Merchant is King: Ecommerce democratizes Distribution & Brand Creation


In India, more than 40% people are engaged in trade in some form or the other, typically as suppliers or owners of small and medium businesses. These merchants would never dream of creating a brand of their own by rationalizing the distribution channel. E-commerce is now fueling hope and ambition in them.

Krishnarao, a merchant from Aurangabad, shares the same belief while he searches for new suppliers on the Internet and sell his brand called RugBasket directly to customers through online marketplaces. From selling merely 20-25 rugs per day, his business now has 300-350 rugs flying off the virtual shelves to customers in all corners of the country. Since his overheads are significantly reduced, he is able to offer very attractive prices and profits from the volume of business he gets online. His brand has its loyal customer whom he’s never met, but engages regularly with for feedback, popular trends and new ideas.

The Modern eShopkeeper

  • In India, e-commerce is the marriage of convenience between age-old economics and new-age technology.
  • The impact of the Internet Revolution on traders in an unorganized Indian market, is even more significant than in a Western paradigm.
  •  It has empowered traditional merchants to explore new territories, and enabled professionals to venture into trade.
  • Internet is a great leveler – it puts SMEs at par with the mighty corporate brands that have deep pockets and heavy-duty marketing machinery.

Marketplace Mantra

  • In the virtual world, there is no geography. Without the liberty to attract customers by building fancy showrooms, or running promotions in the local catchment area – the platform you choose to sell from largely determines the success of your online business.
  • Merchants who prefer to set up their own e-commerce site often find it a challenge to attract traffic, manage logistics, collect payments or provide customer service. But an Online Marketplace can easily take on these tasks if a merchant chooses to sell on its platform.
  • The marketplace itself does not stock inventory, or issue invoices or bears a Sales Tax registration – it simply connects the seller to the buyer.
  • Without any upfront or recurring costs, merchants get access to millions of customers. Sellers can create their own branded stores and manage upload, pricing to promotions for the listed products.
  •  Merchants have the freedom to run their online business just as they like, while the marketplace defines the hygiene factors for healthy trade.

Seller not Supplier

  • While customer traffic is a sound indicator of a good e-commerce site, merchants must also be sure that its marketplace dynamics are in alignment.
  • This includes its selling fee and payment terms for merchants, its rate of returns which can be a dampener for any business, and also how much say the merchant has in dispute resolution.

The promise of e-commerce is best fulfilled when sellers are empowered to offer a large assortment of products at competitive rates to buyers

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