Flipkart: Flipkart sellers allege price curbs
MUMBAI: Several sellers on Flipkart have alleged that the platform has locked the selling price of products and is not allowing them to change or raise the prices of their listings. This mechanism came into place on May 18, shortly after the Walmart-owned e-commerce firm announced the rollout of a simplified rate card policy.
Four sellers TOI spoke with said that Flipkart did not notify them before placing restrictions on pricing.“Flipkart cannot control the selling price of a product. Many products on the platform are now being sold below our purchase price. Sellers whose products were already stocked up at Flipkart’s warehouses had no option other than selling them at a lower price,” one of the sellers said. This sudden move by Flipkart has nudged many platform sellers to remove their listings and display an out of stock notification. “I have 1,250 product listings on Flipkart. 800-900 of them have been taken out,” added another seller.
Flipkart’s justification to sellers is that irrespective of the pricing restrictions, they are getting the same average settlement value. Average settlement value applicable for each item sold refers to the final amount a seller earns after deducting platform commission, logistics and other fees. Sellers said that a lower price listing on Flipkart will force them to change the pricing on other platforms like Amazon and Nykaa. Besides, they will face a major issue during sale events when they will have to give discount on an already lowered price, eroding their earnings. “Typically, discounts or any form of promotional scheme during festive sale events is applied on the last month’s average selling price. Since Flipkart is not allowing us to raise prices, we are already selling at a lower price and during events, we will be forced to sell at a further lower price,” a seller said.
In a statement, Flipkart said that the company is compliant with all FDI regulations and does not influence pricing. “As a homegrown e-commerce marketplace, Flipkart stands steadfast in its commitment to adapting and evolving in sync with our sellers’ requirements. The all-new, simplified rate card policy is aimed at optimising growth avenues for sellers while enhancing settlement transparency. The policy was introduced recently, and we are working closely with our sellers to drive a better understanding of the new policy and make necessary improvements. Since implementing the changes in the last couple of weeks, we’ve seen an increase in business transactions and a rise in active sellers,” a spokesperson said.
A seller said that in April, he offered a set of products at a discounted pricing to get more traction but allegedly, Flipkart has now set that pricing as the base price for the product and is not allowing him to update the price. “I was making a loss then. I want to raise the pricing now but I cannot,” the seller said. A seller selling copper bottles said that cost of production has gone up on the back of an increase in copper prices and not being able to raise the selling price will impact his business. Through the new rate card policy, Flipkart claimed to introduce measures like simplifying shipping costs, making fulfilment by the platform more economical but the matter of pricing restrictions was never communicated, they claimed.
Vinod Kumar, president at India SME Forum and founder trustee at Forum For Internet Retailers, Sellers and Traders (FIRST) said that several complaints have been received fromfrom Flipkart sellers. “Flipkart has responded to our query and said that the issue will be resolved in a few days. No marketplace is supposed to interfere with pricing. It is not a fair trade practice,” Kumar said.
Four sellers TOI spoke with said that Flipkart did not notify them before placing restrictions on pricing.“Flipkart cannot control the selling price of a product. Many products on the platform are now being sold below our purchase price. Sellers whose products were already stocked up at Flipkart’s warehouses had no option other than selling them at a lower price,” one of the sellers said. This sudden move by Flipkart has nudged many platform sellers to remove their listings and display an out of stock notification. “I have 1,250 product listings on Flipkart. 800-900 of them have been taken out,” added another seller.
Flipkart’s justification to sellers is that irrespective of the pricing restrictions, they are getting the same average settlement value. Average settlement value applicable for each item sold refers to the final amount a seller earns after deducting platform commission, logistics and other fees. Sellers said that a lower price listing on Flipkart will force them to change the pricing on other platforms like Amazon and Nykaa. Besides, they will face a major issue during sale events when they will have to give discount on an already lowered price, eroding their earnings. “Typically, discounts or any form of promotional scheme during festive sale events is applied on the last month’s average selling price. Since Flipkart is not allowing us to raise prices, we are already selling at a lower price and during events, we will be forced to sell at a further lower price,” a seller said.
In a statement, Flipkart said that the company is compliant with all FDI regulations and does not influence pricing. “As a homegrown e-commerce marketplace, Flipkart stands steadfast in its commitment to adapting and evolving in sync with our sellers’ requirements. The all-new, simplified rate card policy is aimed at optimising growth avenues for sellers while enhancing settlement transparency. The policy was introduced recently, and we are working closely with our sellers to drive a better understanding of the new policy and make necessary improvements. Since implementing the changes in the last couple of weeks, we’ve seen an increase in business transactions and a rise in active sellers,” a spokesperson said.
A seller said that in April, he offered a set of products at a discounted pricing to get more traction but allegedly, Flipkart has now set that pricing as the base price for the product and is not allowing him to update the price. “I was making a loss then. I want to raise the pricing now but I cannot,” the seller said. A seller selling copper bottles said that cost of production has gone up on the back of an increase in copper prices and not being able to raise the selling price will impact his business. Through the new rate card policy, Flipkart claimed to introduce measures like simplifying shipping costs, making fulfilment by the platform more economical but the matter of pricing restrictions was never communicated, they claimed.
Vinod Kumar, president at India SME Forum and founder trustee at Forum For Internet Retailers, Sellers and Traders (FIRST) said that several complaints have been received fromfrom Flipkart sellers. “Flipkart has responded to our query and said that the issue will be resolved in a few days. No marketplace is supposed to interfere with pricing. It is not a fair trade practice,” Kumar said.
