Online retailer Flipkart has reportedly added 3,000 merchants to its online portal despite announcing a new policy that makes them bear extra costs.
The company would be redressing these extra costs with other measures that will be in favor for these merchants, according to ET.
Under the new policy change, merchants will have to pay increased sales commission, added shipping charges along with handling charges on a few categories of products returned by customers.
Flipkart will compensate for this by offering a 50 percent discount on sales commission for merchants who use its warehousing services.
This would aid sellers source cheaper products from China and within the country. The company would also provide help with payments and logistics, along with licensing its indigenous brands to a select few vendors.
Flipkart will also be offering training, webinars, and visits by key account managers to help sellers adjust to the changes made in the new policy.
Several merchants had raised their concerns over Flipkart’s new policy change. Some even reacted by threatening to stop selling on the platform and remain inactive.
“The changes on return shipping policy will impact sellers heavily. Flipkart used to charge a fee from sellers only if we were at fault, which would be less than 1% of the order (value).
Now, Flipkart will deduct shipping charges and collection fees from sellers (in case of returns), which will be huge since return percentage ranges from 8% to 10% (deliveries) in most of the categories,” Sanjay Thakur, spokesman for ESellerSuraksha, a group of about 1,000 online sellers, told ET.
Though Flipkart said its new policies have become much simpler who is now solely gunning for increased profit margins.
“From a seller perspective, the cost of doing business is going up. But we are working with (sellers) to improve their portfolio.
There are a few sellers who are going to be impacted a lot and are unhappy. We are communicating with them,” Anil Goteti, head of marketplace at Flipkart told ET.
Flipkart has been aggressively acquiring merchants with new initiatives. Back in March 2015, the e-commerce website had 30,000 sellers and reached 90,000 in May this year.