Tuesday, 16 May 2017

How safe is our inventory in your warehouse, FBA sellers ask Amazon

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In April 2017, Amazon’s founder & CEO Jeff Bezos declared his plans to continue investing in technology and infrastructure through its India ecommerce business. Just days after this announcement we were greeted with the news of the online giant doubling its warehouse capacity. In 2017, Amazon is going to build 14 new fulfilment centres (FC) across India. The purpose of these warehouses would be to assist sellers in order fulfilment and store their inventory.
But sellers inform Indian Online Seller (IOS) that Amazon first need to check miscreant activities at their existing warehouses. Several FBA (Fulfilled by Amazon) vendors reached out to IOS and shared incidents about missing/stolen/damaged inventory.
Amazon’s FCs in Mumbai, Pune, Ahmedabad and Hyderabad were few that featured in the list of missing inventory complaints.

Seller 1 – Constant theft/missing units every time my goods reach Amazon warehouse

Seller Ashjad Aziz started selling on Amazon in September 2015. He signed up for the FBA service in December 2015. Looking at the good response, Aziz increased his stock size from 100 per month to 500-600 per month.
“Every shipment sent there had a unit or 2 missing always. Most of the time I used to file a claim and used to get a partial refund after waiting for 1-2 months. Initially I used to send my shipment through an Amazon approved 3P carrier called AMPM. Later when Amazon started their own shipping, I sent through them for triple the price just so that my goods reach there safely. Still the missing of goods was common. And the money reimbursed by them is peanuts compared to the goods value,” says Aziz while speaking to IOS.
He adds,
“My last shipment sent on last week of March had a small carton full of T-shirts (around 12 units). Out of that 6 showed missing when the re-con report came in. I applied for a claim and after a month 4 T-shirts showed up miraculously. The remaining 2 units are still in the process for claim. It’s been 1.5 months now and the only response I get is ‘we are looking into the issue’.”

Seller 2 – Amazon warehouse in Ahmedabad is in a complete mess

Sanket Vaghani who runs Bollywood Designer is thinking about quitting FBA if his goods continue to disappear and appear suddenly. Vaghani started selling on Amazon in March 2016 and signed up for FBA in August 2016, only to discontinue it after a month. In March 2017, he signed up again and has sent around 1000 units.
The first 3-4 dispatches went out smoothly. But the last batch of shipments (starting from April) have been filled with issues such as units missing, miscalculation of ASIN by Amazon, and inconsistent stock report. IOS has reviewed the proofs shared by the seller to back his claim.
Vaghani says,
“For missing 2 units case, Amazon said you have sent 2 units less. But we crosscheck each and every unit and quantity before dispatch. In another instance, they calculated 71 units out of 78. Then we raised claim for missing 7 units. Now since yesterday suddenly units are showing 80 as total received which is incorrect. How it is 80 when we sent 78? This is truly unbelievable.”

Seller 3 – With turnover of more than Rs. 50 lakhs/month, why would I send less inventory than promised?

A seller AG (name withheld on request) is baffled by Amazon’s response to his complaints about missing units from their Ahmedabad FC. The marketplace says that the seller dispatched less units but AG wonders why he would do that.
“We are facing this problem. Stock goes missing from FC SAMB/AMD1 and Amazon just orders that you have sent short. We have turnover of more than 50 lakhs a month. Why would we send short and ask for refunds of 2-3 thousand?” AG asks.
He adds,
“I am 100% sure these stocks are either robbed by the people working at FC or the higher authorities are playing games. A few months back, I got a reference that ‘Amazon Aslali has stocks of 25 lakhs to be sold, if you are interested you can get a good deal.’ I wonder if these are all those lost products of poor sellers.”

The list is huge

During our research we came across at least 3 dozen more cases (just top results of a quick search on the Internet; there can be more) that talked about missing inventory from Amazon FCs. And it is not restricted to Amazon India; vendors from the US marketplace too have the same complaint.
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Amazon assures that missing inventory matter is thoroughly investigated

Like always, IOS got in touch with Amazon and laid out the accusations made by sellers. Below is what they have to say regarding the missing/stolen inventory issue.
“We have an elaborate inventory control program at our fulfilment centers to monitor any missing inventory from its exact location. This weekly audited program measures the inventory accuracy through daily deep dive of top missing and found items, training of associates on process, putting in checks to identify possible misplacement of inventory and correcting the defect through multiple count strategies. In case of any missing inventory in the count, the matter is escalated for further investigation. Additionally, all claims for warehouse loss are researched by the internal teams and all actual losses are paid out as seller reimbursements,” asserts Amazon India Spokesperson.

What can sellers do?

The most straightforward and obvious solution to this problem is to opt for self-fulfilment rather than FBA. Seasoned sellers who handle their own deliveries believe that it is always better to have complete fulfilment control compared to relying entirely on marketplaces.
“Our FBA sales are less than 10% of our total sales on Amazon, so not much of my stock is in FBA, thus reconciliation is easy for me as of now, and till now I have not been a victim of theft from FBA. We are not focusing much on FBA, as it is not actually solving our problems. In fact reconciliation and maintaining stocks separately for FBA is creating issues for us,” shares seller Mit Kotak, who owns Daily Shoppers retailing business.
If closing FBA is not a feasible solution for you then keep an eye on FBA shipments regularly. Filter your list of shipments and segregate the inventory in ‘receiving’, ‘delivered’ and ‘checked-in’ categories. Investigate or contact Amazon asking about the shipments queued in the ‘receiving’ category for long.
Please keep in mind that the claim window period as per FBA Lost and Damaged Inventory Reimbursement Policy is 60 days. Amazon doesn’t entertain reimbursement requests after the claim window so please keep track of your stock.
Is your inventory too disappearing from Amazon’s FCs? Do you think your stock is not safe at the marketplace’s warehouses? Is there an alternate way to safeguard it? Let us know your views through comments.

Loss of financial records has Snapdeal sellers hassled & the etailer in hot water?

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Snapdeal has been lagging in third place for a long time now and things only seem to be getting worse for the etailer. The company CEO, Kunal Bahl last year said that Snapdeal was 2-3 years away from making profits. But, experts believe only one domestic player will survive and many have their money on Flipkart. Up till February, we heard about Snapdeal confidence in its capacity to make profits. Now, it appears the etailer’s troubles are everyone’s focus.

Snapdeal going off the rails

By November last year, Snapdeal began focusing on funding and cost-cutting. The etailer raised seller fees and was allegedly withholding seller payments. Recent reports revealed that the ecommerce company was in legal trouble for cheating sellers.
Financial discrepancies are the latest of its problems to come to light. The trouble Snapdeal and its online sellers are facing are the result of no proper bookkeeping and the absence of a sound system for recording finances.
On the condition of anonymity, several persons and ex-executives from the company stated that many seller disputes were caused due to data discrepancies in the seller management function, this included data loss and technical bugs in the system.
An internal email addressing seller payment issues stated,
“POD (proof of delivery) data of more than three months are not available. It is a grey area.”

How bad does this problem get?

“The seller panel shows negative amounts, in lakhs and crores, but Snapdeal has not been able to come up with accurate data in a clear format. Only once this is done can there be any reconciliation between sellers and Snapdeal,” said a person with direct knowledge of the payment issue.
According to him, the discrepancy problems at Snapdeal have been continued for more than a year and have affected just about every online seller on the platform.
The person further mentioned, “Besides, there are issues like payment-order mismatch, several instances of the same order ID, and several cases of inventory leakage.”
Ex-Snapdeal senior executives feel that the loss of data may have started from 2014-15. These kinds of mistakes by the ecommerce start-up, which claimed to tackle the traditional retail problems with technology, have confused and unsettled stakeholders.

Seller account

Online apparel seller, Rajdhani Cotton filed a police complaint against Snapdeal for non-payment after a long dispute about transaction data.
“During our meetings to resolve the dispute, Snapdeal representatives kept telling us that they did not have the data, and asked us to present ours. Many other sellers have faced similar problems but they are just waiting to see how this pans out,” Rajat Gupta of Rajdhani Cotton recounts.
According to the petition filed with the Delhi police commissioner, Snapdeal via an email (dated 21/09/15) sought to mislead the seller.
“…by relying upon purported account books which are not in its possession, therefore clearly, the accused company has forged the instant documents that it seeks to reply upon.”

Not a one-off incident

The All India Online Vendors Association (AIOVA) a lobby group of 2,000 online sellers claim that the issue Rajdhani Cotton is facing with Snapdeal is not a new problem.
The group’s spokesperson said, “Such an accusation is not a one-off incident. We have accumulated similar data from our members where due to data and technical problems, more than Rs 1.5 crore of over 100 members is due at Snapdeal.”
“All cases have been duly flagged by the sellers. But due to Snapdeal’s inefficient systems, they are forced to take legal remedy,” the spokesperson further stated.

How is Snapdeal handling the issue?

Two sources from those cited above mentioned that continuous rearranging of staff in key areas like tech, seller management and the supply chain made matters worse. Snapdeal is attempting to address the problem but has not seen any success. It may also engage with a couple of technology vendors to fix these problems.
With regards to data loss, “Snapdeal categorically refutes claims of any data loss as misleading and malicious. Our systems are extremely robust and we maintain our books of accounts in line with the best standards in the industry; audited by reputed third party firms,” Snapdeal informed IOS.
However, it did reply to questions about AIOVA’s charges of pending payment.
The online marketplace said, “All seller disputes are managed in accordance with seller policies and contractual agreements. In case of any concerns flagged by the seller, ample opportunity is given to the seller concerned to provide any additional information or documents in support of their claim.”
The charges by Rajdhani Cotton, on the other hand, were dismissed by Snapdeal.
The ecommerce platform responded to it with, “Claims raised by Rajdhani Cotton are frivolous and will be dealt with as per contractual provisions and legal process. Despite multiple opportunities, the complainant has been unable/ unwilling to produce documents in support of the amount claimed by it.”
Snapdeal may be up for grabs and Flipkart is ready to claim it. Flipkart is likely to value the company for less than sixth of its $6.5 billion valuation. The impact of payment data disappearances is yet to be ascertained.
However, according to a former senior Snapdeal executive, “These issues are quite common in e-commerce and all companies face them. Issues at Snapdeal have now become sensational because of the sale talks.”
Payment mess-ups are certainly not uncommon in ecommerce. But, does this mean they supposed to continue happening? Sellers, how do you plan on responding?

Monday, 15 May 2017

Could Flipkart-Snapdeal, Paytm-Frecharge merger be game changer for Indian ecommerce?

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IOS had predicted that consolidation would be one of the top ecommerce trends in 2016. In 2017, the trend still continues to stay relevant as top Indian ecommerce firms get ready for their respective mergers.  
In the last few years, tertiary companies and ecommerce-centric firms were being acquired by the big ecommerce players. For example: Flipkart acquired fashion etailer Jabong in July 2016 or Snapdeal bought digital payments firm Freecharge.
But in 2017, top online marketplaces are consolidating. For instance: Flipkart took over eBay India in April 2017. If all goes well, then two more mergers are in the line to be finalized soon.

All clear for Snapdeal merger with Flipkart?

According to people close to the Flipkart-Snapdeal merger talks, early-stage investors and co-founders have finally given their approval. As IOS reported earlier, the consent of Nexus Capital was pending. But now all the decision-makers have agreed to the marketplace sale to ecommerce leader Flipkart.
Buzz is that Flipkart would pay $1 billion to acquire Snapdeal in an all-stock deal. And that the co-founders Kunal Bahl and Rohit Bansal would get $15 million each. It is still not the final offer as Nexus and Kalaari Capital are looking to sell Snapdeal at a much higher valuation. But looking at Softbank’s losses due to its India investments including the Bahl-led company, Flipkart might not up its offer price.
While all the concerned parties have verbally agreed and an unofficial offer has been made, everyone is waiting for the due diligence process to commence. Snapdeal’s business would be appraised by people appointed by Flipkart to evaluate its commercial potential and determine assets & liabilities.
Another interesting piece of information is that after merging with Flipkart, Snapdeal co-founders Bahl and Bansal would resign from their positions and would not be part of the new entity in any capacity.
“Both founders will not be part of the merged entity in any capacity, post the acquisition of the company by Flipkart,” an insider revealed.

In the interim, Paytm is ready to buy Freecharge

A lot has changed since the news broke out that Mobikwik is going to acquire Freecharge. As per fresh reports, it is Paytm and not Mobikwik that is going to buy Snapdeal’s digital payments arm Freecharge.
The Alibaba-backed company Paytm has entered into an inoperative agreement with the e-wallet firm to buy it at a valuation of $50-90 million.
As reported earlier, Snapdeal’s top investor Softbank is looking to invest $1 billion in Paytm to gain more control. If the online marketplace ends up buying Freecharge as well, then Softbank would be able to execute its exit plan smoothly.
An insider disclosed,
“The funding deal with SoftBank for Paytm does not have Freecharge as a rider but if Paytm is satisfied with the due diligence it will likely agree to buy Freecharge since the price has come down drastically.”

A grand consolidation on the cards for Indian ecommerce

If both the above mentioned mergers materialize, then it would possibly be one of the biggest game changers for the ecommerce industry in India.
Experts believe that consolidation of big players would help to get better funding deals and reduce cash burn rate of the industry. Focus would shift on long-term growth and sustainable business models rather than pouring money on acquiring new customers at any cost.
Haresh Chawla, Partner at True North stated,
“Consolidation was bound to happen because the game was so shallow and you needed hands with permanent capital on your balance sheet. Now, what has happened is the player with the better model has been able to get permanent capital on their balance sheet, which is Flipkart and Amazon.”
So very soon the Indian ecommerce battle would be between Amazon, Flipkart and Alibaba. It would be interesting to see how that pans out.

What are customers saying about you?

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You might have been told a million times, “care less about what people say”. This is true in most cases. It can help you develop thick skin and achieve the impossible. But when it comes to business, you have got to be all ears! Knowing what people have to say is as essential as the air we breathe!
In our last post we mentioned the importance of content. It can be a means of communicating with your consumers. But content isn’t restricted to what you say! Consumer comments and reviews about you are also linked to content. And they have the power to build your brand as well as shatter it into a million pieces.

Why should you care?

Let’s put it in simple terms, have you ever heard people talking (or been part of the conversation) about, “where can you get the best shoes or clothes or gadgets?” When you ask your friends to suggest a good place to eat, you’ll get a list of places with experiences or comments attached! Like, Domino’s is too pricy, the local pizza joint is too crowded, John’s CafĂ© has no variety! If either of these places knew what people were saying, they could come up with solutions.
Now think product wise, wouldn’t it be nice to know what people are saying about your products? What are they telling their friends, family and even complete strangers? As a seller you need to be aware of this fact – “people will talk no matter what you do.”
  1. Learning experience

Even business leaders like Sir Richard Branson believe we can learn a thing or two from our consumers. He says, “Your education really begins on the day you open the doors to customers.” Your main goal as a seller should be to meet your ultimate consumer’s needs. By listening to them speak, you understand them and their needs better. This way you know what’s going wrong where and you can device a suitable solution. At the same time you will learn what works and needs more effort.
  1. Competition

Did you know your customers are checking out your competitors as well? Yup you are not the only one they’ve been shopping with! Hearing them out will give you insights on their thoughts and feeling towards your competitors. Take this classic example, a consumer has a bad experience with you, so they say the products of XYZ seller seem way better. Some may even explain why, saying – they charge more but the product is worth the price. Do not dismiss this comment! Look into the specified seller. See what he is willing to offer that you are not, incorporate what you’ve learnt into your selling strategy. And by all means, make sure you let the dissatisfied consumer know how you have rectified the issue they experienced with your services.
  1. Predict the future

Simply knowing what customers are saying about you is enough to predict their future requirements. In some cases the predictions will be handed to you on a silver platter. Your delivery options may be good and customers may have praised you about them too. But one shopper says, “Hey, why don’t you guys offer same day deliver?” Consider why you don’t offer this facility. Check with your resources and see if it could be a possibility. Do you see how listening helps? So jump at the opportunity to hear what people are saying about you!
  1. Bad reviews hurt

A single bad review can hurt your business. Since it is up for the world to see, you could lose a major chunk of conversions. In 2015, business.com said around 77% of people read reviews before buying. More than half of the online shopping community is interested in knowing consumers opinions and experiences with a particular seller and his products. Would you risk the possibility of losing 77% of your consumers all because of one lousy review?
  1. SEO loves reviews!

Search engines are on the lookout for fresh new content, which means, customer reviews can serve to your advantage. And since so many people want to see reviews they tend to enter a “product name + reviews” into their search engine. If you happen to have reviews linked to your product, you could rank better in search rankings; meaning more traffic and more sales.

How do you listen to what consumers are saying about you?

Alright so we know the benefits of being a fly on the wall, but how do we get on with the process of hearing what people have to say?
  1. Read your own reviews!

This is a great way to start. Read through your reviews and pick out the negative ones and the ones with suggestions. Try to get in touch with the bad reviewers to see if you can patch things up. As for good suggestions give them a thumbs up so reviewers know you are listening. When you come across positive reviews give yourself a pat on the back because you deserve it.
  1. Tune into social channels

Get on social media and let your consumers know you are there too. Social mediums like Facebook and Twitter act a neutral ground, so consumers will feel free to say whatever they want about you and your competition. They may even compare you and point out your flaws. Check your business model and your functioning to see if this makes sense.
  1. Call up your customers

Online sellers sell hundreds of goods. So in addition to dealing with inventory, maintaining your relation with suppliers, enforcing quality checks, dealing with legal matters and financial matters, customer relations takes the strain. With the assistance of ecommerce you do not worry about interacting with the consumer.

How does it work?

Step 1 – Call the customer

The customer relationship team at Browntape call every customer who has made a recent purchase from you. The purpose of the call is to gain feedback. Based on the information retrieved from the consumer, we label it as positive or negative feedback. Customers are then sent a link to post their reviews online.

Step 2 – Control the situation

The best way to pacify an unhappy customer is to identify their problems and provide a plan of action. That works for both sides the buyer and the seller. Our customer specialists carefully listen to the issues of each customer and provide instant answers. The most popular inconvenience leading to bad reviews is delayed refunding. To control the situation the consumer will be informed about the process and when they can expect to receive payment.

Step 3 – Remove negative reviews

It takes just one piece of negativity to bring down a business. So we make sure every negative comment is converted into a positive one. Once an unhappy consumer is satisfied by their standards they can be requested to take down their negative reviews. Prompt action can control the damage!

Amazon India partners FIEO to train sellers on ecommerce

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Ecommerce major Amazon India has partnered with the Federation of Indian Export Organisations (FIEO) – South Zone to train merchants on selling their products online.
FIEO is the country’s apex body of export promotion.
Under the partnership, entrepreneurs manufacturing, retailing and exporting products will be educated on the digital business opportunity, brand building, documentation, listing methodology and Amazon services, a statement said.
This includes categories like home textiles, kitchen linen, leather accessories, leather shoes, apparel, home decor products, incense and essential oils among others.
Amazon India said south India has seen close to 100 per cent increase in terms of the number of global sellers in the last two years.
“Starting with the textile hub of Coimbatore, these workshops will be held in Chennai, Karur, Bengaluru, Madurai, Vijayawada, Tirupur, Nilgiris District, Hyderabad and Kochi over the next two months,” the statement said.
Amazon also offers guidance on the type of deals sellers can offer, the kind of advertisements they can run on these platforms and how they can use social media channels to drive awareness about their listings on the various marketplaces.
“Our partnership with FIEO will help Indian exporters take their Made in India products to millions of active customers across the globe,” Amazon India Head Global Selling Abhijit Kamra told PTI.
Over 20,000 sellers today from India currently sell over 45 million products through 10 global Amazon marketplaces.
“We see immense potential in the country and look forward to enabling thousands of FIEO members to expand their business through our Global Selling Programme,” Kamra said.