This experience was shared by one of our seller partners . However the discount amount was beared by the marketplace and the seller did not have to shell out anything from his pocket for the offer. The new e-commerce policies will put an end to these discounts, cashback and coupons offered by the marketplaces. Well as a result both – the online seller as well as the online buyer will get affected.

Lets have a look below at some of the major points in the latest Guidelines for FDI in E-commerce by Department of Industrial Policy & Promotion (DIPP) and what it means for the marketplace sellers:

1. E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain level maintaining field.

This is where the discounting era may end, unless there is a change of policy or the marketplaces discover a few loopholes in the system. This will bring some correction to the sales generated on the big promotional days and offers on marketplaces, as the marketplaces can’t burn their investors money any more on influencing the prices in any way.

2. An e-commerce entity will not permit more than 25% of the sales affected through its marketplace from one vendor or their group of companies.

Some of the e-commerce entities drive sales of more than 25% currently to one of their group of companies. This may limit the monopoly of these sellers across categories. But yes, if marketplaces can work around  this policy to create multiple independent vendors and control them needs to be seen.

3. 100% FDI under automatic route is permitted in marketplace model of e-commerce.

This may not make much of a difference as marketplaces have been able to raise money from outside India and marketplaces like ebay and amazon have been able to enter the Indian markets.

The e-commerce industry will surely fight it out with some news of an association to protest against the DIPP policies.  If the government will rethink on the policies is yet to be seen.

But if the policies are to remain the same, there will be a major shift in the business strategies of the marketplaces and how this affects the Commission Rates, Shipping Rates, Other Services and Big Discount Days  remains to be seen.

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Registration requires providing details of the seller and submitting the required documents. Below are a list of documents and information that will be required if you are planning to sell on all the major marketplaces.

VAT Number and Certificate

Bank Account Details ( For some marketplaces Current Account is mandatory)

Cancelled Cheque

PAN Card (PAN should be in the name of business except in case of sole propreitorship)

Address Proof

Some categories on certain marketplaces require Brand Approval and Category Approval. In Such Cases, Trademark certificate OR proof of brand ownership has to be submitted as per the marketplace policies.

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