According to the FDI policy guidelines, “Marketplace label of e-commerce means providing of the it platform by an e-commerce entity on the digital and electronic network to behave as being a facilitator between buyer and seller.”
The primary feature of the Marketplace model would be that the e-commerce firm, like Amazon, Flipkart, Snapdeal, etc. give you a platform for purchasers to get which has a many sellers onboard to get a product or service online. Thus, every time a product from amazon is bought, you’re actually acquiring it from a registered seller by it. As a result the item isn’t directly sold by amazon. Here, amazon is just a website platform which facilitates a meeting place for someone to meets numerous seller and gives various options and value levels to get a products or services.
Whereas the Inventory-led websites have specialized but limited product range and the serious customers may log in to those website to get a specific product range, for example caratlane.com for precious jewellery, booknest.straight into buy books, swiggy.com for ordering food, 1mg.com for medicines etc.
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Anchor Seller plus a Level Arena
A lot of the marketplace players have anchor sellers on panel, who’re either their subsidiary entities or possibly a large enterprise that have applied for privileged works with them which will help them offer bargains or discounts towards the customers. This might incorporate a higher discount on products, Free delivery, compensation for sales returns etc. The losses incurred on these deals /services are compensated with the Marketplace Player within a pre-agreed arrangement.
You regularly see that some goods are positioned on the website at 40% -60% discounts which can be even a hardship on the producer to make available. You regularly see that you can find 40-50 sellers to get a ONline book store bangalore but excepting one anchor seller, fat loss to make available such exciting discounts or offers. They can mask other seller completely and corner almost entire need for the products, thereby also frustrate these multiple genuine sellers to achieve the shoppers with their honest pricing offers.
Virtually all e-commerce players are on the verge of re-discovering their business models and aspire to become profitable sooner. The reality is, none have already been capable of seeing a penny in profit thus far. Many big and promising e-commerce and unicorn players have perished due to unsustainable losses and many have already been sold-out to others. Year 2017 would see a lot more to lock belts and continue to keep solve this riddle lest they perish in the race towards the survival from the fittest.
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