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Why Do Sellers think Payment Reconciliation mixed with Returns & GST is a bad combination?
The menace of products returns is something that every online seller is familiar with. The confusing returns & refund policies have been breaking sellers’ back ever since online shopping picked up. High returns also led to payment reconciliation issues and complicated reports made it even more difficult for sellers to keep track of their payments.
In July entered GST, which has its own set of problems.
Product returns, reconciliation and GST are three of the main pain points that on their own are hard to deal with. But sellers say that things take a turn for the worse when the three issues get intertwined.
With GST, it’s hard to handle the load of returns, says seller
“Return was not a lesser pain and to that GST got added to it. It is getting difficult to align the online business with loads of returns coming in. And then accounting and keeping track of credit notes and on top of that returns has to be filed every month,” says online seller Abdul Kadir Natali while speaking to Indian Online Seller (IOS).
He adds, “Still many are unsure about what to do and not to do while filing GSTR1, 2, and 3. And again this returns and reconciliations are making sellers’ lives very busy, distracted and miserable. Marketplaces with their ANTI SELLER policies are making sellers’ margin thinner and thinner.”
IOS asked Abdul if marketplaces share enough data and details for payment reconciliation. And do they provide assistance in the post-GST period so that sellers understand the exact money due to them.
Abdul states, “Marketplaces are nowhere interested in assisting seller for FREE. For that, they provide 3rd party service, which they promote as SPN (Service Partner Network). Marketplaces only know how to milk undue money from sellers and reconciliation is a headache because reconciling your own money is made difficult by these bully marketplaces.”
Impossible to match payments with the marketplaces says seller –
Seller Mayank Goyal also reiterated what Abdul says above. Goyal shared that in an online business, reconciliation is the toughest job for any seller. There are many tools, software and some SPNs that provide reconciliation services. But they all charge money from the sellers.
“Online business has much more competition and lesser margins. And if seller will give money to SPNs, the margin per product will reduce even further. The best practice for reconciliation is excel sheet on any given day and time. Marketplaces accept the return request in seconds. And seller has to keep track of the returned items and whether he has received or not, which is very tough to handle. But excel sheet can reduce that headache but the seller has to do manual work,” advises Mayank.
Mayank says that with GST, returns have become even more complicated as marketplaces don’t share enough data.
“It’s next to impossible to match the data with the marketplaces. Some marketplaces have charged double the taxes for sales and for returns. And seller has to go with the marketplaces data so that no difference comes while filing. But here sellers loses money in the name of tax,” avers Mayank.
No requirement to select GSTIN of the e-commerce operator says Amazon
IOS realizes that sellers are finding it difficult to reconcile their payments, especially after GST was implemented. There’s a confusion related to filing GSTR1. Sellers want to know if they need to submit state specific GSTIN of e-commerce operator according to the state in which the sale is being made. Few sellers said that the GST portal is not accepting the main GSTIN of marketplaces’ head office if the sale is made in any other state.
Therefore, we asked Amazon if they could clear the above-mentioned doubts so that IOS could communicate the same to the seller community.
Amazon India spokesperson affirms, “The requirement for sellers to disclose the supplies made through e-commerce operator in GSTR1 returns arises only if the e-commerce operator is liable to collect TCS. As TCS has been deferred, there is no requirement to select GSTIN of the e-commerce operator in the GSTR1 by the sellers. Once TCS reporting requirement is notified by the government, we will share Amazon’s e-commerce operator GSTIN ID with the sellers.”
In other words, Amazon sellers can continue to follow the procedure that they were following before GST was implemented. Once the TCS liability comes into the picture, the etailer would inform sellers about what to do next and how.
IOS also communicated to Amazon that quite a few sellers are feeling lost due to lack of personal support and assistance as far as GST is concerned.
Amazon’s representative says, “To provide any GST related assistance to sellers, our ‘A-Z GST Guide’ programme covers all details in the form of tutorials, blogs, free online training sessions and paid professional support from third-party service providers.”
We need special GST related seller support service, say sellers
Seller Abdul points out that instead of providing assistance in the form of FAQs and webinars, a special seller support section only for GST is the need of the hour. He says that some sellers are not able to sell due to lack of knowledge about GST, its benefits and the pros of registering their business.
Mayank wants marketplaces to share simplified data.
“Marketplaces should provide enough and simplified data to seller so that he/she can easily file their returns. But why would marketplaces do that? They just don’t want sellers to reconcile their accounts. They are not providing the monthly invoices till now. So it’s going to be tough for sellers to reconcile the data of returns,” shared Mayank.
Facing reconciliation issues due to heavy returns on Flipkart, says seller
IOS had emailed Flipkart the same set of questions as Amazon. Flipkart sellers too are confused about filing GSTR1 and need assistance. But the Bansals-led company didn’t reply to our email.
This brings us to a telephonic conversation with seller Himanshu Agarwal, who says that reconciling payments on Flipkart is a tough task. More so, in the case of product returns. And the marketplace’s indifferent attitude doesn’t help either. On the other hand, he is impressed by Amazon’s seller support service in this regard.
Himanshu says that if he ships his orders on Sunday, then a week later by Monday Amazon releases his payments after subtracting all deductions, fees and returns. But on Flipkart, the returns drag on for months.
“The sale volume is good on Flipkart. But the problem is their seller support service, which is poor compared to Amazon and Paytm. Nobody listens and no one replies to emails except for automated robotic replies. There’s no decision maker; matter keeps getting escalated with no resolution. While Flipkart’s support executives are always in a hurry to close the call, Amazon representatives don’t end the call until they find the source of the problem and the solution,” asserts Himanshu.
Amazon India’s seller support isn’t flawless either. But Himanshu believes that Amazon at least tries to help buyers and sellers, as opposed to Flipkart that sides with buyers most of the times. Clearly, the seller support experience varies from seller to seller because it is often Amazon that gets accused of siding with customers.
The seller thinks that COD orders contribute to the high rate of returns on Flipkart. Himanshu shares, that irrespective of the value of the item, the home-grown etailer allow customers to place COD orders (seller has no say in it). And many customers take advantage of it by placing orders under fake name and address. He doesn’t think that GST has any role to play in this heavy returns-reconciliation saga. The blame only lies with the etailer, according to him.
As of now, Himanshu has made his listings offline on Flipkart. He’ll activate it if and when Flipkart accepts his ‘Self Ship’ request, which the etailer has rejected in the past.
Sellers, are you too facing payment reconciliation issues due to returns and GST? If so, then have you found any solution? Could you answer the questions that Flipkart chose not to answer? Please do share with our seller community by commenting below.
If so, then have you found any solution? Could you answer the questions that Flipkart chose not to answer? Please do share by commenting below.
Flipkart, Amazon get ready for Festive Face-Off
Profit Margins reduced to Accommodate Discounts
A festive season without discounts won’t have many takers. And Indian e-commerce companies understand that. But with FDI restrictions on offering huge discounts and big brands’ reluctance to deplete the value of their brand, etailers had to find a new way to entice consumers. With peak shopping season just around the corner, online marketplaces have found what they were looking for.
Biggies like Flipkart and Amazon have approached brands directly and requested them to reduce their profit margins. In return, marketplaces, too have agreed to reduce their commission by 50% so that there’s enough room for discounts.
Big electronic brands such as Samsung, LG and Sony are not going to encourage online discounts on their products. Therefore, etailers are relying on online-focused electronic brands like Sanyo, Onida, BPL, and TCL.
An executive from one television brand that etailers have approached said, “Since the marketplaces cannot burn money on mainstream brands now due to a direct business relationship, they are placing their bet solely on the online exclusive or focused brands this festive season to drive their category volumes. Even during the just concluded Independence Day sales, the focus has been on these brands.”
It is a win-win situation for online marketplaces and online-focused electronic brands. During the festive season, besides fashion products, large appliances and smartphones sell really well. And the bigger the discount, the more it sells, especially in tier 2 & 3 cities.
Brands like Panasonic, BPL, TCL and Onida are working with the online marketplaces to come up with hard-to-ignore offers during the festive season instead of burning money on advertising and promotions.
Amazon India has deep pockets, thanks to Jeff Bezos. The American etailer recently injected$63 million into its logistics arm as part of its festive prep. Its food business too would be ready to roll by Diwali.
But this time around Flipkart is also flush with funds thanks to the $2.5 billion investment by Softbank. The home-grown etailer has laid out clear plans to utilize this money to fight against Amazon.
While speaking about the 2017 festive season, Flipkart’s senior director Smrithi Ravichandran stated, “With every festive season, Flipkart has expanded the e-commerce horizon in India, bringing to existing and new customers the widest product range at best prices. This year is going to be even more delightful for customers, because along with existing affordability programmes, we’re making new additions like extended warranties and buyback guarantee.”
While Amazon is counting on its subscription service Prime, Flipkart is looking to capture buyers’ attention by offering new schemes. The Bansals-led company also revamped its large appliances category ahead of the festive season. Push for private labels too have increased.
With each passing day, the festive war between Flipkart and Amazon would intensify even further.
Do buyers prefer Amazon more than Flipkart?
Amazon has been in second place for the most part of its e-commerce journey in India. The US-based etailer, however, has been working on various strategies to pick up sales and push it ahead of rival Flipkart. IOS reported recently that the etailer sees itself as the true market leader with a gross sales increase of 88% in Q1 of FY18.
But, has it really managed to jump into the first place where customer preference is concerned?
What Amazon India has that its rivals lack are its Prime program and strong logistics play. These have managed to capture customers and encourage repeated sales. According to a survey by Forrester Research, a research firm, Amazon continued to be online shoppers’ preferred destination. This has widened the gap between Flipkart and Amazon.
Between the period from February to March 2017 a total of 2,000 Indian consumers participated in the survey conducted by Forrester Research. The results from the survey showed that out of the 2,000 shoppers recorded –
Based on the stats collected from the respondents, the customer preference for Amazon India was higher than that for Flipkart, for the first time last year. From the details the 2,000 metropolitan respondents provided, it was found that in 2017 –
Amazon’s share of new customers in non-metro locations jumped to 75% during this year. In 2016, the year-on-year new customer share increased by 60%, the company said.
In 2017, online retail spending scaled up again after the dip caused by limited discounts and sudden demonetization. The year’s online spends per buyer grew to Rs. 26,671 from the amount in 2016, which was Rs. 24,092.
Senior forecast analyst at Forrester, Satish Meena mentioned, “Shipping cost, shipping time, product review-ratings, low price guarantee and retailers return policy are the key factors for customers while picking an online retailer. Over a period of time, Amazon rated high in almost all the factors allowing customers to order more products and also increasing the num ber of categories they purchase.”
“Online customers are looking beyond just discounts and are now also considering good experience and fast delivery. Product ratings have also become important,” said an anonymous ecommerce logistics player.
Meena also claimed that more buyers are engaging with Amazon as a result of superior customer service. The US-based e-commerce company has received 25% year-on-year sales growth due to a wide variety of consumables and fast fashion categories.
Festive season e-commerce sales are back; but this time, the merchants selling on these platforms are more at ease. The sellers YourStory spoke to said the online portals have not forced any major discounts on them this time, but they expect a large set of new customers and higher visibility.
Flipkart is launching its Big Billion Day sale on Tuesday and it will run till 17th. Amazon is running its Great Indian Festive sale during the same period while Snapdeal will have a special deal every Monday alongside offers through the month until Diwali. At the time of writing, Snapdeal claimed to be on track to reach $100 million in sales in a single day from its Monday Electronics sale on October 12th.
Kuberbox, an online seller for diamond jewellery, participated in Flipkart’s Big Billion Day sale last year, and saw the same momentum in sales for the next two months. “Once your product sells well on a marketplace platform, you are shown higher on their website. Even if you are selling on low margins, it helps you to get more visibility for your brand and your customer base will increase substantially,” says Sourav Lodha, Founder of Kuberbox.
To know more, visit E-commerce merchants expect festive-sales windfall
Gurpreet Singh, cofounder & CEO of Browntape, an ecommerce software company that helps online sellers manage orders and inventory, chose Goa to start up because he was already working there and had a feel of the place. “Goa is well-connected to all metros, has a nice mix of urban and rural and a good place for people to build their lives,” he says. While there are challenges in hiring people, retaining talent is much easier in Goa.
“In the past six months, I have interviewed at least six senior people from metros who have been advised by doctors to move out of these cities due to pollution-related illnesses in the immediate family,” says Singh. Prototyze, an incubator located in a picturesque bungalow in Dona Paula on the outskirts of Panaji, has 150 employees, three venture teams and a mini zoo.
“Travel is a breeze, pollution is relatively less and the beach is a walk away,” says Mohan Krishnan, chief planning officer at Prototyze, who has lived in Goa for 14 years. In the last 18 months, Prototyze has incubated Mobiefit, a fitness brand; HandyTrain, a mobile training platform for companies to create and deploy training programmes; Seynse, a fintech venture; TempoGO, a digital transportation company; and Mondeart, a platform for home owners and interior designers.
To know more, visit Work life imbalance, the only danger of starting up in Goa
When Browntape got to know that one of the online marketplaces was looking for sellers who retail colourful laptop bags priced between Rs 699 and Rs 999, it immediately passed on the information to its clients.
Firms like Browntape and Sellerworx help small businesses manage their online operations across marketplaces and become active on ecommerce platforms, by providing technical backing, key market information other support. These services also help the marketplaces sign up more active sellers, as most of their current seller base is inactive, with small and medium sellers struggling to stay competitive in a market where challenges range from low margins to complex payment and reconciliation processes.
Sellerworx works with 800 sellers on Flipkart, Paytm, Snapdeal, Shopclues, eBay and Amazon and, according to the company, as much as 60% of these sellers are active on the ecommerce platforms. “There has been a large push to onboard a critical mass of SMEs in the last six months,” said Venkat Potluri
E-commerce is like a family – to make it work, everyone in the ecosystem has to work on their relationships, make compromises, have proper communication, and most importantly, know that the effort is worth it. The buzzword in Indian economy functions only with the cooperation of multiple segments – offline retailers, online retailers, logistics partners, delivery boys, and most importantly customers.
In the last few years, since the country witnessed the birth and growth of e-commerce, all the top players – homegrown rivals Flipkart and Snapdeal, their American competitor Amazon, younger unicorn ShopClues – have been racing to get the maximum number of sellers on their respective platforms: for the simple reason that it provides more selection and possibly more discounts to the customers.
In the last six to seven months, however, e-commerce majors and their sellers have had quite a frictional relationship. Reportedly struggling with funding crunch, Flipkart increased their commission, whereas Amazon – perfectly timing its counter move – decreased theirs. Flipkart’s recent hike in commission has irked their sellers so much that many threatened to quit the platform.
To know more, visit The game is on – e-sellers versus Flipkart-Amazon-Snapdeal
Hyderabad-based logistics firm Gati Ltd has invested $3 million (around Rs 22 crore) in Goa-based cloud software startup Browntape Technologies Pvt. Ltd, it informed stock exchanges.
Browntape, founded by Gurpreet Singh and Piyush Goel in 2012, was a part of GSF accelerator’s second batch. It makes cloud-based software, which online merchants can use to manage their orders and inventory for ecommerce marketplaces—such as Amazon, Flipkart, eBay and Shopclues, among others—where they are listed.
These sellers can track the status of their orders and print invoices through the software. For a seller, when an item sells on an ecommerce platform, the stock quantity gets updated.
“Gati will use the Browntape platform to offer a single-window solution to customers by integrating our established pan-India logistics network and Browntape’s multi-channel order management platform,” Dhruv Agarwal, chief strategy officer of Gati, said in a statement.
“Online sellers will be able to manage their ecommerce ecosystem seamlessly in terms of order flow, physical product flow and information flow,” Agarwal said.
To know more, visit Logistics-tech startup Browntape raises capital from Gati
Gati Limited has posted a consolidated net profit of Rs. 8.4 crore for the second quarter ended September 30, 2106 as against a profit of Rs. 8.3 crore for the corresponding quarter last year.
The express distribution and supply chain solutions company posted a consolidated revenue of Rs. 425.64 crore for the second quarter, as against Rs. 404.94 core, for the same period last year.
The company announced it has invested in BrownTape Technologies, a cloud-based software solutions company which helps online merchants manage their order for multiple e-commerce marketplaces.
“The relationship with BrownTape will form an important part of the company’s long-term growth strategy. The alliance will work on the vision of simplifying e-commerce for all levels of online sellers,” Dhruv Agarwal, Chief Strategy Officer of Gati, said.
To know more, visit Gati invests in e-com facilitator BrownTape Tech, nets Rs. 8.4 cr in Q2
On a few major marketplaces in India that are live today including eBay, Amazon, Snapdeal, Flipkart, Tradus and Shopclues over 50,000 merchants sell their products. With a lot of them them having started with a single platform, are now selling on 4 or 5 sites simultaneously. Many of them have their own branded sites as well but work with other affiliate networks too.
Now talking from a merchant’s perspective – they live in overburden of excel-sheets who log into the sites where they have showcased their inventory, every morning, in different tabs, and copy paste orders into a central database of excel-sheets. Some other manually type the order details into Tally. Trying to solve this problem of Indian marketplace merchants – Browntape, a Goa based startup has come up with an automated process to eliminate the need of heavy and slow excel sheets.
The platform integrates with all the marketplaces and bring the orders for a merchant to one single console – on top of generating all the the shipping labels in one click. Moreover, the merchants get a common sales analytics for all their channels and thus helps them in getting a centralized inventory system.
To know more, visit Handling multi-channel selling on various ecommerce marketplaces ? Try Browntape
Goa-based Browntape, a cloud-based software which helps online merchants manage their orders and inventory for multiple e-commerce marketplaces, has raised an undisclosed amount of investment (around $ 1 million) from Seedfund and serial entrepreneur Krishnan Ganesh.
Following the investment, Seedfund partner Paula Mariwala has joined the company’s board. “We will use the fund for sprucing up technology, expanding its sales and marketing team in various cities, and hiring.
Sellers can track the status of their orders and bulk print shipping labels, invoices through Browntape. These entire functions manifest on one screen through a multi-channel order fulfilment software. For a Browntape user, when an item sells on one online store, the stock quantity gets updated on all his other online stores automatically. The data is also updated at the seller’s inventory records.
GSF Accelerator has announced the graduation of twelve startups from its 2013 Summer Accelerator Program. The startups underwent a 10-weeks program that ran simultaneously in the cities of Delhi, Mumbai, Bangalore and Chennai.
The twelve startups are ClinchPad, PosterGully.com, TripTern, BrownTape, TimeSaverz, AirStream, TradeStreet, Swym, RidingO, DhilCare, Tinysurprise, and Flinto.
The startups will now will get a chance to pitch to angel investors and venture capitalists from India and rest of the world in a two-day conference, GSF #WhereDoWeGONow on August 21 and 22, 2013 in Bangalore.
GSF Accelerator is India’s largest tech accelerator, founded by Rajesh Sawhney, and backed by 20 Indian founders and 5 funds from across the world. GSF aims to provide promising startups in the mobile, social, local and cloud spaces with access to venture & business networks, personalised & intensive mentoring, and initial capital.
To know more, visit GSF Accelerator graduates twelve startups as part of its 2013 Summer program
GSF, an incubator endeavoring to become a “TechStars” for India and the developing world, just graduated its second batch of startups covering everything from trip planning in South Asia to CRM to cheaper electo-cardiograms.
The accelerator, which just started off a year ago, is the brainchild of longtime Reliance Entertainment executive Rajesh Sawhney. He’s been seeking a way to jumpstart a startup culture in India, even as multi-national foreign and domestic companies continue to recruit the best technical talent out of the country’s universities.
India has had a few notable growth-stage startups like advertising network InMobi and Flipkart, but Sawhney wants foster a broader pool of startups across the entire country.
Instead of concentrating the accelerator in a single city, GSF simultaneously runs a 10-week program in New Delhi, Bangalore, Mumbai and Chennai. Sawhney says this is because India has so many major cities with technical talent, each with their own strengths. Mumbai is at the heart of India’s entertainment industry while Bangalore is the tech hub that attracts foreign companies.
Serial entrepreneur K Ganesh has also invested in the Goa based company. The company, founded in 2012, was one of the companies from the 2013 batch of GSF Accelerator.
Browntape is an inventory management service for merchants who sell on online marketplaces like Amazon or Flipkart. The startup has over 500 sellers in India which includes the likes of Organic India, Haridwar Shree Ganga Depot and multi-retail brand CMM Retail.
Companies that power the Indian e-commerce industry by means of providing various services stand to make a lot of money for their services.
Online retailer Flipkart, which took quite a few knocks during its big discounted sale day last October, has started preparing for another such event at the end of this year that will be “many times bigger” and is working to improve its ability to anticipate demand, deliver goods faster and eliminate sub-standard and fake products.”Big Billion Day this year will be many times bigger. We also want to see our mobile platform play a larger role in serving customers during this years’ sale,” Bansal told ET in an interview. Mobile commerce is growing twice as fast as desktop for Flipkart and currently accounts for over half of the company’s sales. “The pace at which this medium is catching up with and even surpassing desktops is faster than what we have seen in the US or China, where the concept of mobile commerce has been around for longer,” he said.
To know more, visit articles.economictimes.indiatimes.com