What is the business model used by e-commerce giants like Amazon, Flipkart, eBay and Snapdeal?
Marketplace Model (seller will handle inquery, order, shipping, return etc). They will only promote their site and products.
Also Amazon and Flipkart has dual business model- Seller (they also sell products directly on their site) and Marketplace.
Almost anyone can register as a seller with these ecommerce websites. How do they manage and run this seller based model in India ? How much percentage do they charge a seller ?
Actually they charge heavy fees, currently we are selling on amazon and ebay and both charge 15 - 20% of total sale. I think Flipkart, Snapdeal and other are also charging same amount.
How do these companies manage the sellers and their products?
They have separate seller support teams, seller account managers, and excellent IT to handle seller issues.
Do they store the products in their warehouses or the products are with the sellers?
No, sellers are responsible for inventory storage. Although some marketplace allow sellers to store inventory in their warehouse but small sellers can't afford that.
If the product remains with the seller then how do they keep a track of quantity (stock) and check for out of stock?
Sellers are responsible for maintaining inventory, marketplace website provide seller admin panel to update inventory, shipping and other information.
What happens if the customer returns the product? Where does the product go then? Who bears the cost of the failed delivery?
If the customer return any product, the product will go to seller and he will bear the loss (refund). However snapdeal and some other sites ship product on behalf of seller (take from seller and deliver to customer) and in that case the marketplace website is responsible for delivery.
How do they keep track of the order?
Seller need to update shipment tracking number on his marketplace admin panel within 2 days of receiving any order.
Does the seller have an option to deliver on his own ?
Yes, 70% seller deliver on their own.
Do the sellers have to ship the products to the company's warehouse?
Depand on website, these all websites have something different from each other.
How and when do they pay the sellers?
They pay from time to time (weekly payout / monthly payout and threshold payout) through NEFT.
How do they check if the product with a seller is actually genuine ?
They have rating system based order return %, timely shipping, customer feedback, complains etc. for sellers. Practically nobody can check how genuine a product is, all they can trust Product Brand name and seller rating.