Let me start with an example. Last week I wanted to order a basic white shirt online. On Flipkart, the cheapest available option was INR 650, on amazon, it was INR 800 and on club factory, the same quality and make was available for INR 400.
But why? How do you think prices are set?
When a company sets a price on a product, multiple factors come into play other than the cost of making of the product.
Sometimes, a fixed monthly subscription is paid by the registered sellers to host their products on the website. In some cases the company also charges a fixed closing fee like 10 for every sale.The other factor that affects pricing is commission. A commission that sellers are charged for being able to sell on an e-commerce platform which is usually a fixed percentage of their sales or net sales value.
With these commissions slowly but steadily increasing over time and the e-commerce companies also aiming to move towards profitability, the sellers have been finding it difficult to keep up with it. Since most of their earnings go in paying commissions and a fixed price to the E-commerce giant, the sellers are left with little to no profits.
How does this affect us, the buyers?
Simple. Everyone is in the business to make money. The sellers end up marking up the price of their merchandise in order to make profit, but this results in the buyer spending way more than the actual cost. The sellers have no choice but to pass on some of the resulting cost to the consumers.
So, what can we, the buyers do?
There are only two ways to work around commissions, one is to sell on unique platforms like personalised websites but not all sellers have the same traction as these already established e-commerce platforms.
The other is to look at platforms that are working on bridging this gap between us and good-quality products. One such website is Club Factory. Club Factory does not charge any commission fee from its sellers, which allows them to sell at lower price points than its competition. The sellers are able to transfer the benefit of no-commission to the consumers, resulting in low priced products and higher conversions.
This is the policy that more platforms should take note of and adapt in order to not only hold on to their prime sellers about also to keep their loyal customers happy as they save money and look fashionable at the same time. So when platforms don’t depend on taking commissions from their sellers, the buyers get low priced deals and Club Factory is paving way for this.