A number of online sellers are shifting out of big ecommerce sites and setting up their own online platforms to not only gain better visibility but also to save on commission and logistics charges.
Varanasi-based ScarpShala, which sells home décor and lifestyle products made out of urban waste, is a case in point. Started as a social venture by two friends Kriti Singh and Sikha Shah to upcycle urban waste, mostly metals and bottles, their products were popular on big e-commerce platforms such as Flipkart, Amazon and CraftsVilla. However, they soon realised that they could capitalise more if they started on their own platform.
After ScrapShala, with the help of KartRocket.com, a do-it-yourself e-commerce platform for small and medium businesses and retailers, set up its own online platform, the number of orders has gone up 50 times.
“Small retailers like us get lost in the large marketplaces. We don’t get good visibility. Apart from the high commissions, these sites also charge for logistics and product handling. If you sum all that, we hardly make any money,” said 28-year-old Singh.
Getting more orders
Similarly, Mumbai-based Paaduks, which creates footwear out of used tyres, also has set up its own store. Jidnyasa Muthale, who heads sales and operation at the 2-year-old business, told BusinessLinethat marketplaces such as Flipkart and Amazon may not be great for niche products.
“The big e-commerce players are price sensitive and hence force us to give discounts,” Jidnyasa said. There are hundreds of such sellers from across the country who are setting up their own stores. To get visibility they list themselves on sites like Kraftly and Shopo.in, which help small businesses create their own online store. The commissions charged in this model are as low as 0-5 per cent compared with 25-30 per cent by the big e-commerce platforms.
While e-commerce majors earlier charged 10 per cent as commission from sellers, they have now increased the fee. “Earlier most of the players were focused on onboarding the maximum number of sellers, however, the focus is more towards bigger sellers who can generate volumes,” said an industry watcher.