How much do individual Ecommerce sellers on marketplaces like Shopee and Lazada actually benefit from the Ecommerce boom?
March 9, 2021
Ecommerce boom = increased traffic, volume and online footfall => revenue increase for these individual sellers even if it’s only 1% of the pie or smaller. It’s the same way that a small retail outlet may benefit from a flagship store opening in their same mall, to put it into a familiar concept.
The main difference would be that while the flagship store in the shopping mall example drives audiences who are mainly interested in the flagship store, for Ecommerce most customers are seller-agnostic and are brought because of the marketing efforts of the platform; not the sellers, giving these smaller sellers an additional edge.However, marketplaces will always favor consumers over sellers.
This is evident in the platform policies. Below are a few struggles that sellers go through:
A) Third-party logistics
Platforms engage third-party logistics parties like J&T and Ninjavan to provide fulfillment to sellers. After sellers hand off their items to these third parties, they have no control over delivery issues like delayed or failed delivery, lost parcels, or damaged goods. However, in such cases the sellers will be left to face the brunt of the consumers’ complaints, and could face negative ratings due to no fault of their own.
B) Review resolution system
While there is a review resolution system in place, it is tedious to submit evidence and have it resolved. In most cases, sellers still need to absorb the cost of damaged products and returned items.
C) Copycats and copyright infringement
While platforms have invested heavily to detect copyright infringements, it is not uncommon to see duplicate listings by overseas sellers. In extreme cases, we have even seen entire stores being duplicated.
D) Platform accounting
Income statements are available to sellers, but they are not always intuitive, with platform fees, rebates and charges to account for. It takes hours on hand to reconcile these figures and it is difficult to figure out profit margin at times. Do sellers truly make money?