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Online discounts are not just for consumers, Snapdeal slashes seller commission again

Athira Nair
12th Jul 2016
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In the midst of controversies surrounding online sellers and their tiff with e-commerce marketplaces regarding commission and return policies, Snapdeal has reduced its commission from its sellers. In an update on its policies for sellers, Snapdeal has said that the changes have been incorporated on the basis of feedback from sellers, and will be effective from Thursday, July 14.

Kunal Bahl, CEO, Snapdeal
Kunal Bahl, CEO, Snapdeal

Accordingly, Snapdeal’s marketing fees has been reduced in more than 120 sub-categories, including digital products, electronics, women’s fashion, FMCG products, sports and fitness goods, fashion jewellery, kitchen appliances, automotive accessories, etc.

Snapdeal claims that it will now have the lowest marketing fee. It added that the marketing fee for nearly 30 sub-categories has been increased marginally. While the reduction in fee ranges from 0.2 to 18 percent, the increase ranges from 0.5 to 5.5 percent. Snapdeal claims that simplified policies will enable the sellers to avoid penalties due to ignorance or complexity.

There have been changes in return policies too. Many sellers have complained about being charged for unsellable returns. [Amazon allegedly reimburse according to the fair market price, which is often less than half of the real price.] Snapdeal has now said that to share the cost of returns, Snapdeal will bear the cost for reverse pickup and payment collection, while packaging and shipping will be borne by sellers. In case of replacement/exchange also, reverse pick up costs will be borne by Snapdeal.

In a statement, Vishal Chadha, Senior Vice President, Market Development, Snapdeal, said: “We believe reduction in marketing fees will foster growth for our sellers. We have worked closely with our sellers and based on their feedback, we have made these policy changes to make them in-line with e-commerce industry best practices.” He added that they will continue to forego marketing fees to reduce the costs for sellers. [In May 2016, Snapdeal cut down the commission for sellers with specific ratings.]

Ugly fight

Snapdeal’s arch rival Flipkart has been in trouble with sellers over the last few weeks. They introduced the new commission structure on June 20. Since then, there have been reports of angry sellers pulling back their products from its platform. Flipkart, however, denied it and said that the number of active listings has increased.

Amazon, on the other hand, recently cut down their commission in high GMV categories such as computers, mobile phones, tablets, other electronics, etc. However, there is no change in fashion, lifestyle, and home categories, in which they had hiked the referral fee recently.

This surely is a tough time for e-commerce marketplaces in India. Snapdeal has been in the news for the last few weeks, since SoftBank’s COO Nikesh Arora left the Japanese investor firm, which was the primary investor in Snapdeal. Rumours were going around that Nikesh’s exit will affect Snapdeal’s chances of funding in future – which they have denied. Also, there were reports of impending mass layoffs in Snapdeal. However, last week it was reported that they are in talks to buy fashion seller Jabong. They also announced partnerships with Zomato, Cleartrip, UrbanClap, and Redbus to provide ticketing, food delivery and home services on its platform.

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