Reasons Why You Should Not Avoid Selling On Amazon

There is a reason why Amazon’s Ceo had become World’s Richest Man. We will not discuss in this blog what all factors were involved in this process, however today we will discuss on how amazon exploits the sellers and why you should not sell on amazon. Here are top Reasons Why You Should Not Sell On Amazon.

  1. High Commission Rate: Amazon recently has increased the commission rate significantly on all the products and category and is exploiting the sellers by making the seller pay even if the item is returned by the buyer. If the product is returned by buyer then that simply means the money will be refunded to the buyer and Seller will not receive anything except the product which is returned by the Buyer. Then what is the need to levy different types of Charges on Seller. Here is an example of high expensive it has become for the buyers to buy and how seller arranges its price. Cost Price of the particular Case cover is 100 rs. The seller literally has to sell it for minimum 600rs to earn minimum Profit. Let me show how amazon exploits the seller. 26% Commission is charged on case covers Plus 20rs closing Fees is charged separately and then the seller has to pay 28% GST Plus the seller has to bear the shipping charges. So if we calculate all of this a seller pays 168rs GST 156rs commission 24rs including GST on closing fees plus 75 rs on courier charge. Approx 420 rs just Goes in Giving Plus add 100rs cost price of the product that becomes 520. Obviously a seller will keep at least 10-15% Margin. Later obviously at the yearend he will have to file income Tax as well and pay some his share of earnings with government again.
  2. Implying Unfair Policy on Sellers: Amazon has made it compulsory for each and every Seller to either join their Runway Program or FBA program. In Runway Program the sellers packs the stuff and Amazon sends courier person to seller’s doorstep to pick up and dispatch the parcel to the buyer. In FBA program the sellers sends all his inventory to Amazon’s warehouse and they pack things and dispatch it. In this case the seller has no advantage to authorize return request if any return request comes. What I mean by this is there are buyers who buy the product and later they don’t want the product just like that after it gets delivered. Amazon auto authorizes the return request and forcefully charges the seller to pay one way shipping charge plus all the selling fees and closing Fees. So basically Amazon earns buyer gets refund however seller is penalized for buyers mood swing. The buyers should be penalized those charges for unwanted return request.
  3. Buyer always Win, Seller (Beggar) do not choose: Amazon when it comes to buyers is very lenient. Even if the seller sends genuine product and buyer claims he has received fake product amazon does not investigate the matter. It directly accepts buyer’s words and auto authorizes return request and then harasses the seller by asking them to submit various different types of documents like purchase bill, authorization letter stating the supplier from whom the seller has taken goods is authorized etc etc. In one of many scenarios the buyer just called amazon and said its customer care that he has received a duplicate powerbank of a particular brand. The Buyer did not return the item and asked amazon to give him the money back. Amazon without any investigation agreed to buyer’s words and bombarded on seller with multiple request to submit documents to prove that the product sent was genuine. Some Sellers are able to prove their point and some new sellers cant. So those who can’t are the ones who suffer because of 1 fake complaint. The sellers account is suspended and it takes months at times to reinstate the account if the seller is lucky. To reinstate the account seller tries all possible ways to prove the product sent was genuine. And in the end if it doesn’t work out seller approaches those company who plays a middlemen role in getting the account reinstated. This is a commission based thing. The company helps the seller reinstate the account in their own way and charge commission to the seller. Obviously those company then pay some part of that commission to amazon. This type of exploitation has led to many small scale business to close down. The buyer’s need to understand if they are cheated they can simply send return request instead of doing complaints and causing losses to business. The cheat buyer many a times ruins genuine sellers business because of his greed. And I am the witness of many such cases where my friends who had sold genuine products had video recording of products they have dispatched had proper purchase invoice and also at times had submitted authorization letter of their suppliers have their account suspended.
  4. I want money, No matter What attitude: Amazon doesn’t care if the sellers are suffering losses because of their pathetic policies all they care is how much they are earning. This is a shame we ourselves are letting them to exploit us. The Buyers many a times in greed don’t realize the seller at the end of the day suffers. And understand the seller himself is from your own country and you are making the outsider rich and pulling back your fellow countrymen. We have seen cases where the buyers are also cheated by the sellers. As a buyer if you come across such scenario put a return request and send the item back amazon will not investigate anything on you and you will get your money back. If a genuine sellers sells genuine stuff and if the cheat buyer in greed files complaint the genuine sellers are harassed brutally by amazon. They suspend the account they don’t pay the seller for 90 days and they are being asked many proves to prove that they have sold genuine product. Amazon charges a lot the sellers as we have explained you in the first point.
  5. Company integrated with Amazon: Many sellers and buyers would have come across this name. Cloudtail India Pvt Ltd is itself is a company of Amazon India. They are not charged any commission and due to that you will see them selling every product cheaper then everyone. Inspite of GST rates gone up for earphones for example earlier it was 6% VAT now it is 28% GST as per HSN 8518. Still they are able to sell stuff at same price inspite off 22% rise in Tax rate. How are they able to do this is a question for which no one has answer? Example: Sennheiser Cx180 MRP is 990 they sell it for 799 mostly. If a normal sellers sell he has to pay following charges : 28% GST plus 15% Selling Commission Plus 20Rs closing fees Plus GST on closing Fees Plus courier charge. RS 224/- is GST. Rs 120/- is commission Rs 24/- plus courier charge approx. 70rs assumingly. So basically 438 rs is the cost out of 799. We haven’t included the cost price of product yet rs 361 is left. Now as per logic what will be the cost price of a product with MRP 990 to cloudtail in Rs 361 they have to take out cost price plus Profit. So this is one way to dominate from every where.

 

It is upto you people to decide why we should avoid or continue selling on amazon. We have tried to give real time scenarios so that it is easy as a seller for you to understand.

NOTE: The example given is for illustration purpose. No offence should be taken.

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