In line with the FDI policy guidelines, “Marketplace model of e-commerce means providing of the it platform by an e-commerce entity on the digital and electronic network to act being a facilitator between seller and buyer.”
The main feature of this marketplace model would be that the e-commerce firm, like Amazon, Flipkart, Snapdeal, etc. give a platform for patrons to get with a large number of sellers onboard to get a product or service online. Thus, whenever a product from amazon is bought, you are actually purchasing it from a registered seller with it. As such the item is not directly sold by amazon. Here, amazon is only a website platform which facilitates a meeting spot for a person to meets many seller and provide various options and value levels for a service or product.
Whereas the Inventory-led websites have specialized but limited selection as well as the serious customers may signing in to those website for 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 and a Level Stage
The majority of the marketplace players have anchor sellers on panel, that are either their subsidiary entities or perhaps a large enterprise who’ve entered into privileged deals with them which will help them offer money saving deals or discounts to the customers. This will likely add a higher discount on products, Free delivery, compensation for sales returns etc. The losses incurred on these deals /services are compensated with the Marketplace Player within pre-agreed arrangement.
It’s easy to see that some products are positioned on your website at 40% -60% discounts that is even hard for the manufacturer to offer. It’s easy to see that you’ll find 40-50 sellers for a buy engineering books but excepting one anchor seller, no one is able to offer such exciting discounts or offers. They can mask other seller completely and corner almost entire requirement for these items, thereby also frustrate these multiple genuine sellers to reach the customers can use using their honest pricing offers.
Almost all e-commerce players are saved to the verge of re-discovering their business models and desire to become profitable sooner. The fact is, none have already been capable of seeing a penny in profit thus far. Many big and promising e-commerce and unicorn players have perished due to unsustainable losses and several have already been sold-out to other people. Year 2017 would see more to fasten belts and keep solve this riddle lest they perish within the race to the survival of the fittest.
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