According to the FDI policy guidelines, “Marketplace model of e-commerce means providing of an it platform by an e-commerce entity on the digital and electronic network to act like a facilitator between buyer and seller.”
The key feature of the Marketplace model is the e-commerce firm, like Amazon, Flipkart, Snapdeal, etc. provide a platform for purchasers to activate having a many sellers onboard to buy an item online. Thus, when a product from amazon is bought, you might be actually buying it from a registered seller with it. As such the merchandise is not directly sold by amazon. Here, amazon is simply a website platform which facilitates a meeting place for a person to meets many seller and provide various options and value levels for a product or service.
Whereas the Inventory-led websites have specialized but limited product selection and the serious customers may log in about bat roosting website for 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 plus a Level Arena
A lot of the marketplace players have anchor sellers on panel, who are either their subsidiary entities or a large enterprise that have entered into privileged relates to them which will help them offer bargains or discounts for the customers. This will likely include a higher discount on products, Free postage, compensation for sales returns etc. The losses incurred on these deals /services are compensated by the Marketplace Player under a pre-agreed arrangement.
You often find that some merchandise is positioned on the website at 40% -60% discounts that’s even a hardship on the maker to provide. You often find that you’ll find 40-50 sellers for a buy comic books but excepting one anchor seller, fat loss to provide such exciting discounts or offers. They even mask other seller completely and corner almost entire requirement for they, thereby also frustrate these multiple genuine sellers to arrive at the shoppers making use of their honest pricing offers.
Virtually all e-commerce players take presctiption the verge of re-discovering their business models and aspire to become profitable sooner. The truth is, none have already been able to see a cent in profit thus far. Many big and promising e-commerce and unicorn players have perished because of unsustainable losses and lots of have already been sold-out to others. Year 2017 would see many more to lock belts and continue to keep solve this riddle lest they perish in the race for the survival of the fittest.
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