Over a dozen small, fringe sellers have begun exiting or suspending their accounts on Amazon, unable to manage logistics and order deliveries on their own after norms for online marketplaces kicked in on February 1.
This move, however, is unlikely to affect the e-commerce giant’s revenue. Most of these entities sold products through Amazon-owned Cloudtail and Appario, companies that helped in fulfilling orders and have now stopped operations due to restrictions. In the absence of guidelines and directions from Amazon, the small sellers have started leaving.
“There has been no communication and direction to us from Amazon on the matter. It’s practically impossible to sustain logistics and deliveries on our own; the procedures are too tedious,” a New Delhi-based mid-sized apparel seller said.
“Amazon remains committed to enable a large number of sellers (400,000+ sellers) on its marketplace to offer the widest selection to our customers,” an Amazon India spokesperson said. “We have introduced several initiatives and services such as Easy Ship and Service Provider Network to ensure a robust marketplace for sellers of all sizes to sell and grow. We continue to work backwards from seller needs and offer services.”
The onus of delivery, warranty and customer service has always been on sellers since 2016, when norms known as Press Note 3 came into effect. The recently clarified foreign investment rules for e-commerce reiterated those norms. They also prohibited vendors with equity held by the marketplace or group companies from selling on the platform, affecting Cloudtail and Appario.
While both these entities still sell through Amazon Business, the B2B marketplace in India, they have not officially informed their suppliers about the future course of action. “Smaller resellers do not have knowledge and backend support to manage return and order processing. They were supported well by Cloudtail on these two aspects and also on the promotional front,” said Vivek Paliwal, CEO of 99 Years Network LLP, which helps small companies sell through e-commerce portals.
He added that most of them were able to focus on product development and production, while Appario and Cloudtail efficiently handled the e-commerce transactions. “No one is telling us to exit — we are exiting on our own since there is lack of clarity,” said a small seller of household products. Some entities voiced their displeasure on Facebook’s Amazon India Sellers page, a discussion forum for Indian sellers on the marketplace.
“Removal of Cloudtail and Appario will affect all of us in the coming days… Removal of these two giants will force Amazon to increase commission rates charged to sellers,” Manik Sadhwani, an electronics vendor, said on Facebook.
He added that Cloudtail and Appario gave small sellers access to buyers which helped increase their revenue. “With the new norms coming in, the number of intermediaries might increase, which can reduce discounts for consumers,” he said.
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