17 Aug 2017 16:03 IST

Sellers say Amazon yet to settle dues of last festival season

They claim requests sent over past eight months have still not been addressed

Sellers who were part of e-commerce giant Amazon.in’s elite Platinum Seller Programme, which the firm suspended this June, say they are yet to receive crores worth of pending claims incurred during the previous festival season sale.

Some of the sellers told BusinessLine that several official requests and claim documents that were sent to Amazon over the past eight months — to sort out issues such as losses incurred due to customer damaged/returned products, brand infringement by other sellers on the marketplace, fake orders, seller suspension for flimsy reasons, frequent increases in seller shipping fees and commissions charges — have still not been addressed by the e-tailer.

“Amazon owes me ₹1.2 crore for losses incurred during last year’s Diwali sales. The losses are from goods lost in transit, sale of damaged goods which went out of Amazon’s warehouses despite stringent quality checks, higher fees charged by Amazon vs the zero-fee commitment they made to me for the festive season” said a Platinum Seller from North India, on condition of anonymity.

“I was charged the standard Platinum Seller fee of 2 per cent, which includes delivery fees plus Amazon’s commissions. I have been in talks with them to clear the pending amount over the past eight months, but to no avail,” he said.

Another West India-based Platinum seller, who is in dispute with Amazon to settle a ₹15-crore due from last year’s festival season sales ,said the e-tailer had asked him to sell at huge discounts which would later be compensated to him; but the dues are yet to be settled.

Amazon, which introduced the Platinum Seller programme last June, subsequently cut down the seller count in the programme by 70 per cent this February, as it was incurring huge losses due to dampened customer spending post demonetisation.

The programme is an invite-only club of sellers that Amazon chooses to upgrade based on the quantum of sales they generate, low return rates, quick service, quality products with zero defects, customer ratings they receive, etc. In turn, the benefits they receive from Amazon are: weekly payouts instead of bi-weekly, ability to add ‘platinum’ keywords to their listings which improves visibility in search results, the option to create a custom Amazon storefront, etc.

‘Unfair practices’

With the Platinum programme revoked, Amazon now has one large seller — Cloudtail India, a joint venture between Amazon.com and Infosys co-founder NR Narayana Murthy’s Catamaran Ventures — which sources say contributes 60 per cent to Amazon.in’s total Gross Merchandise Value (GMV) of ₹2,300 crore per month. If this figure is right, it violates the government guidelines issued last year.

While the Centre allows 100 per cent FDI in online retail under the marketplace model, it does not allow marketplaces to have a seller contributing over 25 per cent of its total sales.

Asked why the Platinum Seller Programme was revoked, Gopal Pillai, Director and General Manager, Seller Services, Amazon India, said he did not wish to comment on it. On the unsettled dues of sellers in the programme, he said: “I am not aware of any such seller issues.”

A spokesperson from the All India Online Vendors Association (AIOVA) - Forum, which has over 3,000 registered sellers who sell in various online marketplaces, said: “Amazon Wholesale India buys in bulk from brands and sells it to its Platinum Sellers, who in turn sell it on Amazon.in. Now, with the programme being revoked, Cloudtail will effectively be Amazon’s sole Platinum Seller, receiving preferential benefits. For instance, a set of three shirts by Amazon’s private label Symbol is sold by Cloudtail at ₹299. How can other sellers compete with such low prices?”

Earlier this year, AIOVA had also written to the Competition Commission of India (CCI), highlighting the unfair competition created for a marketplace seller by Flipkart and Amazon.

“Cloudtail India, a seller on Amazon.in, and WS Retail, a seller on Flipkart, both of which contribute 70-80 per cent to the total sales on both marketplaces, are tendered special benefits, such as rock-bottom product pricing that is lower than distributor/manufacturing price and lower fees for doing business. Premium advertisement spots and warehouse slots are specially reserved for them, making it difficult for other sellers to compete with them. We hope the CCI takes action against these unfair practices,” said the AIOVA spokesperson.

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