Merchant is King: Ecommerce democratizes Distribution & Brand Creation


Merchant is King: Ecommerce democratizes Distribution & Brand Creation

A regular day in the life of Krishnarao meant managing his small rug shop tucked away in the bylanes of Gul Mandi in Aurangabad. This meant sourcing new items and negotiating prices with vendors; haggling whole day with customers; routine book-keeping; and an occasional visit to the emporium nearby to check latest designs. And he thought this would go on forever, just the way it did for two generations before him. Until the day when his tech-savvy cousin introduced him to the world of online commerce.Online Buying ecommerce<

Ecommerce has opened the floodgate of opportunity for millions of merchants like Krishnarao. In India, more than 40% people are engaged in trade in some form or the other, typically as suppliers or owners of small and medium businesses.These merchants would never dream of creating a brand of their own by rationalizing the distribution channel. Ecommerce is now fuelling hope…and ambition in them.

Krishnarao now rides pillion with his nephew on the ecommerce highway. Together, they ssearch for new suppliers on the Internet and sell their brand called RugBasket directly to customers through online marketplaces. From selling merely 20-25 rugs per day, his business now has 300-350 rugs flying off the virtual shelves to customers in all corners of the country. Since his overheads are significantly reduced, he is able to offer very attractive prices and profits from the volume of business he gets online. His brand has its loyal customer whom he’s never met, but engages regularly with for feedback, popular trends and new ideas.

The Modern eShopkeeper

In India, e-commerce is the marriage of convenience between age-old economics and new-age technology. The impact of the Internet Revolution on traders in an unorganised market like ours, is even more significant than in a Western paradigm. So, on hand, it has empowered traditional merchants to explore new territories, and enabled professionals like Krishnarao’s nephew to venture into trade. The e-shopkeeper is a new breed of ambitious, aggressive individuals or teams. For them, the Internet is a great leveler – it puts them at par with the mighty corporate brands that have deep pockets and heavy-duty marketing machinery.

Marketplace Mantra

In the virtual world, there is no geography. Without the liberty to attract customers by building fancy showrooms, or running promotions in the local catchment area – the platform you choose to sell from largely determines the success of your online business. Merchants who prefer to set up their own e-commerce site often find it a challenge to attract traffic, manage logistics, collect payments or provide customer service. But an Online Marketplace can easily take on these tasks if a merchant chooses to sell on its platform. So, the marketplace itself does not stock inventory, or issue invoices or bears a Sales Tax registration – it simply connects the seller to the buyer. Without any upfront or recurring costs, merchants get access to millions of customers. Sellers can create their own branded stores and manage upload, pricing to promotions for the listed products. Merchants have the freedom to run their online business just as they like, while the marketplace defines the hygiene factors for healthy trade.

Seller not Supplier

Before a merchant decides to register on a portal, it is important to know how much autonomy he gets to run his business. As a service provider, the marketplace must only facilitate transactions between sellers and value-seeking buyers, while respecting their individual roles. So a seller must have complete control over his store and sales. The marketplace can guide and advise, but never dictate the terms of business. By employing the right technology, online marketplaces can enable merchants to manage their online stores anytime, anywhere and on any device. While customer traffic is a sound indicator of a good e-commerce site, merchants must also be sure that its marketplace dynamics are in alignment. This includes its selling fee and payment terms for merchants, its rate of returns which can be a dampener for any business, and also how much say the merchant has in dispute resolution.

The promise of e-commerce is best fulfilled when sellers are empowered to offer a large assortment of products at competitive rates to buyers. They only need to discover an online platform that has strong traction and true marketplace dynamics, which gives the reigns in the hands of the merchants and the market at their feet.

[About the Author: Devesh Rai G is the Corporate Vice President – Business Development at ShopClues, an online marketplace.]

Recommended Read: Compared: Online Marketplaces in India

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