According to the FDI policy guidelines, “Marketplace model of e-commerce means providing of the i . t platform by an e-commerce entity on a digital and electronic network some thing as a facilitator between buyer and seller.”
The key feature of the Marketplace model is that the e-commerce firm, like Amazon, Flipkart, Snapdeal, etc. provide a platform for purchasers to have interaction having a large number of sellers onboard to acquire a product or service online. Thus, when a product from amazon is bought, you’re actually purchasing it coming from a registered seller by using it. As such the merchandise is just not directly sold by amazon. Here, amazon is simply a website platform which facilitates a celebration location for a consumer to meets a lot of seller and gives various options and value levels to get a products or services.
Whereas the Inventory-led websites have specialized but limited selection and the serious customers may sign in to those website to get a specific selection, such as caratlane.com for precious jewellery, booknest.in to buy books, swiggy.com for ordering food, 1mg.com for medicines etc.
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Anchor Seller plus a Level Playing field
Most of the marketplace players have anchor sellers on panel, who will be either their subsidiary entities or perhaps a large enterprise who have created privileged relates to them which helps them offer bargains or discounts towards the customers. This might add a higher discount on products, Free freight, compensation for sales returns etc. The losses incurred on these deals /services are compensated by the Marketplace Player with a pre-agreed arrangement.
It’s easy to see that some products are entirely on the website at 40% -60% discounts which can be even challenging for the producer to supply. It’s easy to see that you’ll find 40-50 sellers to get a medical books but excepting one anchor seller, fat loss to supply such exciting discounts or offers. They even mask other seller completely and corner almost entire interest in these items, thereby also frustrate these multiple genuine sellers to reach the shoppers using honest pricing offers.
Virtually all e-commerce players take presctiption the verge of re-discovering their business models and desire to become profitable sooner. Truth be told, none are already capable of seeing a penny in profit up to now. Many big and promising e-commerce and unicorn players have perished as a result of unsustainable losses and a lot of are already sold-out to other people. Year 2017 would see more to fasten belts and continue to keep solve this riddle lest they perish inside the race towards the survival with the fittest.
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