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Facebook, WhatsApp and Meesho- the trident of India’s reselling Industry

In this article, I will try to briefly explain the following-

  1. Why reselling is the fastest-growing form of e-commerce in India?
  2. The Modus Operandi of resellers
  3. The future

Why reselling?

The Bangalore based consulting firm RedSeer pegged India’s e-commerce industry dominated by Flipkart and Amazon at a staggering $100+ Bn. But there is a much larger unorganized retail industry which is pegged at around $700 Bn. This provides a massive room for expansion and opportunities for experimentation.

Source- https://marketinglessons.in/indian-retail-market-size-organised-unorganised/

We are seeing the emergence of a new form of e-commerce — ‘reselling’ and here’s why I feel it is here to stay.

Advantages for resellers-

Reselling provides a unique opportunity for millions of Indian women who always had an aspiration to do something of their own, but couldn’t pursue their entrepreneurial dreams due to lack of support, funding, location/time constraints or a myriad of other reasons. Reselling provides them with a zero-investment,work-from-home model to earn some money by leveraging their online and offline social network.

Advantages for buyers-

Internet users in India undergo a period of online maturity as they move down the internet usage evolution funnel.

Source- www.redseer.com

As you can see that social media is often the very first category of digital platforms/services that people use and buying products online comes at a very later stage and the number of users is also a small fraction of the total internet users. There are very reasons for this, but one of the most prominent is the lack of ‘trust’. This is where reselling does a phenomenal job by connecting social media with e-commerce, thus forming to what is known today as social commerce.

E-commerce+Social media= Social Commerce

Resellers leverage their social network to ‘influence’ their friends/relatives/ acquaintances or even complete strangers to buy these products through them by understanding their use cases and helping them find the right products. They act as a combination of a shopping assistant, endorser and sales rep of these products thus developing trust.

Modus Operandi(M.O.)

Here I am defining reseller as a person who purchases a product on behalf of someone else, this someone else can be yet another reseller or the end consumer and in this process earns a small commission per product sold. Reselling, like other businesses, has two main sides- supply and demand. A user can resell by using two combinations-

  1. Supply- FB+WA, Demand- FB+WA
  2. Supply- FB+WA+Meesho, Demand- FB+WA
Reselling- A bird’s eye View

A. Curating Supply

Here the supply side is basically the products posted by other people (other vendors/resellers/wholesalers) on platforms like FB pages/groups/marketplace, WhatsApp(WA) groups/broadcasting channels. Resellers also pick up products from Meesho(MH) where the product catalog is posted by registered manufacturers/vendors. A reseller is usually a part of these communication channels from where they pick-up products and then post them on their own self- created communication channels(FB & WA groups/pages).

Supply- Facebook Groups where vendors post their products & Meesho Homepage

B. Generating Demand and growing network

  1. The Intro Group

The resellers usually post their products on FB groups/pages and FB marketplace along with a Whatsapp group link. This group often called the Intro Group is like an offer to become a part of the reseller’s network to receive regular updates on product offerings. This WA Intro group is set to Admin Only mode, where the reseller tells the participants that if they want to see their product offerings more frequently then they should dm their details (location, name and contact info) so that they can be added in the broadcasting list or the main group. After receiving these details the reseller adds them in their broadcasting channels where they regularly post their products. If the buyer does not wants to be in the reseller’s group but just wants to buy that particular product he/she can directly dm the reseller on WA or messenger.

The Intro Group

2. The broadcasting channels and groups

The dozens of WA and FB groups/channels that these resellers create and grow over time is their main resource- their precious network of potential buyers. The resellers try to guard the contacts that belong to their network so that other resellers(their competitors) don’t steal them. Therefore they use the broadcasting feature of WA. These channels/groups are differentiated by the product categories like- home decor, plastic containers, kitchenware etc.

C. Posting the right way

Resellers usually copy the product description posted by the suppliers, add their margin(varies from category to category)and then paste this edited description on their own FB & WA groups/pages. As your network increases, so does the complexity, clutter and chaos. As resellers constantly copy-edit-paste these posts from three different sources(FB, WA & MH) they often forget the name of the source. Some resellers have devised smart hacks to remember the source of the product. They use a combination of emoticons at the end of their posts to signify who the supplier of this product was.

D. Closing a deal and thereafter

Order Groups

When a buyer -who is in one of these groups/broadcasting channels on FB/WA likes a product he is required to send his details like- size, colour, address to the reseller through DMs on messenger/WA. Resellers often create special ‘Order Groups’ on WA with their suppliers. On these groups no product posting takes place. Resellers provide the final details like courier/size/colour/name(details of the buyer)to the supplier. This part becomes much simpler if the supplier is from Meesho, where you just have to enter address and price details. In Meesho, cash is collected at delivery when the product reaches the buyer(the address entered) and the commission is automatically transferred to the reseller.

Transaction

The price that the end consumer pays will depend upon how many cycles of reselling that particular product has gone through. Also, the courier service is provided by the supplier and in some cases, there is extra shipping cost that the buyer pays. Payments are accepted through UPI/ Netbanking(non-Meesho case) and the buyer might be asked to provide the proof of payment. After deducting their commission the resellers send the remaining amount to the suppliers who then start the shipping process.

After-Sale

After 1–2 days the suppliers provide the resellers with a courier tracking number and the expected date of when the courier will reach. This info is further communicated to the buyers. This system sometimes might result in frauds as the suppliers after accepting the payment might block the resellers from their WA and there is nothing much the resellers can do, apart from posting about it on their FB groups.

Summary of the process

The Future

As you might have noticed there are several redundancies and problems in this process which need to be solved. Like, the over cluttering of WA groups, theft of contacts, fraud by suppliers, etc. Some of these problems do not exist if your supply is met through Meesho’s vendors. But resellers need better support and training in generating demand and growing network organically. With the introduction of FB shops, we can see a major push in this sector and changing dynamics.

References

  1. https://redseer.com/reports/ecommerce-industry-in-india/
  2. https://inc42.com/startups/meesho-revamps-indias-unorganised-retail-by-empowering-resellers/
  3. https://amasty.com/blog/need-know-facebook-marketplace-2016/
  4. All the WA/FB/MH screenshots belong to a relative of the author who is herself a reseller.

About the Author

Anmol Agarwal is a senior undergrad at IIT(BHU) Varanasi. He writes what he observes. He loves to talk about user behaviors, actions and motivations and how can they be simplified. He loves to take ownership and responsibility of projects that he is a part of. Contact him anytime for a candid chat on product, technology, history and politics.

Email- anmol.agarwal.che16@iitbhu.ac.in

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Anmol

Anmol

You can observe a lot just by watching-Yogi Berra