E commerce full notes

A STUDY ON
ANALYSIS OF ECOMMERCE BUSINESS
Chhatrapati Shahu Ji Maharaj University, Kanpur
Master of Business Administration
(Finance and Control)
Batch-2017-19
Under the Guidance of submitted by
Mr. Sachin Sharma Rajesh Babu Katiyar
Assistant professor Roll no-7131038
Institute of Business Management

Contains
I. Plastic money and crypto currency.
II. People attracting toward ecommerce trend.
III. General household spend on ecommerce & percentage of his earning.
IV. Categories and sub categories of product(each-5) sold in ecommerce.
V. Active sites in INDIA write paragraph about ecommerce.
VI. In ecommerce business legal productshould be follow.
VII. Revenue plan we should follow (the sources).
VIII. Ecommerce site inter into agreement with its vendor.
IX. Ecommerce site provide goods for customer at the respected address.
X. Ecommerce company maintain supply chain.
XI. Kind of agreement signed between the ecommerce sites and the bank which
collect payment on behalf of ecommerce site.
XII. Kind of policies are claimed by ecommerce site to attract customer.
XIII. Ecommerce site handle request for purchase return and refund.
XIV. Kind of technical infrastructure ( both hardware and software) require by
ecommerce site for carrying on their business.
XV. Kind of organization hierarchy is maintain while carrying on ecommerce
business.
XVI. Various designation and loans associate with ecommerce site.
XVII. Capital investment required to start commerce business.
XVIII. Start the various head in which money will be spent and the amount spend in
each head.
PLASTIC MONEY

All debit cards, credit cards, forex cards ,prepaid cash cards,store cards which use in place of
bank notes or actual currency for promoting digital transaction is known as plastic currency . this
currency is made of plastic or polymer form .this currency is highly durable and lasting in nature
. it can not be easily destroyed . on this card their is a description of special feature or character
which is encrypted in latest electronically and magnetic pattern.
Crypto currency

A cryptocurrency is a digital or virtual currency designed to work as a medium of
exchange. It uses cryptography to secure and verify transactions as well as to control
the creation of new units of a particular cryptocurrency. Essentially, cryptocurrencies are
limited entries in a database that no one can change unless specific conditions are
fulfilled.
People attracting toward ecommerce trend

Millennials: The people approaching their adulthood in 2000s are knows as Millennials
or the Generation Y. As per research by the Berkley Research Group, the Gen Y market
has dramatically reached a market of US$200 billion! It the greatest spending
generation! But since they are keen to learn more on the internet, they’re very aware of
the latest trends. They’re hard to woo, but nobody said it’s impossible.
To get them into the game, following are seven intriguing business strategies to follow
to stay competitive.
1. Buying Online, Picking Offline
According to a survey conducted in the US, it was found out that a whopping 88% of
millennials would prefer making a purchase online and then picking it up at the store,
instead of getting it shipped to their places. Why? It saves money.
This information can be used to attract more customers! How? Offer discounts if the
customer chooses to buy online, pick up at the store. This would save you from the
handling charges and the shipping costs.
2. Refunds over Discounts
It was observed that the majority of millennials would prefer a refund/cashback on
heavy electronics instead of competitive discounts. This gives them the illusion that they
made money after purchasing something and allows them to spend that “earned”
money on shopping even more.
Getting your store associated with payment wallets like Paytm, Mobikwik, etc. could
attract more business, as most consumers are using these online wallets to make
purchases easier.
3. Obsession with the word “Free”
The present generation is clearly going gaga over free stuff. Whether it is a small gift, a
coupon, a book, whichever! Providing something free on an order can attract quite a lot
of millennials. Free shipping is the best option. Attractive discounts or free gifts on a
certain amount spent would definitely catch their attention.
4. Product Videos
Generation Y has got itself so engrossed in the digital world that they have lost the
ability to sit back and read for a while. Having an elaborated product video that explains
the key features and hidden meanings of the product offered will clearly attract more
traffic than a lengthy product description. Videos make them see and imagine better. It
takes away the element of doubt by clearly offering to show the exact same product that
the customer will get in their hands once they open the box.
5. Social Media

It is a no-brainer that more than half of the population today is obsessed with social
media. It is anticipated that the number of social media users would reach 2.5 billion in
2018. Social Media Marketing has had huge impacts on customers. 57% of the
usershave confessed that the reviews and comments on a product from people on
social platforms influence them to make decisions. When it comes to millennials, they
say that social media is their most preferred platform when it comes to online shopping
or e-commerce markets.
Also, Instagram was said to bring more business than any other social media websites.
Perhaps because of its heavy user base and the utterly catchy and attractive
photographs, Instagram has been able to woo customers into buying more fashion
related products online. Get in touch with someone who has a good number of followers
and pitch them to advertise your product on Instagram. It sure would bring some good
business to the plate.
6. Mobile Applications
Smartphone users are expected to hit the 1 billion mark in 2018, following the previous
year statistics. Going mobile will reach out to more customers because the new and the
upcoming generation is the “phone” generation. Instead of spending more time on
bigger screens, they feel that a smartphone is better as it is compact and easier to use.
Creating user-friendly apps and providing special app discounts would bring more
customers to your store, thus increasing your overall business.
7. Easy on the Eyes
One thing that millennials struggle the most with is the search option. Make sure that
your algorithms make it easy for the customer to search for exactly what they want. A
recent example that has pissed most people is the fact that they see something
appealing on a social media website and click on it in hopes to get more details and
eventually purchase it. But when they do click on it, they are directed to the main
website and now they have to actually search for the product that they first saw. This
gets irritating because if they type the related keywords in the search box, a thousand
results pop up. Disheartened and annoyed, they leave without even grabbing a second
look. This is something that e-commerce websites have a huge scope to work on.
Conclusion
Millennials are fickle-minded and easily influenced people, which make it hard for them
to stick and be loyal to the same retailer. But then again, with a few tactics like the ones
mentioned above, one can easily convert the Gen Y and lure them into buying stuff
online. Stay competent in 2018 and keep struggling to get big in the market!
General household spend on ecommerce & percentage of his earning

For private consumers around the globe the most well-known form of e-commerce falls into the
business to consumer (B2C) category, which includes online retail or online shopping. It refers
to online purchases from bricks-and-mortar retailers, such as Walmart, as well as from web-only
online retailing corporations such as Amazon.com (biggest online retailer) or Rakuten. In 2017,
an estimated 1.66 billion people worldwide purchase goods online. During the same year, global
e-retail sales amounted to 2.3 trillion U.S. dollars and projections show a growth of up to 4.48
trillion U.S. dollars by 2021. In Asia Pacific, e-retail sales accounted for 12.1 percent of retail
salesin 2016 but only for 1.8 percent of retail sales in the Middle East and Africa.
In recent years, mobile shopping has been on the rise, with customers increasingly using their
mobile devices for various online shopping activities. According to a March 2016 study
regarding mobile shopping penetration worldwide, 46 percent of internet users in the Asia
Pacific region and 28 percent of those in North America had purchased products via a mobile
device, whether smartphone or tablet computer. As of the third quarter of 2017, desktop PCs
still accounted for the majority of global e-retail orders but smartphones were the number one
device in terms of retail website visits. During a 2017 survey, 11 percent of online shoppers
stated that they shopped online via smartphone on a weekly basis.
The average online shopping and purchase intention rates among online shoppers also vary
strongly by product category - a total of 53 percent of online shoppers had purchased books or
music online in the past 12 months but only five percent of shoppers had bought artwork online.
The average number of annual online transactions per capita is also not uniform - Asian
shoppers made an average of 22.1 online transactions whereas shoppers in Latin America
online made 9.2 e-retail purchases.
Amazon.com is one of the most popular and well-known example of an online shopping
platform. Founded in 1995, the Seattle-based site started out as an online bookstore, but soon
began expanding its product range towards other retail goods and consumer electronics. The
online company consistently ranks among the top ten leading retailers worldwide - online and
offline.

Categories and sub categories of product (each-5) sold in ecommerce
Super categories categories Sub-categories
electronics Audio and video
Ipod and mp3player
Dvd and blue ray projector
Projector
Audio accessories
Video accessories
Tv
Full hd tv
Ultra hd tv
Smart tv
DTH service
Streaming media player
Large appliance
airconditions
Coolers
fans
Washing machine
refrigerators
Small appliances
Microwaves
Vacume cleaner
Air purifier
Irons
Landline phones
Grooming appliances
Trimmers
Savers
Hair dryers
Fashion Men’s fashion
Clothing
Tees corner
Shoes
Men accessories
Watch’s
Women’s fashion
Ethnic wear
Western wear
Handbags & clutches
Fragrances
Desiner studio

jewellery Silver jewellery
Gold coins
Pricious
Fashion jewellary
American diamond
Bags and luggage Backpacks
Laptop bags
Suitcases
Travel bags
Gym bags
Home and living Kichenware Cookware
Kitchen tools
Dining and serving
Microwave cooking
Bakeware
Home furnishing Bed linen
Blanket and quuilts
Mattresses
Sofa covers
Baths
Furniture Living room
Bedroom
Chairs
Table and desks
Dining sets and bars
Home appliances Vacuume cleaner
Security systems
Dishwashers
Sewing machine
Air purifiers
Kichen appliances Water purifiers
Induction
Juicer mixer grinder
Chimneys
Gas stoves
Daily need Buity Eyes
Lips
Nails
Makeup removers
tools

Personal care Oral care
Skin care
Hair care
Bath and shower
Mens grooming
Food and gourmet Tea & coffee
Dry food & nuts
Noodles
Biscuits &snacks
Jams & honey
Health monitoring
devices
Bp monitoring
Diabetic care
Body fat anlyser
Thermometer
Weight meter
Baby care Bedding
Bath skin
Baby food
Diapers
Moms & maternity
Baby & kids Clothing Frocks
Bottom wear
Jeans and top
Ethenic wear
Baby gift
accessories Wallets
Umbrellas
Belts
Hatsand caps
Socks
more
Toys and games Soft toys
Electronic toys
Education toys
Bicycle
Outdoor sportsride on
Stationery Pens
Calculator
Schools
Lab equipment
Greeting card
Art and crafts

Active sites in INDIA write paragraph about ecommerce
Internet, E-Commerce, Daily Deals, and Click-n-Mortar are all terms that are present
in our daily vocabularies today. But, try mentioning these words to your great
grandparents and they will probably give you a quizzical look, as it means nothing to
them. The world as we know it today has changed and evolved from the world we
knew ten years ago.
Now, someone sitting in Australia buys “cool things” from a daily deal site in New
Zealand which sources its products from China that are made by people from the
Philippines and gets it delivered to her doorstep without her having to step out of her
fuzzy slippers. If you think this was possible before ‘e-commerce’ came into our lives
– think again!
So what is this magical term e-commerce that lets us buy things from all around the
world simply through the magical portal called the Internet? How did it come into
being and importantly how big is it really today in India?
Put simply, e-commerce is the term used for buying and selling goods and services
through the Internet.
The first form of e-commerce started in the 1970s when it was used by businesses
to send commercial documents such as purchase orders or invoices electronically.
However, it wasn’t until 1990 when the World Wide Web was introduced and it took
another four years until advances such as online banking and the opening of an
online pizza shop by Pizza Hut in USA took place. During this time (1994) Netscape
introduced secure encryption of data transferred online which gave birth to Amazon
in 1995 and E-bay in 1996 in the United States.
However, in India, e-commerce did not really pick up steam until much later. In fact,
in India online shopping only gained in popularity post the dot com bubble bust in
2000. In the past 12 years, online shopping within India has developed and evolved
to a great extent. E-commerce in India has gone from having a few online buyers
that were hesitant to buy even small ticket items despite having credit cards, to a
thriving community of customers that are comfortable buying a wide range of items
online and do so without owning any form of credit at all

Amezon india
Top of the lot is Amazon India, beating all other ecommerce
websites, as per SimilarWeb. Amazon launched its India website
in 2013, six years after Flipkart. A mean fight ensued, complete
with mega ad spending, localization, and billion dollar checks

on both ends. Amazon, however, seems to be winning the
desktop war.
SimilarWeb rank in India: #6, with 90.30 million desktop visits
in December
Flipkart –
The king of Indian ecommerce holds second place in website
popularity. Flipkart insists that is because it is pushing more
towards app transactions, where the company beats Amazon.
Many industry analysts, however, think while mobile commerce

is the way to the future, it is too early to discount website
business. Flipkart, valued at around US$15 billion, leads the
ecommerce pack in the country, but is under pressure to
maintain that lead as Amazon nips in.
in December
Snapdeal –
The self professed online Walmart of India, Softbank-backed
Snapdeal takes the third spot. Founder and CEO Kunal Bahl has
repeatedlysaid he is building the company modelled after
Alibaba, calling Snapdeal a “technology platform that brings

sellers and buyers together,”rather than an ecommerce site.
Now, Indian laws make it mandatory for most ecommerce sites
to operate as marketplaces, so that doesn’t make much of a
difference. Bahl, however, has an uphill task at hand, matching
Amazon India and Flipkart’s mega budgets and massive leads.
SimilarWeb rank in India: #19, with 44.40 million desktop
visits in December
Alibaba –
Surprised? Don’t be. Alibaba does not have an Indian website,
and one does not see ads asking Indians to buy on Alibaba, but
customers here have long discovered the benefits of getting

electronics and bulk purchases done on this online megastore.
Shipping via Aliexpress is gaining popularity as well.
SimilarWeb rank in India: [India ranks and visit numbers not
available.]
Ebay –
Once talked of in the same breath as Amazon, Ebay has quietly
slipped in rung across the world, including in India. Travails at
home have hit Ebay’s performance in India, but the company

now manages to cling to the fifth spot. That’s ahead of Jabong,
though.
visits in December
Jabong –
The other troubled ecommerce player in the country, online
clothes store Jabong, ranks below Ebay in the popularity charts.
Once caught up in management changes and other problems,

Jabong now seems to have found its balance. It is, however, still
lagging behind rival Myntra in the sector. Myntra does not have
a transactional website, so it’s not featured on this list.
SimilarWeb rank in India: #34, with 68.10 million desktop and
mobile visits in December
Shopclues---
India’s latest entrant to the unicorn club, Shopclues patiently
worked its way up to the top by focussing on daily household
needs while Flipkart and Amazon were busy selling mobile

phones and other electronics. Steadfastly profit-oriented,
Shopclues is expected to become profitable with IPO in 2017.
That is even before Flipkart, India’s largest ecommerce player,
is eyeing going public.
visits in December
Olx—
Listing website OLX is a rival to Quikr, and India’s answer to
the popular Craigslist. OLX India came online in 2007 and has

quickly become popular for buying and selling pre-owned cars,
books, and even real estate.
SimilarWeb rank in India: #41, with 13.30 million desktop and
mobile visits in December

Quikr—
Another Craigslist-inspired site, and OLX’s rival. Quikr has
been growing fast, and recently bought CommonFloor to boost
its real estate listings. It has so far raised US$346 million from
10 investors, including Tiger Global, Matrix Partners, Warburg
Pincus, and Norwest Venture Partners (NVP). The company,
founded in Mumbai by Pranay Chulet and Jiby Thomas, started
as a classifieds portal in Mumbai and then shifted its base to
Bangalore in December 2014.
in December

In ecommerce business legal product should be follow
Whether you're starting a brand new business or you're an established company,
taking your business online is a fantastic and exciting growth opportunity.
However, with all of the advantages an online business brings, there are also some
complex legal issues that go along with them. Different countries have different
laws and knowing which ones apply to you is critical. In addition to the large
variety of laws to take into account, you must remember that the law is fluid and
subject to change. In order to reap the rewards that a successfulonline store can
bring, it's important to stay informed and protect yourself and your business.
The Legal Guide to Ecommerce is a resource that outlines some common legal
issues and considerations related to online businesses. Pleasenote that these
guides are for informational purposes only, and do not constitute legaladvice.
Please consultindependent legal advice for information specific to your
country and circumstance.
Taxes
Whether money is received througha payment gatewayor a brick and mortar payment
system like Cashon Delivery, compliance withanyand all tax liabilities is needed.
A content based site needs to pay income tax on the revenues it makes out of advertising but
does not need to pay service tax. Until the Goods and Services Tax regime comes into force
in India, service providers inmany sectors will have to pay tax on the services renderedby
them. The Government of India has been planning to come up with a ‘negative list’of
services for some time now, where the services onthat list are not subject to tax; i.e. all other
services are. That will really simplifythe process of findingout whether you have to pay
service tax or not. Apart from income and service tax, many states have other state-specific
taxes that you will have to pay, like ProfessionTax in states like Karnataka.
Intellectual PropertyProtection
If any content or a logo/design is used, it is very important to get the necessary Intellectual
Property rights protection. It is very easy to copy a logo from a website, and unless one takes
precautions, the business will have no effective remedy if someone copies it later. The process of
protecting your logo is done by filing for a trademark. Read more on trademark search &
registration.

Revenue plan by ecommerce company
Financial Plan
The statements incorporate two rounds of venture capital investments of $2.6 million
total, plus access to additional $1.4 million for cash flow purposes. The statements do
not include any funds raised during the proposed IPO. Any revenues from advertising,
affinity, consulting, and partnership programs were omitted. Year-end is December
31.
Projected Cash Flow
The following chart shows monthly cash balance and cash flow. The table shows the
expected cash flow for the first twelve months of operation, with yearly estimates
thereafter. Capital expenditures include computer equipment and technology &
software investment:
 Computer Equipment: represents 20% of the current fixed corporate costs. In
2000, it represents $80,000 from the fixed corporate costs.
 Technology & Software Investment: represents 50% of the current fixed
technology costs. In 2000, it represents the $1.3 million of the fixed technology
costs

Projected Profit and Loss
The table below shows the profit and loss statement for NoHassleReturn.com. The
itemized costs for fixed technology, corporate and advertising are reflected in the
sales and marketing row in the table:
 Fixed Technology Costs: represents a percentage of revenues allocation for all
fixed computer and Internet-related developments and charges. In 2000, $800,000
is allocated for the proprietary software development, $300,000 for the website
design, and $200,000 for systems integration.
 Fixed Corporate Costs: represent a percentage of revenues allocation for all
fixed corporate cost associated with office related charges. In 2000, $200,000 is
allocated for initial sales force hire, $50,000 is allocated for hiring and training
expenses, and another $150,000 is allocated for the office setup and
purchase/lease of necessary computer equipment and infrastructure.
 Advertising: represents a percentage of revenues allocation for advertising in all
media. In 2000, $250,000 is allocated for the industrial marketing campaign. In
the subsequent years, the much larger budgets include allocations for TV
advertising.

 Sales & Marketing: represents a percentage of revenues allocation for marketing
and selling activities, including commissions paid on sales. In 2000, $200,000 is
allocated for the initial sales and marketing related activities.
 Research and Development: represents a percentage of revenues allocation for
R&D activities. In 2000, $200,000 is allocated for testing and fine-tuning of the
computer systems and programs.
 General & Administrative: represents a percentage of revenues allocation for
expenses associated with running a corporation. In 2000, $20,000 is expensed
against the initial set-up, legal and accounting fees, etc.
 Depreciation: represents a depreciation on all capital investment; straight-line
depreciation over 20 years.
eCommerce Revenue Model
The front end of the business is as important as the back end. E-commerce
businesses plan their revenue model in many different ways. These include:
Direct SalesModel
The direct sales model is the most commonly used revenue earning model adopted by
the e-commerce companies. It involves setting up a store in an online marketplace or a
self-owned website and shipping the goods as and when the money is paid by the
customer.
Freemium Model
Freemium model is prevalent among SAAS providers who let you test some
features of their software for free but charges money for advanced features.
Subscription Model
Subscription is one of the best strategies to retain users and have reliable
income streams. Companies which rely on subscription revenue models
deliver the customers products and services and charge them a fee for
same at regular, scheduled intervals.
Dollar shave club is a perfect example of the company relying on the
subscription-based revenue model.

Credit Model
This revenue model is widespread in the mainland Europe but has recently
found its way to the other parts of the world. This is a ‘buy now, pay later’
model which allows the customers to purchase the goods and services on
credit and pay for it at a later date. The income is generated in the form of
profits + interest rate.
British clothing company Next has seen a great response after adopting this
revenue model.

Ecommerce site inter into agreement with its vendor.
VENDOR AGREEMENT FOR PROVISION OF E-COMMERCE SERVICES
This agreement is made at ______ on this ____ day of _______ 2012 between
______________________________, an individual proprietor/partnership firm duly registered
under provisions of Partnership Act, 1932/ a company incorporated under the provisions of
Companies Act, 1956 having his/her/its address/registered office at
___________________________________________________________,
___________________________________ (acting through Mr.
_____________________________________, duly authorized to enter in to present agreement
by partners / board of directors ) (hereinafter referred to as “the Vendor” which expression shall
mean and include his/her/its successors in title, administrators and assigns) of the First Part
And
_________________, a partnership firm having its office at
__________________________________________________________________ through its
partner _______________ duly authorized by partners of the firm to enter in to present
agreement (hereinafter referred to as “the Firm”) of Second Part The parties above referred are
individually known as “the party”/ “the Vendor” / “the Firm” as the case may be and collectively
referred to as “the parties”;
WHEREAS the Vendor is engaged in the business of manufacturing/importing/distributing
_______________ and similar items;
AND WHEREAS the Firm is owner of E-Commerce Website by the name of
www._______.com wherein various products of different nature are marketed and sold using
electronic medium more particularly through the e-commerce domain.
AND WHEREAS the parties hereto have after mutual discussions have come to an agreement
that the products of the Vendor will be marketed by www._________.com on their ecommerce
store;
AND WHEREAS parties have agreed to reduce their terms in writing

NOW THIS AGREEMENT WITNESSES AS UNDER
1. Commencement, Term, Renewal
1.1 The date of execution of this agreement shall be the commencement date
and the agreement shall remain valid and binding for a period of _________ year
initially and can be renewed on mutually agreed terms at the time of renewal for
such terms as the parties agree. All renewals of the agreement shall be express
and in writing. No oral agreement shall be binding on either of the party.
2. Marketing Tools/Support, Products, Availability of products etc.
2.1 The Vendor will keep informed at all times the Firm about the availability of
the products in its inventory along with detailed specifications like size, colour,
texture etc. etc. as may be required of the product. Order once placed on the
Firm by the customer shall have to be honoured by the Vendor at all costs.
3. Fee/Commissions etc
3.1 The firm as such shall not charge any fee for providing webspace/display on
website however for all such sales that are made/generated using the website
www.___________.com a commission shall be paid by the Vendor to the Firm.
The details of commissions to be paid product category wise is specified is
Schedule A to this agreement. The schedule can be amended to modify any rate
of commission in respect of any product. Any amendment to such schedule will
be express. The said schedule is to be treated as part and parcel of the
agreement.
3.2 It is expressly agreed by the parties hereto that the Firm shall debit the
amount of commission from the remittance to Vendor at the time of forwarding
the order received from the end customer.
3.3 The parties will endeavor to perform reconciliation of accounts/orders
every 90 days.
4. Order, Handling, Delivery etc.
4.1 Orders for the product shall be received using the website www.______.com
and shall be forwarded to the Vendor by the Firm via
email/Telephone/Fax/Courier.

4.2 The Vendor shall upon receipt of the order from the Firm immediately arrange
to deliver the products to the designated address as early as possible but in any
case the dispatch shall be made within 15 (FIFTEEN) days of the receipt of the
Order. In case the Vendor fails to dispatch the product within the aforesaid time,
it has to return the amount received back to the Firm forthwith. No delay in
returning the amount is permissible and any delay caused shall be considered as
breach of the agreement and be one of the cause for termination of agreement.
The Vendor shall provide to the Firm the consignment number, details of
courier/shipment agency immediately followed by proof of delivery.
4.3 The Vendor shall ensure that the products dispatched are of the
specifications ordered and there is no variation whatsoever. The necessary
guarantee/warranty shall be provided by the Vendor to the customer.
4.4 The Vendor agrees to replace the defective products supplied to the
customer at its own cost and shall not hold the Firm responsible in any manner
whatsoever.
4.5 The Firm may, at its discretion arrange to lift the defective products from the
customer however the Vendor will still be liable to replace the defective product.
Any charges incurred by the Firm for lifting and forwarding such defective goods
shall be on account of the Vendor. The Vendor shall make good such charges to
the Firm upon receipt of invoice/debit note. No request for any adjustment from
future payables to the Vendor from Firm will be made however, the Firm is at its
liberty to deduct such amount from future payables of fresh Orders. Such
deductions shall not be treated as practice and/or precedent. For avoidance of
doubts it is clarified that defective would mean and include but is not limited to
wrong product, damaged product, mis sized product and any other shortcoming
which the customer may point out. The Vendor hereby authorizes the Firm to
entertain all claims of return of the Product in the mutual interest of the Vendor as
well as the Customer.
5. Covenants of Vendor
The Vendor hereby covenants with the Firm as under :
5.1 To deliver the product of the Ordered specifications/description only including
quantity and quality prescribed in the Order and there should be no instance of
wrong item being delivered and/or quality issue and/or issue of Non delivery.
Further, the Vendor shall maintain adequate stock/inventory of the items at all
times. In case the Vendor is running out of supplies or is likely not to fulfill the
Order received by the Firm, it shall intimate to the Firm at least ______ hours
(________ days) in advance so that notice of OUT OF STOCK for the product
can be placed on the website.

5.2 Not to send any kind of promotion material or any such material, which is,
derogatory to and/or adverse to the interests financial or otherwise of the Firm, to
the customer either along with the products supplied or in any manner
whatsoever.
5.3 Not to do any act/deal in a thing / products/goods/services which are either
banned/prohibited by law or violates any of the intellectual property right of any
party in respect of such product.
5.4 The Vendor declares that it has all rights and authorisations in respect of
intellectual property rights of third parties and is authorised to
sale/provide/licence such products to the customer. The copy of such
authorization shall be provided on demand without failure and/or protest.
5.5 The Vendor agrees to indemnify and keep indemnified the Firm from all
claims/losses (including advocate fee for defending/prosecuting any case) that
may arise against the Firm due to acts/omission on the part of the Vendor
5.6 To provide to the Firm, for the purpose of the creation/display on website of
Firm, the product description, images, disclaimer, delivery time lines, price and
such other details for the products to be displayed and offered for sale.
5.7 To ensure and not to provide any description/image/text/graphic which is
unlawful, illegal, intimidating, obnoxious, objectionable, obscene, vulgar, opposed
to public policy, prohibited by law or morality or is in violation of intellectual
property rights including but not limited to Trademark and copyright of any third
party or of inaccurate, false, incorrect, misleading description or is surrogatory in
nature. Further it will forward the product description and image only for the
product which is offered for sale through the website of the Firm. The Vendor
agrees that in case there is violation of this covenant, it shall do and cause to be
done all such acts as are necessary to prevent disrepute being caused to the
Firm
5.8 To provide full, correct, accurate and true description of the product so as to
enable the customers to make an informed decision. The Vendor agrees not to
provide any such description/information regarding the product which amounts to
misrepresentation to the customer.
5.9 To be solely responsible for the quality, quantity, merchantability, guarantee,
warranties in respect of the products offered for sale through portal of the Firm.

5.10 At all times have access to the Internet and its email account to check the
status of approved orders and will ensure prompt deliveries within the time frame
mentioned herein before in the agreement.
5.11 Provide information about the Order Status including Airway Bill Number on
a daily basis.
5.12 To raise an invoice as well as receipt of payment in the name of Customer
for an amount equivalent to the amount displayed as MRP on the online store to
the customer and paid by/charged to the customer.
5.13 Not to offer any Products for Sale on the Online Store, which are prohibited
for sale, dangerous, against the public policy, banned, unlawful, illegal or
prohibited under the Indian laws.
5.14 To provide satisfactory proof about the ownership/licences of all the legal
rights in the Products that are offered for sale on the Online Store as and when
demanded by the Firm.
5.15 To pass on the legal title, rights and ownership in the Products sold to the
Customer.
5.16 To be solely responsible for any dispute that may be raised by the customer
relating to the goods, merchandise and services provided by the Vendor. No
claim of whatsoever nature will be raised on the Firm.
5.17 The Vendor shall at all time during the pendency of this agreement
endeavor to protect and promote the interests of the Firm and ensure that third
parties rights including intellectual property rights are not infringed.
5.18 The Vendor shall at all times be responsible for compliance of all applicable
laws and regulations including but not limited to Intellectual Property Rights,
Local Sales Tax, Central Sales Tax, Service tax, Value added tax, Standards of
Weights & Measures legislation, Sale of Goods Act, Excise and Import duties,
Drugs and Cosmetics Act, Drugs and Remedial Magic Act, Code of Advertising
Ethics, etc.
5.19 To provide to the Firm copies of any document required by the Firm for the
purposes of performance of its obligations under this agreement within 48 hours
of getting a written notice from the Firm.
5.20 To seek advance written approval from the Firm, prior to release of any
promotion/advertisement material, in so far as the same relates to services
offered pursuant to the terms of this Agreement.

6. Warranties, Representations and Undertakings of the Vendor
The Vendor warrants and represents that
6.1 The signatory to the present agreement is having the right and full authority
to enter into this Agreement with the Firm and the agreement so executed is
binding in nature.
6.2 All obligations narrated under this Agreement are legal, valid, binding and
enforceable in law against Vendor.
6.3 There are no proceedings pending against the Vendor, which may have a
material adverse effect on its ability to perform and meet the obligations under
this Agreement;
6.4 That it is an authorized business establishment and hold all the requisite
permissions, authorities, approvals and sanctions to conduct its business and to
enter into present agreement with the Firm.
6.5 It shall, at all times ensure compliance with all the requirements applicable to
its business and for the purposes of this agreement including but not limited to
Intellectual Property Rights, Sales Tax, Central Sales Tax, Service tax,
Standards of Weights & Measures legislation, Sale of Goods Act, Value added
tax, Excise and Import duties, etc. It further declares and confirm that it has paid
and shall continue to discharge all its obligations towards statutory authorities.
6.6 That it has adequate rights under relevant laws including but not limited to
various Intellectual Property Legislation(s) to enter into this Agreement with the
Firm and perform the obligations contained herein and that it has not violated/
infringed any intellectual property rights of any third party.
6.7 It shall maintain details of all transaction and mark as complete / incomplete
as the case may be and shall provide the same to the Firm upon demand.
7) Rights of Firm:
7.1 Vendor agrees and acknowledges that the Firm, at all times during the
continuance of this Agreement, shall have the right to remove/block/delete any
text, graphic, image(s) uploaded on the online store by the Vendor without any
prior intimation to Vendor in the event the said text, image, graphic is found to be

in violation of law, breach of any of the terms of this Agreement, terms and
conditions of _________ Shopping Website. In such an event, the Firm reserve
the right to forthwith remove/close the online store of the Vendor without any
prior intimation or liability to the Vendor.
7.2 Appropriate disclaimers and terms of use on _________ Shopping portal
shall be placed by the Firm.
7.3 At any time if the Firm believes that the services are being utilized by the
Vendor or its Customer in contravention of the terms and provisions of this
Agreement, Terms and conditions of use of _______ Shopping, the Firm shall
have
the right either at its sole discretion or upon the receipt of a request from the legal
/ statutory authorities or a court order to discontinue/terminate the said service(s)
to Customer or the End user as the case may be, forthwith remove/block/close
the online store of the Vendor and furnish such details about the Vendor and/or
its customers upon a request received from the Legal/ Statutory Authorities or
under a Court order.
8 Indemnity
8.1 The Vendor indemnifies and shall hold indemnified the Firm, its partners,
officers, employees, representatives, agents from and against all losses,
damages, claims, suits, legal proceedings and otherwise howsoever arising from
or in connection with any claim including but not limited to claim for any
infringement of any intellectual property rights or any other rights of any third
party or of law, concerning quality, quantity and any claim in relation to the
Vendor’s product, the breach of any of the Vendor’s warranties, representations
or undertakings or in relation to the non-fulfillment of any of its obligations under
this Agreement or arising out of the Vendor infringing any applicable laws,
regulations including but not limited to Intellectual Property Rights, Local Sales
Tax, Central Sales Tax, Service tax, Value Added tax, The Standards of Weights
& Measures legislation, Excise and Import duties, etc . For the purpose of this
clause reference to the Firm shall also include the Mobile Operators and such
other agencies through whom the Firm shall make the Online Store available to
the Customers.
8.2 This article shall survive the termination or expiration of this Agreement.
9 Limitation of Liability
9.1 The Firm on the basis of representation by the Vendor is marketing the
products of the Vendor on the shopping portal ____________ to enable Vendor
to offer the its products for sale through the said online shopping portal. This
representation is the essence of the Contract. It is expressly agreed by the

vendor that the Firm shall under no circumstances be liable or responsible for
any loss, injury or damage to the Vendor, customer or any other party
whomsoever, arising on account of any transaction under this Agreement or as a
result of the Products being in any way damaged, defective, in unfit condition,
infringing/ violating any laws/ regulations/ intellectual property rights of any third
party. The Vendor agrees and acknowledges that it shall be solely liable for any
claims, damages, allegation arising out of the Products offered for sale through
online shopping portal ____________ (including but not limited to quality,
quantity, price, merchantability, use for a particular purpose, or any other related
claim) and shall hold the Firm harmless and indemnified against all such claims
and damages. Further the Firm shall not be liable for any claims, damages
arising out of any negligence, misconduct or misrepresentation by the Vendor or
any of its representatives.

9.2 The Firm under no circumstances will be liable to the Vendor for loss and/or
anticipated loss of profits, or for any direct or indirect, incidental, consequential,
special or exemplary damages arising from the subject matter of this Agreement,
regardless of the type of claim and even if the Vendor has been advised of the
possibility of such damages, such as, but not limited to loss of revenue or
anticipated profits or loss business, unless such loss or damages is proven by
the Vendor to have been deliberately caused by the Firm.
10 Termination and effects of Termination
10.1 This Agreement may be terminated by the Firm forthwith in the event
10.1.1 Vendor fails to make payment of the sum demanded after it has been
served a 48 hours written notice;
10.1.2 Vendor commits a material breach of any representation, obligations,
covenant, warranty or term of this agreement and the same is not cured within 30
days after written notice given by the Firm.
10.1.3 If a Petition for insolvency is filed against the Vendor.
10.1.4 If the Vendor is in infringement of the third party rights including
intellectual property rights.
10.2. This agreement may be terminated without reason by either party after
serving upon the other, a written notice of 30 days. The agreement shall stand
terminated after expiry of such period.
10.3 Effect of Termination:
10.3.1 In the event of termination/expiry of this Agreement, the Firm shall remove
the Links and shall discontinue display of the Products on online shopping portal
_____________ with immediate effect.
10.3.2 Firm shall not be liable for any loss or damages (direct, indirect or
inconsequential) incurred by the Vendor by virtue of termination of this
agreement.
10.3.3 During the period under notice both the parties shall be bound to perform
its obligations incurred under this agreement and this sub-clause shall survive
the termination of this agreement.
11. Jurisdiction, governing law and ex-parte Orders

11.1 This agreement is subject to exclusive jurisdiction of competent Courts of
law at Mumbai only.
11.2 The laws of Republic of India, as are in force, shall be applicable to present
agreement.
11.3 The Firm is entitled to obtain ex-parte ad- interim injunction orders
restraining the Vendor to prevent any loss/anticipated loss either in material
terms or in terms of intellectual property or causing damage/loss/harm to
reputation/goodwill of the Firm by the Vendor, its representatives, associates or
assigns.
12. Notices
12.1 All notices and other communication under this Agreement shall be in
writing, in English language and shall be caused to be delivered by hand or sent
by telex, fax, email or courier in each case to the addresses as set out at the
beginning of this Agreement.
13. Intellectual Property Rights
13.1 The Vendor expressly authorises the Firm to use its trade marks/copy
rights/ designs /logos and other intellectual property owned and/or licenced by it
for the purpose of reproduction on the website and at such other places as the
Firm may deem necessary. It is expressly agreed and clarified that, except as
specified agreed in this Agreement, each Party shall retain all right, title and
interest in their respective trademarks and logos and that nothing contained in
this Agreement, nor the use of the trademark / logos on the publicity, advertising,
promotional or other material in relation to the services shall be construed as
giving to any Party any right, title or interest of any nature whatsoever to any of
the other Party’s trademarks and / or logos.
14 Entire Agreement
14.1 This Agreement embodies the entire agreement and understanding of the
Parties and supersedes any and all other prior and contemporaneous
agreements, correspondence, arrangements and understandings (whether
written or oral) between the Parties with respect to its subject matter.

15 Assignment
15.1 Neither this Agreement nor any part of it is assignable, transferable, sub-
licensable, sub-contractable or conveyable by Vendor, either by operation of law
or otherwise, without the express, prior, written consent of the Firm signed by an
authorized representative of such Party. The Firm is at liberty to refuse such
consent.
16 Confidentiality:
16.1 The contents of the agreement and any information passed on by the Firm
to the Vendor is highly confidential in nature and the Vendor agrees and
undertakes to maintain the confidentiality of the information and user/customer
data disclosed, generated or made available to Vendor under this Agreement.
The said information shall not be used by the Vendor or its agents, servants,
representatives or any person acting through or claiming through the Vendor for
any purpose other than for the performance of its obligations under this
Agreement. The Vendor agrees that the unauthorized disclosure or use of such
information would cause irreparable harm and significant injury, the degree of
which may be difficult to ascertain. Accordingly, Vendor agrees that the Firm
shall have the right to obtain an immediate injunction from any court of law
ensuing breach of this Agreement and/or disclosure of the Confidential
Information. The Firm shall also have the right to pursue any other rights or
remedies available at law or equity for such a breach.
17 Relationship of Parties
17.1 Nothing in this Agreement will be construed as creating a relationship of
partnership, joint venture, agency or employment between the Par ties. The Firm
shall not be responsible for the acts or omissions of the Vendor and Vendor shall
not represent the Firm, neither has, any power or authority to speak for,
represent, bind or assume any obligation on behalf of the Firm.
18 Waiver and Amendment
18.1 No waiver of any breach of any provision of this Agreement constitutes a
waiver of any prior, concurrent or subsequent breach of the same or any other
provisions, and will not be effective unless made in writing and signed by an
authorised representative of the waiving Party.
18.2 Except as expressly set out in this Agreement, no amendment is binding on
the Parties unless it is in writing and signed by a duly authorized representative
of each of the Parties.
19 Force Majeure

19.1 Neither Party shall be responsible or liable for any delay or failure to perform
its obligations (other than an obligation to make payment) under this Agreement
due to unforeseen circumstances or any event which is beyond that Party's
reasonable control and without its fault or negligence, but not limited to, acts of
God, war, riots, embargoes, strikes, lockouts, acts of any Government authority,
delays in obtaining licenses or rejection of applications under the Statutes, failure
of telephone connections or power failure, fire or floods.
20 Two Originals
20.1 This Agreement may be executed in two (2) counterparts, one to remain
with each party and each of which shall be deemed an original and which shall
together constitute one Agreement.

Schedule A herein before referred
Details of product category wise commission
Sr
No.
Category of Products Commision in
% terms
1. Electronic Goods 6%
In witness whereof the parties have hereto caused their respective hand and
seal to be affixed the day and year first hereinabove mentioned.
Signed sealed and delivered by the
within named Vendor ______________
____________ through Mr. __________
____________________ duly authorized
in this behalf
X____________________
Signed sealed and delivered by the
within named Firm M/s _____________
through _______________. X ____________________

Ecommerce site provide goods for customer at the respected address.
The number one cause of cart abandonmentis hidden delivery costs at
the checkout.
A study conducted in 2013 by eDigitalResearch and IMRG, found that
77% of onlineshoppers have abandoned their basket in the past year,
with 53% citing unacceptablyhigh delivery costs as the main reason
for bailing.
A newer study from this year by Hubspot claims that the average checkout
abandonmentrate is 67.4%, so an improvementon two years ago but the
majority of abandoners still cite hidden deliverycharges as the main reason
for cart abandonment.
It seems that checkout abandonmentis still very much linked to nasty
deliverysurprises.
Many giants of ecommerce offer free shippingwithout a minimumspend,
however many others can’t swallow the costs of this.
However if shippingcosts and options are made completely transparentas
earlyas possible in the customer journey, this will certainlyprevent a lot of
unpleasantsurprises andabandonedcarts.
How best to present this information? Here are 12 excellentways that
ecommerce stores displaytheir shippinginformation.
I originally wrote this guide last year and it has become somewhat out of
date now, so this is a revised and updated version of that previously
publishedpost
Amazon
We may as well start at the most obvious place…
It’s clear in bold and all-caps that Amazon offers free deliveryalmost across
the board.

I’m an Amazon Prime member, so I’m fullyaware I’ll be able to receive
eligible goods with free next-daydelivery. However this also tells me I’m
eligible for day of release delivery.
For non pre-orders Amazon provides further options for deliveryonce the
item has been added to the basket and an address has been selected
E-commerce is both the greatest opportunity and most difficult
challenge you will ever face as a distributor. There is more information
in e-commerce distribution than you could possibly realize, and the
potential for growth of your business is exponential. However, e-
commerce can be scary and unforgiving. Fortunately, you can improve
your chances of success by understanding the top 10 things or best

practices, reports Leslie Hansen Harps of Inbound Logistics, every
distributor should know about e-commerce.
1. Mobile E-Commerce Distribution Is Real.
Mobile e-commerce distribution is not simply an ideal; it is a fact. The
majority of online shopping is through smartphones and apps, and
your company needs to leverage this by providing services to those
companies who have app-based and mobile-optimizing shopping
environments for their customers.
2. B2B E-Commerce Is King.
As a distributor, most of your customers are actually businesses. In
the modern supply chain, you are going to need to realign your
business strategy with partnering businesses. In other words, you
need to transition to a business-to-business strategic partner and
services provider.
3. AmazonSupply.com Is Your Biggest Threat.
AmazonSupply.com, reports Insite Software, is one of your biggest
threats to maintaining a role in the distribution network. Amazon has
flooded the market with products, and now, the company is doing the
same process to flood the supply chain. You need to consider that
some of your business will be lost to AmazonSupply.com, and you
need to work to encourage your customers to stay with your company.
However, do not be discouraged when some clients or customers
decide to abandon ship in favor of Amazon.
4. Overseas Manufacturing Is Not the Solution to E-
Commerce Distribution Problems.
Overseas manufacturing is more like opening a can of worms than
opening doors if you plan on only selling your products in the U.S.,
reports Sean Ogle. While some overseas manufacturing can help your
company, more customers are turning to products manufactured in the
U.S., and this mindset is only growing stronger with the 2016 election.
In another scenario, the 2016 election could have serious

consequences for companies making products overseas, so today’s
distributors need to focus on products manufactured in the U.S. as a
priority. Ultimately, not counting on overseas manufacturing of
products for sale in the U.S. can act as a safety net for today’s
distributors.
5. You Need to Focus on the Customer Experience.
The customer experience is one of the greatest problems in meeting
the demands of an e-commerce driven world. According to
Bob Trebilcock of Logistics Management, clients are focusing more on
cycle time, and as a distributor, your ability to get products out equal
to, if not faster than, Amazon can be the determining factor in if your
customers or clients continue to work with your company. The key to
making this practice work is by giving your clients options. For
example, offer shipping options that range from two days to one week.
Some customers will not mind the week, but those who need it sooner
have the ability to get it sooner.
6. E-Commerce Is Ongoing and ContinuallyEvolving.
E-commerce distribution is not static; it is always evolving and growing
in scope. More small businesses are entering the realm of e-
commerce daily, and your competitors are waiting for the chance to
pounce. You need to be proactive in getting your company in front of
customers and other businesses. Even if business seems to be
booming, you still need to work on marketing for e-commerce
consumers because some time in the future the number of customers
you currently have could change dramatically, and you need a backup
plan.
7. Align Distribution StrategyWith Information and
Insights From Analytics.
Use analytics to stay informed of how your business needs to adapt to
the needs of e-commerce B2B businesses. Your strategy needs to
align with the strategies of your B2B clients, and you should be willing
to use this information to create new ideas and ways of working to
give your clients the best rates and services possible.

8. Increase Your VisibilityThrough Advanced Shipping
Notification (ASN).
An advanced shipping notification (ASN) helps to keep your carriers
happier and engaged by notifying them when you are about to ship a
specific purchase order. This gives them a time to expect arrival of the
product, and you can include all of the relevant information on the
ASN for your shipment. Ultimately, this keeps the supply chain
effective and connected.
9. Hold Vendors Accountable.
Some vendors will ignore your processes and refuse the common
decencies of business. As a distributor, you need to hold vendors
accountable. If a vendor does not meet your expectations or adhere to
the rules and guidelines in your company, create a way of
encouraging adherence. This can be a suspension or other form of
penalty. Advise the vendor that future occurrences could result in the
dissolution of the B2B relationship. However, you must be reasonable
in your rules and requests.
10. You Still Need to Manage the Returns Process.
E-commerce distribution is going to inherently result in more returns
than brick-and-mortar shopping. Customers may order the wrong size,
incorrect color or wrong product. You need to be prepared to handle a
flow of goods back into your warehouse and distribution network from
your customers, and nearly all online retailers offer free shipping on
returns. As a result, you need a system to manage the whole returns
process and print out return shipping labels for customers on-demand.
Your education on e-commerce does not here. E-commerce is also
evolving, and today’s insights may not necessarily reflect what
tomorrow may bring. Rather than simply hoping for the best, you need
to leverage the information found in these 10 factors to provide better
service and products than your competitors. Ultimately, you can get
more customers than you could have dreamed through e-commerce,
but turning a blind-eye to e-commerce can spell your doom

Ecommerce company maintain supply chain.
One major challenge in starting an e-commerce business relates to inventory.
Very few individual or small business entrepreneurs can afford to keep the
kind of inventory needed to do the volume of business you'll want to undertake
to make it worth your time. In the initial stages, setting up an e-commerce
website with the products you sell and having someone else
manage inventory, shipping, and returns may be the more prudent option.
This is where supply chain strategy becomes important.
Basic Supply Chain Management Terms
Before exploring a viable supply chain strategy, let's establish some basic
concepts related to supply chain management.
 Product sourcing is locating a source of products to sell that you do
not manufacture yourself.
 Drop shipping involves transferring customer orders to another
company, who fulfills the orders by shipping the items directly to the
customer on your behalf.
 Wholesale suppliers are simply providing you items at wholesale
prices from the manufacturers.
First Steps to Clarifying Your Strategy
There is no one-size-fits-all strategy in any aspect of business and certainly
not in supply chain management. To come up with solutions to work for you,
begin by asking yourself the following questions:
 Will you manufacture or resell items?
 Will you keep an inventory or not?
 How much control do you want over the packaging and shipping?
 How critical is price control to your business model at this stage?
 What volumes will you be dealing in?
With these questions answered, you can determine what your supply chain
management model will look like.
Contact Trade Magazines and Associations to Develop Suppliers
If you are setting up an e-commerce business, you probably have some
thoughts on sourcing. If this happens not to be the case, trade magazines are

a great place to start in finding manufacturing companies offering products of
interest.
Contacting trade organizations and attending trade shows associated with the
products you wish to deal in provide great opportunities to network and make
valuable contacts. In fact, these organizations aim to connect manufacturers
and retailers, even if they are from different countries.
Evaluate Local Retailers as a Source
Do not rule out local retailers with limited resources as product sources. They
are successful in their own town but might have an interest in someone selling
their products elsewhere.
Sourcing Directly From Manufacturers
Sourcing directly from manufacturers is Desirable but often difficult for small
players. A manufacturer usually does not want to fuss with small retailers.
Wholesalers have a sales force, and resources, in place specifically for
distributing the products to e-commerce businesses that will retail the
products. Also, the manufacturer wants to sell very large quantities that are
usually beyond the reach of smaller e-commerce players.
If a manufacturer is willing to work directly with you, it is most likely because
they are too small to catch the attention of wholesale distributors. In a case
like this, a benefit, if executed properly between you, is the opportunity to
grow together. Conversely, the ability to keep up with volume demand, which
is essential to your own growing business, is a risk in partnering with smaller
manufacturers.
In forming partnerships with manufacturers of any size, it's important to
understand potential risks, discuss them at the outset of talks of working
together with them, and clearly establish expectations and outcomes.
Drop Shipping for E-Commerce
Drop shipping is the real revolution of e-commerce. There are many benefits
and few risks in drop shipping.
Benefits of Drop Shipping
 Keeping stock no longer necessary
 Lower wholesale prices
 No upfront investment in stock

 Range of products extended without investment or risk
 Less time devoted to inventory and delivery
Risks of Drop Shipping
 Some drop shippers can raise their prices after getting an e-commerce
player dependent on them.
 There might be fixed overheads and other costs that are not directly
related to the fulfillment of orders.
 Some drop shippers may require a membership fee. The idea of a
membership fee in and of itself shouldn't necessarily elicit red flags or a
'hard no', as it could be a tool to weed out frivolous players. But make
sure that you find the fee to be reasonable.
 The drop shipper might cut corners by using an unreliable shipping
company.
 Situations requiring reverse logistics could turn out to be sticky.
 The billing policies of the drop shipper might be unsuitable.
 New drop shippers are born every day and crowd the marketplace. As a
result, some drop shippers might go out of business.
The Bottom Line
An e-commerce business depends upon its sales. That is why sourcing is a
primary activity in the business of e-commerce. Your marketing plan, budget,
and the stage of the life cycle you are in will help you decide the right
approach for your.

Kind of agreement signed between the ecommerce sites and the bank which collect
payment on behalf of ecommerce site.
Every store owner comes to realize that his business needs to have an online
presence since people all over the world are shopping on the Internet. The process
of moving a business online starts with understanding the ins and outs of e-
commerce. Among topics what to sell online, and how to start an online store, the most
puzzling one is how to accept credit and debit card payments online.
The payment processing industry is filled with jargon that needs patience to be
understood, especially through the eyes of an outsider. In the words of some brilliant
person, if you can’t explain it to a kid, you don’t understand it yourself. You guessed
it, these are the words of Albert Einstein. In addition to the above, if you don’t
understand the basics of payment processing, you are not able to accept payments
online.
For the buyer the credit card payment either offline or online is simple. A customer
picks an item and goes to the checkout or the shopping cart page to pay for it.
Unlike the merchant, he doesn’t need to understand the magic of the process where
the money is transferred from him to a seller account.
The topic on online payments is a bit difficult to answer without writing a dissertation
on payment processing. Each of the terms deserves to be considered as a separate
topic. The following, therefore, is not pretended to be an encyclopedic presentation
of information of how online payments work for merchants. Nevertheless, it explains
the main processes that occur during online paymen
Here’s a spoiler: 3rd party payment processors – those that don’t require an internet
merchant account, and integrate with your store quickly – are best for startups.
TRADITIONAL WAY TO ACCEPT PAYMENTS
ONLINE
You’d think, what may appear to be complex about online payments? There is one
simple form on a website where a customer submits his payment details and
presses the button “Pay”. Then a merchant waits for transferring money to his

account. Well, in a perfect world, that’s what happens, but in the real world, it’s a bit
more complicated.
Traditionally, to make this happen an online retailer needs:
 a special bank account to hold the funds received from online payments until
they are transferred to a business bank account – this is a merchant account;
 a secure service to verify and authorize payments to the account – this is a
payment gateway.
MERCHANT ACCOUNT
A type of a bank account that allows accepting Visa, MasterCard, American Express
or any other debit or credit card payments is known as a merchant account. A
merchant account implies a contractual relationship between your company and a
bank according to which funds derived from your sales and paid by credit or debit
cards are transferred to your business account.
A bank or a payment processingcompany (you will read about payment processors in
greater details below) will assign a unique merchant identification number to your
company and your bank account in order to uniquely identify your business among
billions of others all over the world. Merchant ID is present in every payment that
takes place on your website.
When applying for a merchant account, a bank or a processing company will review
your application taking into account type of products or services you’re selling,
planned total sales, countries of business operations and currenciesof payment
cards.
There are various fees associated with a merchant account such as monthly
minimum, transaction fee, chargeback fee and others. It is necessary to understand
all the fees of a merchant account in order to ensure a business will be profitable.
PAYMENT GATEWAY
A payment gatewayrepresentssoftwarethat connects amerchant e-commercewebsite
and his bank. Payment gateways, suchas Authorize.net, require amerchant account.
Similarlyto the point ofsale cardterminal apayment gateway:
 checks the validity of cards;

 determines the issuingbank of the card;
 encrypts the numbers associatedwiththe card;
 tells a merchant bank whether to initiate a funds transfer;
 sends the answers back to your site.

Payment gateways can roughly be divided into the followingtypes: direct, redirect.
Direct (a.k.a. non-hosted) gateways process payment details within a merchant store, and the
customer never leaves e-commerce website to enter his card information. To take direct
payments a merchant website should be SSL encrypted, which means an URL of a checkout
page shouldstart with “https://secure.”This also involves passing the Payment Card Industry
data SecurityStandard.
Redirect payment gateways (a.k.a. hosted) sendthe customer to apayment processor
website. Once the customer has paid, he will be returnedback to the e-commercesite to
complete the checkout process. In this case, a merchant doesn’t need to worry about PCI
compliance, as he only collects orderdetails.
For the use of a gateway, a merchant also pays fees: monthlyfees, transactionfees, setup
fees, chargebackfees. Whenit comes to fees andrates, it is important to take the time and
make sure you fully understand what you are being charged for.
Acquiring an internet merchant account and payment gateway software involves lots of
effort. There are far simpler way to accept payments online – all-in-one payment solutions.
3RD PARTY PAYMENT PROCESSORS – MODERN
WAY OF ACCEPTING PAYMENTS
Visa and Mastercardare undoubtedly the largest payment processingplatforms inthe world.
They allow to speedup the payment cycle betweendifferent banks serving as mediators
between issuing and acquiring banks in authorizing credit card/ debit card transactions. A
seller and a buyer may use the services of different banks, and in international trade, the
banks are in different countries. There are thousands of various banks, billions of merchants
and buyers. When the bank of a seller (acquiringbank) and the bank of a buyer (issuing
bank) are bothattached to one payment system – the payment process is closeto instant.
3rdparty payment processors (a.k.a. payment aggregators, third-party merchants), suchas
PayPal, Stripe, and Braintree, offer services to facilitate acceptingonline payments and don’t
require a dedicatedmerchant account at all. That’s why they have made life easier for the
online business owners unsophisticatedinnew technologiesor for thosewho are engaged in
sellingand production.

What is differentabout3rd partypayment processors?
3rdparty payment processors use one merchant account to represent different merchants that
are opposedto the traditional way – a dedicated merchant account to each merchant. In other
words, payment aggregators accept payments on behalf of a number of e-commerce
merchants.
If you have a startup – third-partypayment processorsare easyto get startedto accept
payments online. There is no need to collect the necessarydocumentationfor openinga
separate merchant account and a payment gateway because all of these you can have with
3rdparty payment processors. As for pricingpolicyof suchpayment solutions, inmost
cases, you pay when you sell. You shouldresearchseveral top3rdparty payment processors
to find which is best for your business.
As a rule, hostede-commerce solutions support along list of various payment gateways
including those of third-partypayment processors. For example, here are pre-built payment
gateways in Getsocio. We hope this article will helpyou to choose the best optionto accept
payments online for your new Getsocio-poweredstore.
Main Categories for E-Commerce Payment Methods
Online payments options generally fall into one of six meta-categories:
 Credit/Debit/Prepaid card payments: Cards represent the most popular
worldwide payment method in the United States, Canada, Mexico, China,
Korea, and most of Western Europe.
 Bank transfers: Some e-commerce websites prefer to instruct their
customers to make bank transfers directly their accounts, often using an
IBAN number.
 E-Wallets: E-wallets require customers and merchants to sign up and
create accounts, then deposit and withdraw money from linked bank
accounts. E-wallets like Paypal and AliPay are very popular in the United
States and China, respectively.
 Cash: In India, Romania, Russia, and many other parts of the world,
cash remains king – even for e-commerce. Not offering a cash-on-delivery
service is a surefire way to miss out on these markets.
 Cryptocurrencies: Cryptocurrencies are rapidly gaining interest as a
payment method for online transactions, particularly among young,
moneyed professionals with IT expertise.

 Direct carrier payments: For some products and services, the ability to
bill customers directly through their existing telephone or utility carrier is the
most efficient way to effectuate payment.
Each of the options listed below uses one or more of these six e-commerce
payment methods to effectuate payments. Your e-commerce store can (and
should) offer more than one option in order to attract the greatest number of
customers, but you will find that cultural and industry norms tend to dictate
what platform most of your customers prefer to use

Kind of policies are claimed by ecommerce site to attract customer.
E-commerce Strategies to Help
You Reach More Customers
If your business is an online store which is selling products or
services, you might be interested in helpful articles on how to reach
more customers using personal strategy.
A strategy is a summary of how your store is planning to achieve its
goals and improve its position in the market.
There are different types of strategies depending on the goals. In
this case, we will focus on how to reach more customers for our e-
commerce business.
Make sure your online store is:
 accessible from every device (PC, laptop, phone etc.).
 readable with clear design and information on it.
For this purpose, our ecommerce store needs to have a responsive
web design and a mobile friendly theme. Customers expect mobile-
friendly sites. Businesses with a mobile friendly website will make
more sales over those which do not have one. Latest statistics

show increasing mobile device usage.
Web store home page, product pages, and product categories are
the most visited places in an online store. How are they designed
and how to be understood as well as possible? These questions
may be answered by UX Design strategies.
What else can be done in order to make your online store more
profitable?

1. Increase E-Commerce Search Usability
Organizing a web store for those two groups of potential customers:
 Visitors who know what they want to buy.
 Visitors who only want to browse.
Does your e-commerce website platform record or analyze what
customers are searching for? If your online store systemis able to
tracks this, this means you are probably having effective
navigation and search capability. Customers who know exactly

what they are looking for want to find the right information as quickly
as possible. Designing a high-performing search experience is a
key feature for your users because if users can’t find what they are
looking for, they will buy it from another store.
The second category is potential customers who just want to
browse through the online store and compare items. They will use
navigation menus and move into product categories and pages. You
should organize the menu bar and categories in intuitive easy-to-
use sections.
Does your website have well-designed search and navigation
functions? They need to be user-oriented in order to be effective
and help improve the overall experience customers are having on e-
commerce websites.
To boost conversions in an e-commerce store you can improve
the search usability in the following fields:
 design and behavior of the search field;
 search scope selection;
 how should the autocomplete be designed;
 results layout and features;
 filtering and sorting the search results on the results page.

2. Use High-Quality Photographs and Good Product Descriptions
Include beautiful product images and photos to attract the attention
of the potential customer. Outside the brick and mortar world,
customers can’t touch the product and are making their buying
decisions entirely dependant on product imagery and feedback.
Showing good viewable thumbnails in the search results page – this
will help users find desired product in one click and get a better idea
of what are you offering.
Don’t just describe the product – you can create a comprehensive
list of features and benefits. Potential customers want to know
everything about a potential purchase and how this product would
help them and improve their everyday life.
Consider these tips when writing descriptions:
1. Create proper subheadings.

2. Use Bullet points to attract attention.
3. Improve readability with a larger font size.
4. Provide a video and real photographs to your product.
5. Pay attention to white spaces through the content to make copy
more readable.
Website design and content creation should work together for
optimal results. Make copy part of your whole UX experience and
enjoy higher conversion rates right away.
3. Try Personalizing the Home Page
Personalization is a technique that records what customers viewed
or visited on their last session on your website and makes new
buying suggestions on every following visit based on past
experience in the store. This can be a personalization based on
previous behavior such as previous purchases or based on real-
time data such as a location or time.
59% of online shoppersbelieve that it is easier to find more
interesting products on personalizedonline retail
stores”, invespcro.com, Online Shopping Personalization –
Statistics and Trends
Amazon is the pioneer of the user-centric shopping experience.
Their homepage helps people easily find the right product in the
personalized block in the first section when you log in under the
“related to items you’ve viewed” tag.

4. Focus on Consistent and Unique Content
Why? Because content marketing is still one of the most effective
marketing strategies you can apply today. The world of advertising
is constantly changing, consumers are trying to avoid ads in many
ways. With content strategy implemented the right way in your e-
commerce business, you can provide more value to your
customers.
To do this, you first need to understand your customers and how
your product would help them and solve their problems. The main
thing is to focus your content production around your
customer’s problems and what value you can provide to them.
Don’t forget to first understand your target audience, what their
interests are, their demographics data etc. When done the next step
is to make a plan for your posts. Publish relevant, valuable articles
with good and easy-to-share options. Best tips for good-looking
content is to include:
 Lists – They are more readable from paragraphs.

 Headlines with “How to” text drive more readers.
 Topical posts – Which are relevant to something trendy and
popular.
Do tests with headlines, measure how well works different types
content, which generates the most traffic to your online store, and
which of them led to the most sales.
5. Optimize Shopping Cart Functionality
To prevent customers abandoning their shopping carts, you should
be sure shopping cart functionality is perfect and easily
navigable. The way to understand weaknesses is to do tests
frequently. Test different options on a page to reduce shopping cart
abandonment.
During the optimizing process, you should pay attention to revenue
not in conversions because this is the main business goal. Clear

the checkout page and remove distractions and/or possible places
to exit. This will prevent any confusion during the checkout process.
Plenty of conversion studies have shown that the fewer clicks during
a checkout, the higher your conversion rate will be.
Here’s a little bonus for readers that own a WooCommerce shop –
check Tyche Softwares’ Abandoned Cart Pro Plugin for minimizing
cart abandonment rates.
6. Build E-mail Lists
If your online business isn’t using email marketing as an outlet, you
are missing out on huge sales. Use sign-up forms, give something
in exchange for an e-mail address like a discount code or even a
small present. Make sure you win the customer’s trust and never
send out emails without the user’s consent, otherwise you risk
winding up in the SPAM folder and no one wants to ruin their brand
like that.

Include sign-up fields at the end of your blog posts or buying
guides. If the visitors enjoyed the content you provided them, they
will be happy to keep in touch and get information about news,
discounts, and promotions and will leave their e-mail. Don’t forget to
include an option, where the customer is able to join your mailing
list as part of the checkout process.
An email list can never be “full” or ready, but as soon as your first
customers start to opt-in for your newsletter, you can use their
emails to:
 Promote new or upcoming products.
 Offer promotions or discounts.
 Send relevant and helpful blog posts.
 Ask for feedback.
 Create special newsletter-only campaigns and discount codes..
7. Improve Your Social Media Strategy

The social media strategy your marketing team prepares should be
connected with your content strategy. The content creation from
your e-commerce website should be published and shared on social
media, as this guarantees you a larger audience and boosted
visibility.
Visual social networks such as Instagram, Snapchat, and
Pinterest, are usually best for online shops that are selling
products, however, don’t underestimate Twitter and Facebook
as more than 75% of all internet users are also there.
There is no one-size-fits-all solution, but here is a basic list of
general guidelines you can check to see if your content follows in
order to create the best customer experience for your clients:
 Post daily and consistently.
 Consider an automated tool to make sure your posts are on
track.
 Always use images when posting, even on Twitter.
 Do not spam.
 Do not use social media for promotions only, engage with your
customers.
 Use analytics to track your audience’s engagement.
 Test multiple social media marketing strategies before picking
the right one for your business.
But how are we so sure social media marketing strategies can
help your e-commerce business? Check some benefits that come
with a well-tailored social media campaign:
 Gathering information about your customer’s online behavior
allows for the creation of targeted ads.

 Building strong relationships with people. Daily communication
with your customers helps any business to answer the buyer’s
needs and provide better user experience.
 Unique and high-quality posts on social media expand
the brand awareness and convert people to brand
ambassadors.
 Better customer support – Over 67% of consumers use social
media platforms for customer support. If your business answers
are timely and really help your customers, they can get viral.
 The cost efficiency – The fastest and cheapest way for
connecting with your customers.
 Higher conversion rates – In 2015, Facebook influenced 52
percent of consumers’ online and offline purchases, up from 36
percent in 2014. Imagine those stats in 2018.

8. Create Landing Pages
With the development of personalized landing pages with a
unique copy, your e-commerce online store increases the chance
of attracting more customers who are willing to buy your products.
Create specific landing pages for the different groups in your target
audience. Outline your buyer personas and use analytics to
determine the general demographic segments you are catering to.
How to build high-converting landing pages that drive sales, sign-ups or
subscriptions?

Here are some suggestions:
 A landing page should have only one single purpose and only
one CTA (Call to Action) button. This doesn’t mean you can’t
have multiple buttons, but they should all lead to the same
conversion goal. Conversion rates decrease if the buyer’s
attention isn’t focused well enough.
 Create clear user-friendly designs for all of your landing pages.
The only clickable elements should guide the visitor to the
desired goal. It is a good idea to hide navigation bar at the top,
social media icons or elements that can distract the visitors.
The one thing you want your visitor to do should be the only thing
they can do – Unbouce.

9. Build Advertising Strategies
E-commerce shop advertisements help to improve your online
visibility and boost sales. Before starting an ad campaign, you
should answer three questions: How many visitors does your
business’ website need for a successful conversion? How much is
the budget you can safely allocate and for what period of time?
What is the best advertisement outlet for your products? These
answers will help you to make some calculations and predictions
and will narrow your advertisement options.
Most people choose to start with Facebook Ads or Google Adwords
– The most popular and user-friendly platforms for advertising.
Whateveryou choose, the most important part is to analyze and
track the traffic to your website. Google Analytics, for example, is
showing where are visitors coming from, and what are they doing on
your website.
Retargeting methods to reach visitors and potential customers is
also a smart move to increase ads effect. Facebook pixel is a tool
that can keep a record of all the FB visitors on your website and
help create targeted campaigns.
Then you can set-up preferences based on where did your visitors
spent their time on site – product page, blog, testimonials etc.
Collecting information takes time and patience, but expanding your
audience allows for a detailed analysis that gives better results.

10. Implement User Generated Content
The UGC (User Generated Content) idea is simple: Consumers
post content (video clips, pictures, testimonials, reviews, and
blogs) that is publicly available online through social media and
other sites, regarding your store, brand or product. Generated
organic content can be either positive or negative experience with
an online store or products. UGS can help you gain more leads to
your e-commerce website, because
Shoppersthat interact with CGC are 97% more likely to convert
with a retailer than customers who do not. Brands see a 78% lift in
conversion rates when customers interact with CGC.
How can consumers generate content for you?

Here are some helpful ideas:
 Organize product contests on social media and encourage
people to share how they are using your products; you can also
enable voting rules.
 Ask customers how they think can make your product better.
 Use campaigns on Instagram with branded
company hashtags to encourage customers who love your
brand to post images and tag you.
 Try reaching new potential customers and check if there are
viral social channels you are not already using.
 Use real-time interactions with Facebook Live videos, Twitter’s
Periscope app, Youtube Live or other Live stream platforms and
services.
Conclusion
The digital strategies for e-commerce stores that we listed are a
small part of the opportunities your business can use to reach more
customers online. Every point of this article shows ideas which can
be developed into working sales.
Analyze your webpage, test some of the patterns we have outlined,
and give us feedback on what works well for your business and
what you need to improve. You can always contact DevriX and
schedule a call with one of our marketing specialists for an in-depth
analysis and any kind of marketing tips and tricks

Ecommerce site handle request for purchase return and refund.
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Having an online store can be a very lucrative venture for any entrepreneur, provided they
understand and adhere to the guidelines and rule sets of Ecommerce management. There are
many roadblocks your online business will come across every day, and in order to prevent these
roadblocks from halting your company’s progress, you need to understand and master the
three principles of Ecommerce management.
The Legal Side:
You want all transactions to be transparent and straightforward, and a standard form of terms and
conditions should cover all your transactions. You will get paid for the sale upfront, in return for
delivery of a product within the timeframe specified by the terms and conditions.
Buyers should have a clear understanding that they are entering a contract with your company
when they purchase goods from your website and in order to protect your company from
fraudulent claims, directly outline the shipping methods and time-frame, terms of delivery, how
you handle refunds and payments along with exclusions of liability and terms of use for your
website.

You will want to specify the law of jurisdiction based on your location. In the case of a legal
dispute, the case will be shifted to your legal system, which will prove to be very important if
you don’t want to find yourself negotiating foreign laws you don’t understand.
While you can expect the majority of transactions to go without a hinge, you can also be certain
that you will have to deal with fraudulent activityacross the website. As your business grows,
the threat of customer fraud will grow exponentially, and it will usually be in the form of identity
theft.
In order to protect yourself from frauds and win legal disputes quickly, get professional litigation
support services to handle claims and disputes and provide reports and valuable legal records for
your case. Frauds can come in many forms, and you won’t be able to recognize or fight them on
your own.
On a final legal note, always remember that different laws and conditions apply in different
countries, and you will have to abide by some foreign laws in order to successfully deliver
the product to the customer. For instance, some customs offices will allow you to ship
medication into their country, and some won’t. So make sure to provide all relevant information
to the recipient based on their location.
No one knows exactly when people first started trading with one another—or
how. We do know that metal coins have been used to buy and sell things for
at least 4000 years. From horses and handcarts to ships, trucks,
and airplanes, the need to trade goods has spurred on innovations in
transportation for just as long. Today, though, it's all change: many of us are
now buying and selling with a new form of commerce that involves neither
money nor transportation—at least not in the traditional sense. You just sit in
your armchair, click your mouse a few times, enter your credit card number,
and wait for the goods to show up on your doorstep. E-commerce, as this is

known, has grown enormously in the last decade, making life more convenient
for consumers and opening up all kinds of new opportunities for businesses.
Let's take a closer look at what it is and how it works!
Artwork: Shopping by computer is the basic concept of e-commerce, but it's a bit more subtle than that.
Key parts of a retail transaction that once happened in a store (such as inspecting and comparing
products and validating a payment card) now have to happen in your home, and fast, affordable, efficient
delivery also plays a crucial part in the process. As this illustration shows, you can even b uy a new
computer with a computer!
The basic components of an e-commerce system
Whether you're buying in a store or buying online, everything you do is geared
around a transaction: the basic exchange of money for goods or services. In
a real-world store, you simply take your new jeans to the checkout, hand over
some cash, and leave the store with your purchase in a bag—that's a
transaction. It works in a similar way if you're buying online, but there's one
important difference: you never actually get to handle (or even see) the goods
until they arrive at your home sometime later.
If this makes buying online slightly problematic for the purchaser, it also
introduces two extra problems for the retailer (or e-tailer, as online retailers
are sometimes known). Apart from having some means of processing
transactions online, it means they also need a way of checking that the goods
you've ordered are actually in stock, and a means of dispatching and
delivering the goods to your address.
In short, then, e-commerce is about combining three different systems:
a Web server that can manage an online storefront and process transactions
(making appropriate links to bank computers to check out people's credit card
details), a database system that can keep a check of the items the store has
in stock (constantly updating as people make orders and ideally making new
orders with suppliers when stocks run low), and a dispatch system linked to a
warehouse where the goods can be instantly located and sent to the buyer as
quickly as possible.
Only the first of these three systems is strictly necessary for e-commerce.
Many people successfully run small-scale online stores without either
complicated databases or dispatch systems: they simply have a website to
publicize their business and take orders and then they manage the stock
control and dispatch in more traditional ways. Small traders who sell items on
the auction website eBay often work in this way, for example. Their
"databases" are in their head; their "dispatch system" is simply a walk to the
local post office.

How e-commerce works
Here's one example of how a sophisticated, fully computerized e-commerce
system might work. Not all e-commerce systems work in exactly this way:
1. Sitting at her computer, a customer tries to order a book online. Her
Web browser communicates back-and-forth over the Internet with a
Web server that manages the store's website.
2. The Web server sends her order to the order manager. This is a central
computer that sees orders through every stage of processing from
submission to dispatch.
3. The order manager queries a database to find out whether what the
customer wants is actually in stock.
4. If the item is not in stock, the stock database system can order new
supplies from the wholesalers or manufacturers. This might involve
communicating with order systems at the manufacturer's HQ to find out
estimated supply times while the customer is still sitting at her computer
(in other words, in "real time").
5. The stock database confirms whether the item is in stock or suggests an
estimated delivery date when supplies will be received from the
manufacturer.
6. Assuming the item is in stock, the order manager continues to process
it. Next it communicates with a merchant system (run by a credit-card
processing firm or linked to a bank) to take payment using the
customer's credit or debit card number.

7. The merchant system might make extra checks with the customer's own
bank computer.
8. The bank computer confirms whether the customer has enough funds.
9. The merchant system authorizes the transaction to go ahead, though
funds will not be completely transferred until several days later.
10. The order manager confirms that the transaction has been
successfully processed and notifies the Web server.
11. The Web server shows the customer a Web page confirming that
her order has been processed and the transaction is complete.
12. The order manager sends a request to the warehouse to dispatch
the goods to the customer.
13. A truck from a dispatch firm collects the goods from the
warehouse and delivers them.
14. Once the goods have been dispatched, the warehouse computer
e-mails the customer to confirm that her goods are on their way.
15. The goods are delivered to the customer
All of these things are invisible—"virtual"—to the customer except the
computer she sits at and the dispatch truck that arrives at her door
E-commerce Returns and Refunds:
Call me finicky, but one of the first things I check before I hit the “Buy” button on an e-
commerce site is their returns policy. And it’s not just me. Studies indicate that 66% of
online shoppers do exactly the same thing. They insist on reviewing a store’s returns
and refunds policy before deciding on a purchase. 81% of these “reviewers” will only go
ahead with the purchase if the store offers free returns.
Spending time on crafting a returns and refunds policy is not just a way to check off all
the boxes on e-commerce must-haves. It’s also a way to invest in your brand and its
future stickiness.
A well thought out, flexible returns policy is essentially a vote of confidence by a retailer
in its own product.
E-COMMERCE RETURNS AND REFUNDS: SHOULD WE EVEN CARE?
Returns are a dreaded part of every retail story, but e-commerce stores seem to have it
much worse than their brick and mortar counterparts.
Research shows that at least 30% of all e-commerce orders end up
being returned, as against just 8.89% of brick and mortar sales.

A number of factors contribute to this significantly higher rate of returns for e-commerce
stores. These include (but are not limited to):
 Products not matching their online descriptions
 Wrong items shipped out
 Items damaged in transit
 Problems with fit and/or product quality
 Gift items that are returned
 The customer changed her mind and no longer wants the product
 Fraudulent returns
Things get more complicated as the cost of processing returns gets tacked on to the
cost of the lost sale. Data from UPS suggest that the cost of processing returns can
range from 20% to 65% of the cost of goods sold.
The holiday season is one of the worst periods for online returns. What with a sizable
proportion of holiday purchases being bought as gifts for friends and family, the
probability of returns goes up significantly. E-commerce returns are expected to hit £1
Billion during the holidays in the UK alone. With an e-commerce market that is over
three times the size, US retailers can expect a proportionately larger returns and
refunds tab in the aggregate.
WHERE WE STAND NOW
So how seamless do online retailers make the whole process of product returns?
Not very, if you go by the data. Over half of online shoppers are dissatisfied by the
online returns processes they’ve used.

A third of them even expect to see a prepaid shipping label in the box, just in case they
need to send the item back.
Managing the logistics of returns is one thing. The process of refunding shoppers the
money they spent on the item being returned is far from smooth either. Though retailers
are definitely getting better at processing refunds faster than before, they still fall short
of customers’ expectations.

Source
Whereas most customers expect refunds to be processed in under a week, fewer than
one in five retailers manage to process refunds that quickly. What impact do you think
that has on customer retention, loyalty and customer lifetime value?
WILL A LENIENT RETURNS POLICY LEAD TO A HIGHER RATE OF
RETURNS?
As Craig Adkins, former VP of services and operations at Zappos once told
FastCompany
“Our best customers have the highest returns rates, but they are also
the ones that spend the most money with us and are our most
profitable customers.”
The footwear retailer claims that their most valuable clients – the one’s with the highest
lifetime value, presumably – have a shockingly high return rate of 50%.
Zappos is not an anomaly. A study published in the Journal of Marketing showed
that stores that offer free returns see customers spend up to 457% more than they
did before initiating the return. The converse was true too. Repeat purchase
spending dropped by 75 -100% for customers who were asked to pay for return
shipping.

It’s time to read the writing on the wall. A lenient returns policy clearly pays for itself in
improved future sales.
BEST PRACTICES TO MANAGE YOUR E-COMMERCE RETURNS AND
REFUNDS
Clearly, many retailers are not doing a bang-up job of managing online returns right
now. Empirical and experimental evidence have shown the strong positive impact a
customer-focused returns policy can have on repeat purchases and customer lifetime
value.
Here are a few best practices that will help your online retail operations reduce the
rate of returns as well as better manage returns that happen anyway.
1. Build Great Product Data
One of the biggest reasons for online returns is the dissonance between what the
customer expects the product to be and what it actually is. Bridge this gap by creating
product data that does justice to your products. Work on accurate product titles, detailed
product descriptions, size guides, matching your product’s attributes to those of the
channel you’re listing it and so on.
Bonus: Here’s an example of how a retailer grew online sales by simply improving their
product data.
Another awesome benefit of solid product data? Better discoverability – on search
engines, marketplaces, you name it.
2. Encourage Customers to Leave Product Reviews
This is an extension of the product reality vs. customer expectation theme. You can help
new buyers make more informed purchase decisions by allowing existing buyers to
leave their reviews on your product pages. Not only does it instill faith in your brand and
products, it also helps from a Search Engine Optimization (SEO) perspective.
When shoppers know what to expect from a product from first-hand users, the likelihood
of them returning those products drops substantially.
3. Improve Order Fulfillment Accuracy
As mentioned earlier, shipping the wrong item (wrong variant / color / size) is an
important cause for online returns. Invest in an order fulfillment platform that sources the
right data from your online channels (your own site, marketplaces, search engines and
more) and transmits that data onward correctly to your fulfillment centers or drop ship
partners. An automated system at this stage eliminates the possibility of errors due to
manual intervention and miscommunications.

4. Decide Where to Ship a Returned Item Based on Product
Categories, SKU types
We saw earlier that shoppers expect their refunds to be processed within a week or two
at the maximum. Accepting returns to your warehouses or physical stores directly,
regardless of whether the item was fulfilled by you directly or by a drop ship vendor
helps speed up the returns and refunds process.
However, don’t use this as a thumb rule for all your SKUs. Returns for certain product
categories like large, bulky items can be managed better by having them shipped
directly to the supplier or drop ship partner. A robust fulfillment platform
like CommerceHub allows suppliers to accept returns and seamlessly notify the retailer
about the return. This way, all the retailer needs to do is worry about processing the
refund, the actual logistics of effecting the return gets handed off to their channel
partners.
5. Consider Setting up an Online Returns Management Portal
An emerging trend among many retailers these days is to not include a return shipping
label in the box, but have an online portal that manages all returns instead. A
centralized portal ensures a consistent, convenient user experience for shoppers. It
allows retailers to offer their shoppers more control over the returns process, as well as
a variety of return options – UPS, FedEx, USPS, return-to-store – to pick from.
Another perk is the flexibility to modify your returns policy without having to update the
same information on packing slips and inform suppliers and drop ship partners each
time. Depending on the SKU being returned, you can also direct the returns to be
shipped to a different store or warehouse location than the original source location of
the SKU.
A centralized online returns system also eliminates the possibility of drop ship suppliers
packing the wrong returns label with a particular SKU. Want to allow a user to exchange
an item for another one in your catalog? An online portal with live inventory feeds is
your easiest answer.
6. Offer Competitive Return Deadlines
If return policies matter so much to shoppers, retailers need to make it their business to
compete on flexible return deadlines. Ideally, your return deadlines should meet or
exceed Amazon’s 30-day returns policy. It’s also a good idea to specify separate
deadlines for New and Used items for certain product categories.
And you don’t need to worry about getting an avalanche of returns with longer deadlines
than before. Research shows that a longer return deadline actually decreases the rate
of returns. While it may seem counter intuitive initially, this phenomenon is explained by
what the researchers at the University of Texas call “the endowment effect”. They argue
that the longer the customer possesses an item, the more attached to it they get. This
makes it less likely for them to return the product to the retailer. Thank you, long return
deadlines!

7. Allow In-Store Returns
This is for all you omnichannel retailers out there. Why not have your customers come
straight to your own stores, instead of forcing them to trek to the nearest UPS or Fedex
store to return their purchase? 62% of shoppers are more likely to shop online if they
can return those items in-store.
Not only does that circumvent the cost of return shipping and the hassle of pre-paid
return shipping labels, it also offers you a chance to make an additional sale when the
customer is in-store making their return. According to the UPS Pulse of the Online
Shopper Study 2016, 70% of shoppers who return items in-store, make an
additional purchase when at the store.
Granted that in-store returns may not work for all product types, but it’s definitely a
valuable service to offer for most product categories.
8. Clarify Acceptable Return Conditions, Documentation Required
Different countries (even states) have their own laws governing product returns. Make
sure your policies have you covered for all the regions that you operate in.
Things like the condition in which you’ll accept a returned item (new, unused, with all
accessories?) or the paperwork that should accompany a returned item (Tags? Original
packaging? User manuals? Warranty cards? Invoices?) are typically essential to include
but easy to forget. This becomes even more important in case of certain product
categories like perishables, undergarments and the like.
9. Who Pays for Return Shipping?
It’s a best practice to cover return shipping on products that are eligible for
returns. Close to 75% of retailers will take care of return shipping costs for their
customers. So rest assured, you’ll be in good company.
You can offer customers the option of printing out a return shipping label from your
website or online returns portal. If for some reason, you choose to charge customers for
return shipping, remember to specify upfront how much return shipping will be.
While on the topic of shipping costs, it is helpful to clarify in your returns and refunds
policy whether you’ll be refunding the original shipping cost that the customer paid when
making the purchase.
10. Communicate Returns Policies Clearly
Having the best returns policy is of no use if shoppers are unable to see your policies
easily while they’re shopping. Make it a point to include returns policies in easily
findable locations on your product pages.

Include a page on your site that instructs shoppers how to get started with a product
return. This page will ideally have details about what items can be returned, what
number to call or link to access in order to initiate a return, which address to ship the
item back to, what documentation to include and every other detail that goes into
sending an item back to your warehouse in the easiest way possible.
Set expectations in advance by specifying the expected time it’ll take to process
refunds. While refund processing time depends on the payment method used, ideally
refunds processing should not take more than 14 business days. Clarify when you’ll
start processing the refund – as soon as the return is initiated? On receiving the
returned item at your warehouse?
Compete better by ensuring that the return policies on your website match or better
those offered by e-commerce leaders like Amazon and eBay. This gives you an edge
over them and, as we’ve seen earlier, flexible returns policies help, not harm e-
commerce revenues.
11. How About Product Exchanges?
Can items be exchanged? Not every customer is dissatisfied with their purchase.
Maybe they just want a different size or color of the product that they originally bought.
Fiscally, it’s a good idea to allow customers to exchange products. An exchange, while
being a type of return, impacts your balance sheet to a far lesser degree than an
outright return does.
Outline in simple language the process of effecting a product exchange. Will it be a
return, followed by a refund and a new purchase or a simultaneous process of return
and exchange, all carried out online? Whatever the case may be, spell it out in as many
words to potential shoppers.
12. Manage the Issue of Fraudulent Returns Delicately
Despite your best safeguards, the prospect of fraudulent returns is unavoidable. The
good news is that fraudulent returns account for a very small percentage of total returns
(about 3.5% of all returns) and can be kept under control with the right policies.
Retailers typically see instances of fraudulent returns on high value items. Charging a
small restocking fee for large, used, or high-value items is one way to discourage
fraudsters. Another option is to encourage shoppers to return the items in-store where
your staff can examine the item being returned before going ahead with the transaction.
Many retailers keep close tabs on their returns data to see if there are certain product
categories, customers or even specific stores that have higher return rates.

RETURNING TO RETURNS AND REFUNDS
It is understandable why retailers are terrified by the specter of returns and refunds. It is
an expensive, resource-intensive process, that eats into your profitability. But the
success of online retailers like Zappos and Warby Parker is testimony to the fact that a
smart, customer-friendly retail returns policy pays off in the long run.
E-commerce major Flipkart has tweaked its returns policy on most products,
saying that all sales will now be considered final, according to a report by The
Economic Times.
The move is likely to be popular with the vendors as it will help rein in operational
costs borneto return and refund for a particular product. However, it is likely to be
deemed highly inconvenient for customers who flock to e-commerce portals to
make their shopping (and returns, if needed) experience convenient.
According to the report, Flipkart has done away with return and refunds for most
of its productcategories, including, mobile accessories, office equipment, personal

care appliances, computer and camera accessories, and smart wearables. Refunds
have been stopped foritems such as mobile phones, furniture, and appliances too.
Flipkart said, "If a defect is determined within the 10-day period following
delivery/installation, a replacement of the same model will be provided at no
additional cost," the new policy says.
However, if there’s no defect confirmed within ten days of delivery, or if a
replacement has been provided, the customer will then be directed to the brand’s
service centre.
A Flipkart spokespersonsaid, "Flipkart has a customer-friendly refunds policy that
has benefited millions of our customers. Our customers can request for refunds
through the self-service option on over 1,150 productcategories of the 1,800
available, which constitutes about two-thirds of all categories on Flipkart. In
fact, Flipkart processes about25 thousand refunds on a daily basis, 60 percent of
which are instant, where customers don'thave to wait to get their money back.
Flipkart’s decision comes at a time when it is buying out ebay’s India operations
and is in the fray to acquire Snapdeal. It’s only formidable competitor in the
market would then be Amazon India. However, with tight return policies,
customers may chooseto migrate to Amazon India in the long run. Only time will
tell how this move with pan out for Flipkart.

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