Based on the FDI policy guidelines, “Marketplace model of e-commerce means providing of your information technology platform by an e-commerce entity on a digital and electronic network to do something as being a facilitator between buyer and seller.”
The key feature of the Marketplace model is that the e-commerce firm, like Amazon, Flipkart, Snapdeal, etc. supply a platform for patrons to interact using a large numbers of sellers onboard to purchase something online. Thus, each time a product from amazon is bought, you’re actually acquiring it coming from a registered seller by it. Consequently the product isn’t directly sold by amazon. Here, amazon is simply website platform which facilitates a meeting area for a consumer to meets numerous seller and give various options and cost levels to get a services or products.
Whereas the Inventory-led websites have specialized but limited selection and also the serious customers may sign in to those website to get a specific selection, for example caratlane.com for precious jewellery, booknest.directly into buy books, swiggy.com for ordering food, 1mg.com for medicines etc.
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Anchor Seller plus a Level Playing field
The majority of the marketplace players have anchor sellers on panel, that are either their subsidiary entities or even a large enterprise who’ve applied for privileged handles them which will help them offer bargains or discounts on the customers. This may include a higher discount on products, Free freight, compensation for sales returns etc. The losses incurred on these deals /services are compensated through the Marketplace Player within a pre-agreed arrangement.
It’s easy to find that some products are positioned on your website at 40% -60% discounts which can be even challenging for producer to provide. It’s easy to find that there are 40-50 sellers to get a buy books online Hyderabad but excepting one anchor seller, no one is able to provide such exciting discounts or offers. They even can mask other seller completely and corner almost entire demand for these items, thereby also frustrate these multiple genuine sellers to achieve the customers using their honest pricing offers.
Nearly all e-commerce players are saved to the verge of re-discovering their business models and aspire to become profitable sooner. The reality is, none are already capable of seeing anything at all in profit to date. Many big and promising e-commerce and unicorn players have perished as a result of unsustainable losses and several are already soldout to others. Year 2017 would see many more to fasten belts and go on to solve this riddle lest they perish in the race on the survival from the fittest.
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