Based on the FDI policy guidelines, “Marketplace style of e-commerce means providing of your information technology platform by an e-commerce entity over a digital and electronic network to do something as being a facilitator between seller and buyer.”
The main feature of this marketplace model could be that the e-commerce firm, like Amazon, Flipkart, Snapdeal, etc. give you a platform for customers to interact with a many sellers onboard to buy a product or service online. Thus, whenever a product from amazon is bought, you’re actually purchasing it coming from a registered seller by using it. As such the product or service just isn’t directly sold by amazon. Here, amazon is only a website platform which facilitates a meeting location for a person to meets many seller and provide various options and price levels to get a products or services.
Whereas the Inventory-led websites have specialized but limited product selection and the serious customers may join to those website to get a specific product selection, such as caratlane.com for precious jewellery, booknest.in to buy books, swiggy.com for ordering food, 1mg.com for medicines etc.
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Anchor Seller and a Level Arena
Almost all of the marketplace players have anchor sellers on panel, who’re either their subsidiary entities or even a large enterprise who may have created privileged handles them which assists them offer cheap deals or discounts to the customers. This may include a higher discount on products, Free postage, compensation for sales returns etc. The losses incurred on these deals /services are compensated from the Marketplace Player within pre-agreed arrangement.
You regularly see that some items are available on the site at 40% -60% discounts that is even hard for the producer to supply. You regularly see that you’ll find 40-50 sellers to get a buy academic books but excepting one anchor seller, no one is able to supply such exciting discounts or offers. They can mask other seller completely and corner almost entire interest in the products, thereby also frustrate these multiple genuine sellers to achieve the shoppers with their honest pricing offers.
Just about all e-commerce players take presctiption the verge of re-discovering their business models and dream to become profitable sooner. The truth is, none are already capable of seeing a cent in profit so far. Many big and promising e-commerce and unicorn players have perished due to unsustainable losses and several are already sold-out to others. Year 2017 would see additional to lock belts and continue to keep solve this riddle lest they perish in the race to the survival in the fittest.
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