Flipkart sellers up in arms over returns policy, threaten to quit

The move comes after Flipkart decided to pass on shipping costs to its sellers, including charging them for reverse logistics

Sellers on Flipkart, the country’s largest e-commerce marketplace, have raised red flags about the company’s new return policy, saying they would stop selling goods on the platform if the issue isn’t resolved.

Flipkart has a flexible return policy. Under the new one, the company has also reduced the period for returns on electronics, smartphones and books from 30 days to 10 days.

Flipkart, which rejigged its commissions model for sellers last week, has also decided to pass on shipping costs to its sellers, including charging them for reverse logistics. Sellers have said the move, to be effective June 20, will increase their cost of doing business on the platform to unsustainable levels. Flipkart has pegged charges at Rs 187.5 for each shipment that a customer returns to a seller.

“This will kill our business. If a person buys a Rs 500 product and returns it, the seller makes losses. It is not in the interest of the seller to sell goods on Flipkart,” said Sanjay Thakur, president of eSellerSuraksha.  “If the vendor has to survive, he has to increase the rates, which means buyers would move to other portals.”

“They are a virtual mall. Every mall has to depend on shopkeepers. If the sellers are not there, buyers are also not there,” says Thakur, who says the vendor base gets an unfair deal from Flipkart. “If it is unsustainable to sell on Flipkart, we stop doing business on the platform and can look at other options such as Amazon.”

Eseller Suraksha, which claims to have a fifth of the active vendor base at Flipkart, says that commissions on the online portal is higher than competing firms.

Flipkart claims it has a customer base of over 75 million, including 50 million of them using its app on their smartphones to buy goods such as mobile phones, garments and television sets.

The latest outburst from sellers comes at a time when Flipkart is facing intense competition from Amazon, which has taken its total commitment in India to $5 billion. While, Flipkart under pressure to improve its business profitability is finding new ways to earn revenue and cut losses, Amazon can underwrite costs - incur losses on returns and improve commissions for vendors till it bridges the gap with the Indian company.