Break The Discount Model Or Break-Even? How To Make Buying And Selling Online In India An Effortless Endeavour.
Without an Amazon flood of cashflow, e-commerce sites in India are basically Robin Hoods, taking away from their investors and feeding the market with dreams of discounted smartphones. But on the 4k full HD LED TV in your living room, you might not notice that it makes nobody profitable.
There are now thousands of sellers in the e-tail space, reaching out to more customers across India and generating sweet revenue. But there are millions of other small businesses who could do the same- 51 million SMEs in India across all verticals, to be precise.
While sellers enjoy profits on an e-tail aggregation platform, the aggregator themselves suffer losses. The fact that all their finances are directed at attracting shoppers to buy online, convincing more sellers to join in, and bear the crippling costs of shipping returned goods is only half the story.
The other half sounds a lot like what Abhishek Bansal has to say:
Photo by Ishaan Gupta, for Digital Desh Drive When aggregators are marketing so hard, what’s stopping the SMEs from going online? If the threats of sellers backing out throws any light, it would be that handling customers can indeed be very tricky.
ATKearney came up with this comprehensive report that might need some deconstruction, but here are some key highlights:
1. Let the customer be gratified as soon as possible
So what if they can’t touch and feel the product, at least make sure they know exactly when their purchase will arrive. Same day deliveries are cool too.
2. Help the customer trust you with money
Cash on Delivery is easily a favourite payment method because it both gives the customer the power to reject the product at their doorstep and eliminates the 3–5 days’ time to process a refund. People like their money. Make people like you too.
3. Super-pack inventory
One of the biggest reasons why people shop online is because of the variety of products they’re able to access in a single place. There’s an algorithm that sorts it out and presents it to the user, instead of them having to wander from shop to shop looking for the right product at a price they like. Let every player make their goods available at the palm of every shopper.
4. Deactivate Discounts
There are currently 50 million online shoppers in India, and it is projected to grow to 175 million by 2020. That is still a tiny number considering that there will be about 317 million mobile internet users in India by 2017. There are ways to make online shopping preferable and desirable for customers without having to make SMEs fight for their share of visibility or reduce their margins.
5. The SMEs must go online anyway
Consider this: A shopper goes online to look for something (say, schoolbags). They run a Google search that lead them to a page with a list of schoolbag sellers. The seller with a bigger inventory and a lower price point is on top of the list and more visible to the customer, than the one who is a smaller player and owns one shop in the local market. The local players must not lose out in the end.
If every small business had their own website and could be discovered locally, they could compete with search results featuring their aggregator and be more available locally. Online selling is not for the big fish alone. Selling online must be an equal opportunity exercise, just like pitching a stall in the Sunday market (but with less exhaustion). NowFloats does that for the small fish.
Busting crazy discounts could provide a big breakthrough in convincing the smaller SMEs to go online. They’re losing out anyway, and realize the importance of being more accessible to the masses. If balancing the demand depends on how aggregators enhance the “Retail Therapy” experience, there must be a way for doing it without trimming away at margins. Let there be Profit.
Originally published at blog.nowfloats.com on October 17, 2016.
