indian eCommerce scenario, ShopClues has seen immense growth since its launch in 2012. The marketplace offers great deals for buyers and is popular among young shoppers online. The growth curve has risen steeply over the last 12 months and the company has also raised more than $15 million in funding till date.
a) Pricing: The pricing for ShopClues is very less complicated and is designed to attract merchants to sell on the marketplace. The pricing structure is performance based, which means that a seller only pays for a successful sale on ShopClues. Here is a breakdown of the charges a seller has to incur.
- Subscription Fee: Nil. There is no subscription or listing fee charged by ShopClues.
- Listing Fee: Nil. There is no fee for listing your products on ShopClues.
- Selling Service Fee: For every successful sale, a commission is charged by ShopClues. The charges vary between 4% and 20%, depending on the type of product that you sell.
You can check out the detailed pricing structure for ShopClues here.
b) Shipping: For shipping orders that you receive on ShopClues, a merchant has to use Fulfillment by ShopClues. A merchant is not allowed to use his own logistics arrangement to ship products through ShopClues.
A merchant starts off as a ShopClues Velocity Basic (SCVB) member. Once he starts selling on ShopClues and meets the required eligibility criteria, he is given the option to upgrade to the ShopClues Velocity Premium (SCVP) plan. The shipping charges and services offered vary depending on which plan you are part of. The shipping charges are as follows:
- ShopClues Velocity Basic: Shipping charges for every 500 grams is Rs 45.
- ShopClues Velocity Premium: Shipping charges for every 500 grams is Rs 72. The additional charges are because of better services provided in packaging and shipping your orders.
c) Packaging: ShopClues provides packaging material to sellers to pack their products. In the SCVB plan, a seller has to pack the product and the courier representative picks the packed product. In case of SCVP, the seller just has to hand over the loose product and the entire packaging and shipping procedure is taken care of by ShopClues.
Packaging charges: For every item packed by ShopClues, a charge of Rs 3 to Rs 9 is levied on the seller. For most items, this charge is Rs 9.
d) Payout Period: The merchants are paid out every week on Friday. The payouts are made for all products sold a week prior to that Friday which have achieved the ‘Complete’ status.
e) Marketplace Size: Over 12,000 registered merchants are registered on the marketplace. More than 2,00,000 productsare listed for sale on ShopClues to over 42 million visitors every year.
Tradus is the Ibibo group’s online marketplace venture in India which started in 2009. It has grown to be a big marketplace known for offering good discounts for customers and is growing steadily.
Here is a summary of what sellers can expect from selling on Tradus.
a) Pricing: Tradus’ pricing structure, like ShopClues, is based on performance only. You only pay when a product gets sold through them. Here is a brief of the prices a seller has to bear on Tradus.
- Subscription Fee: Nil. There is no subscription or listing fee charged by Tradus.
- Listing Fee: Nil. There is no fee for listing your products on Tradus.
- Success Fee: The success fee is the commission charged by Tradus on every successful sale that you make through them. The charges vary from 2.5% to 28% depending on the products that you sell.
You can check out the detailed pricing structure for Tradus here.
b) Shipping: To ship a product through Tradus, a seller is required to use Tradus’ logistics partners. The shipping costs vary depending on the package size and weight. The detailed shipping rates are revealed only once a seller completes the registration process on the marketplace.
c) Packaging: Packaging the orders is the seller’s responsibility. To get Tradus branded packaging material, you can purchase the same from them here. Various types of packaging material are available. A pack of 100 pieces of low density polyethylene bags cost Rs 230. You can also use your own packaging material for shipping your products.
d) Payout Period: The amount received from a successful order is credited to the seller within 7 days of successful delivery of the product to the customer.
e) Marketplace Size: Though it still ranks relatively lower than its counterparts when it comes to revenue, Tradus has still managed to woo a strong base of sellers on its platform. Though the exact number is something that they do not disclose, there are thousands of transactions every day on the marketplace. The website attracts close to 700,000 page views every day.
Snapdeal is a daily deals site turned online marketplace that started 4 years ago. Its huge rise in the last few years has seen it raise a tremendous amount of investment to fund its growth further. Here is a review of the services it provides to sellers for selling their products on their platform.
a) Pricing: Snapdeal is another marketplace that believes in a performance based pricing structure for its sellers. Here is what all you are charged for when selling at Snapdeal.
- Subscription Fee: Nil. There is no subscription or listing fee charged by Snapdeal.
- Listing Fee: Nil. There is no fee for listing your products on Snapdeal.
- Successful Sale Commission: Though Snapdeal does not allow anyone to share the exact commission rates, they usually charge between 4% and 20% for every successful sale through them. The rates are similar to those offered by ShopClues.
b) Shipping: For a Snapdeal seller, it is mandatory to use the services of their logistics partners. The seller has to keep the order packed and the courier partners pick them up from the seller and deliver it to the customer.
- Shipping Charges: The exact rates aren’t disclosed publicly, but they are approximately Rs 40 for every 0.5 Kg shipment. This cost is inclusive of all shipment charges.
Snapdeal also provides its sellers an innovative order fulfillment tool named SafeShip, which they can use to track and manage their orders with ease. Recently, they opened the SafeShip service for rival eCommerce companies to use as well. You can read more about SafeShip here.
c) Packaging: Packaging material is provided to the sellers by Snapdeal for an extra charge. The packaging material is charged at Rs 3 per order.
d) Payout Period: The seller is paid out for a successful order within 3 weeks of the dispatch date.
e) Marketplace Size: Snapdeal is one of the largest eCommerce players in India, with more than 20 million registered users. There are upwards of 4 million products up for sale from more than 20,000 sellers.
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 + 7 business days.
- Tier-2 Seller: The payment cycle for all tier-2 sellers is Dispatch Date + 12 business days.
e) Marketplace Size: Flipkart has a relatively low number of sellers when compared to its competitors, with around 1,000 sellers active on the marketplace. Still, it was the first Indian eCommerce company to touch $1 billion in sales, earlier this year. On an average, more than 20 products are sold on Flipkart every minute.
So that is what every major marketplace has to offer sellers in India. Do you also sell on any marketplace? Or do you plan to start selling there soon? Do leave us your experiences, queries and reviews in the comments below!
PS: This post was written by Varun KR for the Zepo Blog. Both of us are part of team Zepo. And we thought it’d be an excellent resource for the amazing entrepreneurs out here. If any of you have any further questions, please drop in a comment below or you can reach Varun at varun[at]zepo.in
First Published on: Apr 17, 2014