According to the FDI policy guidelines, “Marketplace style of e-commerce means providing of an information technology platform by an e-commerce entity on the digital and electronic network to do something being a facilitator between buyer and seller.”
The main feature of the Marketplace model is that the e-commerce firm, like Amazon, Flipkart, Snapdeal, etc. give a platform for purchasers to have interaction using a large number of sellers onboard to get a product or service online. Thus, whenever a product from amazon is bought, you happen to be actually purchasing it coming from a registered seller with it. As such the item is not directly sold by amazon. Here, amazon is only a website platform which facilitates a meeting location for a consumer to meets many seller and give various options and expense levels for any product or service.
Whereas the Inventory-led websites have specialized but limited product selection and also the serious customers may log in to the telltale website for any specific product selection, such as caratlane.com for precious jewellery, booknest.straight into buy books, swiggy.com for ordering food, 1mg.com for medicines etc.
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Anchor Seller and a Level Stage
The majority of the marketplace players have anchor sellers on panel, who will be either their subsidiary entities or a large enterprise that have entered into privileged deals with them which will help them offer money saving deals or discounts towards the customers. This might include a higher discount on products, Free delivery, compensation for sales returns etc. The losses incurred on these deals /services are compensated with the Marketplace Player with a pre-agreed arrangement.
You often see that some goods are positioned on the website at 40% -60% discounts that’s even hard for the manufacturer to provide. You often see that you will find 40-50 sellers for any books online but excepting one anchor seller, fat loss to provide such exciting discounts or offers. They even can mask other seller completely and corner almost entire interest in these products, thereby also frustrate these multiple genuine sellers to achieve the customers can use making use of their honest pricing offers.
Nearly all e-commerce players are stored on the verge of re-discovering their business models and desire to become profitable sooner. The reality is, none have already been able to see a penny in profit so far. Many big and promising e-commerce and unicorn players have perished because of unsustainable losses and several have already been sold-out to other people. Year 2017 would see more to fasten belts and go on to solve this riddle lest they perish within the race towards the survival from the fittest.
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