Online Marketplaces Reviewed for Indian Online Sellers

In the age of eCommerce, it is almost criminal for a business to not sell online. While there is an option tostart an independent online storefor your business, it is also a good idea to give online marketplaces a try as well. If an online store can be compared to an independent retail store, a marketplace is more like a virtual mall. Marketplaces provide an established platform for sellers to sell their products online, but give lower margins in profit as compared to selling from an independent online store.But which marketplace is the perfect match for your business? To help you decide, weve put together a review of all the major marketplaces in India based on the following parameters: Pricing, Shipping, Packaging, Payout Period and Marketplace Size.Here is a consolidated list of the comparison of the different online marketplaces, which is followed by the detailed analysis of each of them.Reviews of Online Marketplace

MarketplaceAmazoneBayShopCluesTradusSnapdealFlipkart

PricingSubscription FeeINR 499/ MonthINR 499/ Month (For Basic Store)FreeFreeFreeFree

Listing FeeINR 10/ SaleFree for first 100 productsFreeFreeFreeFree

Payment Gateway FeeNone4.5% Paisa Pay Fee + 12.36% STNoneNoneNoneNone

Comission (Depends on Product Category)5%-15%1%-7%4%-20%4%-20%4%-20%4%-20%

ShippingSelf Shipping

Shipping Provided

Use Fulfillment by Amazon (FBA)PowershipUse eKart

Cost of ShippingRs 40 to Rs 45/ 500 gms + 1% of Item ValueRs. 40 49/ 500 gmsINR 45/ 500 gms for SCVBNot DisclosedINR 40/ 500 gms (approx.)INR 35/ 500 gms (approx.)

PackagingPackaging Provided?

Only for FBA; Handled by AmazonOnly for PowerShip customersProvided for SVB

Cost of PackagingNANAINR 3 9/ OrderRs 230 for 100 Tradus polybagsINR 3/ OrderNA

Payout PeriodShipment Confirmation from customer + 7 DaysOn Shipment Confirmation from customerEvery Friday for all orders Completed the previous weekProduct Delivery + 7 DaysDispatch Date + 3 WeeksTier-1 Seller: Dispatch Date + 7 business days

Size of the Marketplace2,500 Sellers7 Million Unique Visitors / Month450,000 Products Listed30,000 Sellers2.1 Million Active Users1.5 Million Product Listings12,000 Sellers42 Million Visitors / Year200,000 Products Listed700,000 Page Views/ Day20,000 Sellers20 Million Registered Users4 Million+ Products Listed1,000 Sellers$1 Billion Sales 2012-1320 Products Sold / Minute

You can read a complete review of the major marketplaces here.1) AmazonWhenever one thinks of an online marketplace to sell on, one of the first names that pop up is Amazon. The worlds largest online retailer has become a hot favourite with sellers since entering the Indian market in June 2013.Heres a breakdown of the services Amazon provides.a) Pricing:The following is a summary of the pricing charged by Amazon for listing and selling products. Monthly Subscription Fee:Rs 499. Closing Fee:Rs 10 charged on every sale that you make through them. Referral Fee/Commission:Ranges between 5% and 15% per sale, depending on the product category.You can check out the detailed pricing for Amazonhere.b) Shipping:A seller has the option of either shipping the product to customers himself, or using the Fulfillment by Amazon (FBA) to ship products.In case the sellers signs up for FBA, he is required to stock the products at the various Amazon Fulfillment Centers. Whenever an order is placed by the customer, Amazon packages and ships the product to the customer. The seller is charged extra for the following: Storage Space:Rs 14.2 per cubic feet per month Shipping:Rs 40 to Rs 45 per 500 grams Packaging:Rs 10 to Rs 25 per unit Delivery Service Fee:1% of item valueYou can read the detailed pricing card for the Fulfillment by Amazon programhere.c) Packaging:Packaging material is not provided by Amazon for sellers, unless they sign up for FBA. In that case, packaging is undertaken by Amazon themselves.d) Payout Period:Amazon disburses payments to sellers bank accounts once every week. A seller is eligible to get paid for an order 7 days after it is confirmed as shipped.e) Marketplace Size:Amazon has close to 2,500 sellers on its marketplace in close to 10 months of operation in India. The website receives almost 7 million unique visitors every month. It offers more than 450,000 products, in addition to 12 million books and 2 million e-books.2) eBayAnother name synonymous with selling online is eBay. The online retail giants were founded in 1995 and took just 10 years to enter the Indian market, in 2005. One major difference between eBay and other marketplaces is that you have two options while pricing your products.You can either list a fixed price for a product or choose an auction type price. You can select a minimum bid amount and also an end date for the auction. The highest bidder at the end of the auction gets to purchase the product.a) Pricing:The pricing structure on eBay is a little more complicated and varies depending on a lot of factors. Here is a brief of the different charges that a seller incurs on eBay. Subscription Fee:On eBay, you can choose to be a Non Shop Subscriber or a Subscriber (3 different plans). You avail benefits depending upon which plan you are subscribed to. Here are the rates for the different plans available on eBay. Basic Store:Rs 499 per month Featured Store:Rs 1999 per month Premium Store:Rs 3999 per month Insertion Fee:To list a product on your store, you are charged a listing fee. The first 100 products are free of the listing fees for every seller. After that, the rates charged are as follows.

The rates are shown for the different listing types. The first category is for the 1, 3, 5, 7 or 10 days of listing. The second is a 30 day listing option. PaisaPay Fee:For every sale made through eBay, you will be charged 4.5% as the PaisaPay fees. In addition, on this PaisaPay fee (only interest amount, not the total sale value), 12.36% Service Tax is also applicable. Final Value Fee: For every product that you sell, you will also be charged the Final Value Fees. It is a percentage of the total sale value. This varies between 1% and 7%, depending on the type of product you are selling.You can check out the detailed pricing structure for selling on eBayhere.b) Shipping:eBay sellers too have the option to either ship the products themselves, or use eBays shipping solution PowerShip.Unlike Amazon, eBay does not have any physical fulfillment center where a seller can stock the products. Once the seller packs the products himself, representatives from eBays logistics partners pick up the order from the seller. The package is then delivered to the customer.Here are the shipping charges for eBays PowerShip.

You can check read more about PowerShiphere.c) Packaging:Just like Amazon, packaging material is not provided to the seller by eBay unless you sign up for PowerShip. Once you sign up for it, you are provided eBay branded packaging material to pack your orders.d) Payout Period:Once the customer pays for the product, eBay holds the payment till the buyer confirms receipt of the order in good condition. Once the confirmation is done, eBay transfers the amount to the sellers account. So, there is no definite payout period, but instead depends on the shipping time and customer confirmation. The entire process usually takes 7-10 days from the date of order.e) Marketplace Size:There are more than 30,000 sellers active on the marketplace in India and has over 1.5 million live listings on its website at any given point of time. There are more than 2.1 million active users on eBay in India from more than 4,000 cities across the country.3) ShopcluesA comparatively newer entry into the Indian eCommerce scenario, ShopClues has seen immense growth since its launch in 2012. The marketplace offers great deals for buyers and is popular among young shoppers online. The growth curve has risen steeply over the last 12 months and the company has also raised more than $15 million in funding till date.a) Pricing:The pricing for ShopClues is very less complicated and is designed to attract merchants to sell on the marketplace. The pricing structure is performance based, which means that a seller only pays for a successful sale on ShopClues. Here is a breakdown of the charges a seller has to incur. Subscription Fee:Nil. There is no subscription or listing fee charged by ShopClues. Listing Fee:Nil. There is no fee for listing your products on ShopClues. Selling Service Fee:For every successful sale, a commission is charged by ShopClues. The charges vary between 4% and 20%, depending on the type of product that you sell.You can check out the detailed pricing structure for ShopClueshere.b) Shipping:For shipping orders that you receive on ShopClues, a merchant has to use Fulfillment by ShopClues. A merchant is not allowed to use his own logistics arrangement to ship products through ShopClues.A merchant starts off as a ShopClues Velocity Basic (SCVB) member. Once he starts selling on ShopClues and meets the required eligibility criteria, he is given the option to upgrade to the ShopClues Velocity Premium (SCVP) plan. The shipping charges and services offered vary depending on which plan you are part of. The shipping charges are as follows: ShopClues Velocity Basic:Shipping charges for every 500 grams is Rs 45. ShopClues Velocity Premium:Shipping charges for every 500 grams is Rs 72. The additional charges are because of better services provided in packaging and shipping your orders.c) Packaging:ShopClues provides packaging material to sellers to pack their products.In the SCVB plan, a seller has to pack the product and the courier representative picks the packed product. In case of SCVP, the seller just has to hand over the loose product and the entire packaging and shipping procedure is taken care of by ShopClues. Packaging charges:For every item packed by ShopClues, a charge of Rs 3 to Rs 9 is levied on the seller. For most items, this charge is Rs 9.d) Payout Period:The merchants are paid out every week on Friday. The payouts are made for all products sold a week prior to that Friday which have achieved the Complete status.e) Marketplace Size:Over 12,000 registered merchants are registered on the marketplace. More than 2,00,000 productsare listed for sale on ShopClues to over 42 million visitors every year.4) TradusTradus is the Ibibo groups online marketplace venture in India which started in 2009. It has grown to be a big marketplace known for offering good discounts for customers and is growing steadily.Here is a summary of what sellers can expect from selling on Tradus.a) Pricing:Tradus pricing structure, like ShopClues, is based on performance only. You only pay when a product gets sold through them. Here is a brief of the prices a seller has to bear on Tradus. Subscription Fee:Nil. There is no subscription or listing fee charged by Tradus. Listing Fee:Nil. There is no fee for listing your products on Tradus. Success Fee:The success fee is the commission charged by Tradus on every successful sale that you make through them. The charges vary from 2.5% to 28% depending on the products that you sell.You can check out the detailed pricing structure for Tradushere.b) Shipping:To ship a product through Tradus, a seller is required to use Tradus logistics partners. The shipping costs vary depending on the package size and weight. The detailed shipping rates are revealed only once a seller completes the registration process on the marketplace.c) Packaging:Packaging the orders is the sellers responsibility. To get Tradus branded packaging material, you can purchase the same from themhere. Various types of packaging material are available. A pack of 100 pieces of low density polyethylene bags cost Rs 230. You can also use your own packaging material for shipping your products.d) Payout Period:The amount received from a successful order is credited to the seller within 7 days of successful delivery of the product to the customer.e) Marketplace Size:Though it still ranks relatively lower than its counterparts when it comes to revenue, Tradus has still managed to woo a strong base of sellers on its platform. Though the exact number is something that they do not disclose, there are thousands of transactions every day on the marketplace. The website attracts close to 700,000 page views every day.5) SnapdealSnapdeal is a daily deals site turned online marketplace that started 4 years ago. Its huge rise in the last few years has seen it raise a tremendous amount of investment to fund its growth further. Here is a review of the services it provides to sellers for selling their products on their platform.a) Pricing:Snapdeal is another marketplace that believes in a performance based pricing structure for its sellers. Here is what all you are charged for when selling at Snapdeal. Subscription Fee:Nil. There is no subscription or listing fee charged by Snapdeal. Listing Fee:Nil. There is no fee for listing your products on Snapdeal. Successful Sale Commission:Though Snapdeal does not allow anyone to share the exact commission rates, they usually charge between 4% and 20% for every successful sale through them. The rates are similar to those offered by ShopClues.b) Shipping:For a Snapdeal seller, it is mandatory to use the services of their logistics partners. The seller has to keep the order packed and the courier partners pick them up from the seller and deliver it to the customer. Shipping Charges:The exact rates arent disclosed publicly, but they are approximately Rs 40 for every 0.5 Kg shipment. This cost is inclusive of all shipment charges.Snapdeal also provides its sellers an innovative order fulfillment tool named SafeShip, which they can use to track and manage their orders with ease. Recently, they opened the SafeShip service for rival eCommerce companies to use as well. You can read more about SafeShiphere.c) Packaging:Packaging material is provided to the sellers by Snapdeal for an extra charge. The packaging material is charged at Rs 3 per order.d) Payout Period:The seller is paid out for a successful order within 3 weeks of the dispatch date.e) Marketplace Size:Snapdeal is one of the largest eCommerce players in India, with more than 20 million registered users. There are upwards of 4 million products up for sale from more than 20,000 sellers.6) FlipkartFlipkart is the success story of the Indian eCommerce industry. The 7 year old company is the largest eCommerce startup in India and has become a household name in the country.It caters to a large number of sellers and buyers and offers wonderful services, which has seen its reputation skyrocket in the last few years. Here is how the marketplace ranks up in the different parameters.a) Pricing:Flipkart is another marketplace that follows the performance based pricing structure. Here is a breakdown of the charges that you have to bear on Flipkart as a seller. Subscription Fee:Nil. There is no subscription fee involved in selling your products on Flipkart. Listing Fee:Nil. There is no fee required to list your products on Flipkart. Commission:Flipkart also maintains confidentiality with regards to the exact commission rates that they charge on every product. The charges vary between 4% and 20% for every successful sale through them and many sellers get personalized rates depending on the quantity of sales they guarantee.b) Shipping:For shipping, Flipkart uses its own logistics service eKart. It is mandatory for the sellers to use their services when shipping orders to customers. It is the sellers responsibility to pack the order and keep it ready for the courier representatives, who collect it from the seller. Shipping Charges:Once again, the exact rates arent disclosed by Flipkart, but the shipping rates are around Rs 35 per 0.5 Kg delivered through eKart.c) Packaging:Flipkart usually does not provide packaging material to its sellers. But in certain rare cases, if a large quantity of orders is guaranteed by a seller, Flipkart does provide the material.d) Payout Period:The payment cycle on Flipkart for sellers is different for the two different tiers of sellers. All new sellers start off as Tier-2 sellers. Once the seller completes one month on Flipkart with minimum 30 transactions, he is considered a Tier-1 seller. However, for this to happen, a settlement defect rate of less than 5% has to be maintained. If it shoots higher than 5%, the Tier-1 seller status is downgraded again to Tier-2.The payout times for the different tiers are: Tier-1 Seller:The payment cycle for all tier-1 sellers is Dispatch Date + 7 business days. Tier-2 Seller:The payment cycle for all tier-2 sellers is Dispatch Date + 12 business days.e) Marketplace Size:Flipkart has a relatively low number of sellers when compared to its competitors, with around 1,000 sellers active on the marketplace. Still, it was the first Indian eCommerce company to touch $1 billion in sales, earlier this year. On an average, more than 20 products are sold on Flipkart every minute.So that is what every major marketplace has to offer sellers in India. Do you also sell on any marketplace? Or do you plan to start selling there soon? Do leave us your experiences, queries and reviews in the comments below!

Registering an e-commerce business in India: Sole Proprietorship 101Tanya Rao12,9076282

Off lately we have been getting a lot of queries about getting businesses registered, so we thought that wed make it easier for you.Any e-commerce business which wants to accept online payments, needs to be a registered company. So as to be able to integrate an authorizedpayment gatewayon the website.We wrote this post to be a one- stop guide for all your queries about getting your brand up and working to start selling online. And the easiest way to do that is to register your business as a Sole Proprietorship.Let us begin with understanding what a sole proprietorship has to offer.For starters, sole proprietorship is the easiest firm to start, has lower legal compliances and is fairly easy to tackle. A proprietorship business and its proprietor (i.e. you) are a single entity in all legal matters. Indian law doesnt treat the two differently as is the case with a company registered as a Private Ltd or a Public Ltd or even a Partnership firm. And in view of this, you are taxed at individual rates instead of the corporate rates. So it greatly reduces your tax formalities as you have to file only one personal income tax return.So you and your brand are one soul, with no biases whatsoever. You can even run it out of your home, for which no special registration is required. But a note for whenever you intend on expanding and setting up a physical commercial store, you will have to fill in some paperwork with your local municipal corporation and will need to check in with theShops and Establishment Act.Now to dive straight into the nitty- gritty of Sole Proprietorship, we explain to you in detail how to register, thecost of setting up your online brand, taxation of a sole proprietorship and business licenses required.Registration of Sole ProprietorshipYou can register your ecommerce business under sole proprietorship at your nearest local municipal corporation office. You need to submit the Shops and Establishment Form to complete your registration. Along with it, you are needed to submit an undertaking. The fees for registration may vary depending on the state and the citys municipal corporation area.For the greater Mumbai municipal corporation area, the Shops and Establishment Registration form, the undertaking needed with it and the fee schedule for the same can be found on the following links.1. Registration Form2. Undertaking3. Fee ScheduleYou can find a list of municipal ward offices in your city on your citys municipal corporations website.Note: While registering, you will be needed to submit an address proof for the Shops and Establishment registration. You may submit an address proof for your home or any other place you will be working out of.Cost to set up a Sole Proprietorship businessThere is absolutely NO additional cost required. All you really need is acurrent accountin the name of your business, at a bank of your choice. That is it! All you need to do is, at the local bank branch of your choice, ask for a form for proprietorship firms and get a bank account ready for all financial transactions.When opening an account you may also need to submit an address proof such as an electricity or telephone bill or a rental agreementif youre going to be renting out a spaceor your shops and establishment registration.TaxationYou dont need a separate PAN for your business for taxation purposes. Your personal PAN will serve the purpose. And when filing Income Tax returns, you will have to file returns in your personal name.As you and your sole proprietorship business are one soul, you dont need to pay corporate tax rates. As mentioned earlier, individual tax rates apply as all profits, losses, assets and liabilities are the property of the proprietor. And the proprietor pays self employment taxes on any profits made, making it all the simpler.Service tax is applicable only if youreselling a serviceto your customers. And similarly if you are selling goods, VAT, Excise and/or Sales Tax are applicable. But all these taxes come into play once youve crossed an annual turnover of 10 lacs. You may also need to consider Professional Tax, if youre employing people.Business licensesDepending on the nature of the business, you may need different registrations and licenses.1. Recommended-Shops and Establishments Act:This registration would be needed incase you want to set up a physical shop and plan to employ people.And it is very essential for getting your own payment gateway for your online store.2. CST/VATregistration:If you are going to be selling goods, then VAT or CST (between states) may be needed once your annual turnover crosses 5 lacs.3. Service tax:Registration for service tax is mandatory and may be required once your annual sales turnover crosses 10 lacs.4. Professional Tax:This tax is mandatory if you have even one single employee. Each state is allowed to create its own guidelines, so it would be advisable to check whether it is mandatory to register for professional tax in your particular state.All these registrations and licenses may vary from state to state, so please do check your states guidelines and regulations (exemptions, if any) to know better.Before you go ahead, think up a catchy name for your online business. And get it trademarked. Avoid going in for generic names, as youll have to suffix your city name or India at the end for it to be distinguishable.Now that everything is on the table we wish you the best in setting up your brand! We hope it kicks ass!PS. Dont wish to register your business to get a payment gateway? Now you can accept online payments on your ecommerce store without registering your business. Heres how:Payment Gateway for Individuals and Non-Registered BusinessesDid we miss a point? Share your experiences with us in comments. We would love to hear the ground reality of trying to register your company. Is it a very tedious process?Reference Links:1. You may also like to check out the following link, about starting a business in various cities in India. It includes details about Shops and Establishment registration, Sales tax, Professional Tax, etc.Doing Business in India2. The following link provides some good insight into the Shops and Establishments Act in Karnataka.When do I need to apply for a Shops and Establishments Registration for my business in Karnataka?Courtesy:Doing Business, International Finance Corporation