What does Flipkart shutting down Smart fulfilment mean for sellers?

Flipkart stated in an email to merchants on May 3rd, “To help you in reducing your cost of doing business and improving your order processing experience, we are discontinuing SMART Fulfilment.

If you are a seller you have two fulfilment options with every e-commerce platform: marketplace fulfilment and seller fulfilment. Flipkart offered the same and started a model that could give sellers the best of both.

Flipkart’s three fulfilments are:

Seller Fulfilment

Under seller fulfilment, you pack your orders an E-kart representative would retrieve the shipment from you and deliver it to the appropriate consumer.

Seller fulfilment is the default fulfilment type on Flipkart. As a Flipkart seller, you have to manually process, and package your orders for dispatch. Flipkart will only take care of logistics and returns.

Flipkart Fulfilment

Also known as Flipkart Assured Fulfilment. When you opt-in for Flipkart fulfilment, your inventory will be picked up and shifted to the Flipkart warehouse by Flipkart logistic team. From there onwards, Flipkart will take of the entire process that includes the following:

• Order Processing
• Order Packaging
• Product Dispatch
• Product Delivery
• Return (if any)

Smart Fulfilment

Flipkart smart fulfilment, also known as Flipkart lite, is regarded as one of the most effective kinds of fulfilment in the marketplace. It has the best of the two fulfilments.  In terms of features and offers, it is identical to Flipkart Fulfilment. The sole distinction between the two is that Flipkart fulfilment needs inventory to be moved to the Flipkart warehouse, whereas Smart fulfilment keeps inventory at the seller warehouse.

Flipkart’s SMART Fulfillment, which was launched in December 2019 to bridge the gap between merchant and seller fulfilments barely made it 3 years.

To learn more, read: Flipkart to discontinue its seller service, Smart Fulfillment

Now that Smart Fulfilment is being shut down, sellers have the original two options: Flipkart Fulfillment or Seller Fulfilment. Which one is right for you?

Flipkart Fulfilment vs Seller Fulfilment

Flipkart Fulfilment

• Customers trust products that have the f-Assured tag.
• Visibility on the app is quite high. Which ultimately leads to more orders and more revenue.
• Less hustle and low accountability of the seller.
• Restrictions on the max weight and size of the product.
• Sometimes sellers end up paying more than the actual value as the courier charges are calculated based on the actual or volumetric weight, whichever is higher.
• Sellers have raised disputes over late or no pickup resulting in late delivery or order cancellations.
• Low control over the warehousing conditions.

Seller Fulfilment

• Full control over how products are being stored and packed.
• Cost-effective if your business is small or you are just starting out.
• Low or minimal charges like ‘pick and pack fee’ and warehousing.
• Visibility in the marketplace is low.
• A warehouse is required.

For the majority of sellers, the benefits of Flipkart Fulfilment outweigh the disadvantages as well as the benefits of Seller-Fulfilment. In a crowded marketplace, if an ‘f-Assured’ which will now be called ‘f-Plus’ can tag get you top-ranked and recognised, everything else pales in comparison. Not to mention the extra benefits of COD, reverse pickup, and customer service.

“After several hits and misses, now I only buy products fulfilled by e-commerce sites themselves, especially for high-end products and prepaid orders. It’s risky to trust sellers that don’t have the tag (f-Assured),” shared Rakesh B, a regular online buyer.

But it’s not for everyone. If a seller has a small business, an established brand, or speciality products such as rare imported items, memorabilia, and collectables, seller fulfilment is the best option for them.

Toy enthusiast Mehul S stated, “In the past few months, I bought many collectable action figures that were seller fulfilled and not Amazon fulfilled. But I made sure to read every feedback and scan through ratings and history before clicking on Buy.”

Order processing is surely a time-consuming task and, if not done correctly, will have an impact on your ratings and future sales. If accountability can be transferred to the e-commerce site, a seller should strongly examine it. After all, e-commerce firms don’t want to tarnish their reputation by providing poor service. Not many sellers would agree to the same. “I will end up paying Rs 4-5 extra per order from now on for renting space in Flipkart’s warehouse and their other services. For sellers moving small shipment volumes, that won’t be helpful,” said one of the sellers to ET.

What if there is a third option?

This is a story of one of the biggest electronic sellers on Amazon and Flipkart and when they decided to switch from e-commerce giants to their own website and app as covid forced markets to lockdown.

Markets were closed, people were afraid to get out, and everything was bought online, Grabgear.in started to sell online on their website and app. They didn’t have much brand value but they offered products at unbeatable prices. They can easily beat the prices of Flipkart and Amazon by 10% approx as they don’t have to pay anyone listing or other charges.

Markets were closed, people were afraid to get out, and everything was bought online, Grabgear.in started to sell online on their website and app. They didn’t have much brand value but they offered products at unbeatable prices. They can easily beat the prices of Flipkart and Amazon by 10% approx as they don’t have to pay anyone listing or other charges.

This strategy can and should be opted for by every business. Big players can leave you high and dry at their will and at that time you may not be able to stand on your feet.

Moreover, E-commerce is going towards a monopoly (monopolistic in best case scenario), as the government is trying to put an end to Amazon India, and the majority of emerging platforms like Nykaa, Tata 1mg or Makemytrip work on a niche. Even Tata Neu which could compete with Flipkart is offering only Tata products. Shopclues and Jio Mall are far behind in the race, and Paytm is on the verge of extinction.

Now if the case arises when Flipkart is the only big player, do you really think they will have the seller’s best interests in their minds?

The majority of successful entrepreneurs suggest that approaching recession is the best time to start a business. Grabgear proved it in the worst of times.

I would suggest you consider this option as it is the only one that actually offers you growth. E-commerce giants can increase your revenue but can’t offer you growth in terms of brand value.

If you are ready to explore this option, you can learn more about starting your online store. You can also explore Yelo which can help you build a brand and grow organically.