Why You Should Think Twice Before Buying from Major Marketplaces Like Myntra, Ajio, Nykaa, Flipkart, or Amazon

In today's digital age, online shopping has become the norm. Marketplaces like Myntra, Ajio, Nykaa, Flipkart, and Amazon have made it incredibly easy to browse and buy products with just a few clicks. However, there's a critical aspect of these platforms that many consumers overlook: they are not the creators or manufacturers of the products they sell. These marketplaces act as intermediaries, taking a commission from the original brands to sell their products on their vast platforms. While this may seem like a convenient setup for consumers, it often comes at a significant cost to small and medium-sized businesses.

The Struggles of Small and Mid-Sized Businesses

Many small and mid-sized businesses start with a dream—a vision to bring something unique to the market. However, the journey from concept to creation is fraught with challenges and expenses. Let’s break down the process:

• Renting a Place: The business owner starts by renting a space, whether it’s a small store or a workshop, and immediately begins paying rent.

• Registering the Business: Next, they must register the firm or company, which involves paying government fees and hiring a Chartered Accountant (CA).

• Applying for a Trademark: To protect their brand, they must apply for a trademark, which requires additional government fees and legal expenses.

• Hiring Staff: Finally, they hire staff or workers, adding the burden of monthly salaries.

At this stage, the business is ready to sell its product. They have two primary channels to consider: selling through their own website or social media, or listing their products on a marketplace. However, both options come with significant challenges.

The Marketplace Dilemma

For many new businesses, the thought of managing marketing expenses can be overwhelming. As a result, they often opt to start selling through a marketplace. The initial orders bring joy and hope, but over time, the reality sets in: these marketplaces are not vendor-friendly or profitable enough to sustain or scale a business. The high commissions and competitive pricing pressures can quickly eat into the profits, leaving the business owner struggling to break even.

The Move to Direct Sales

Realizing the limitations of marketplaces, many businesses start planning to sell directly through their website or social media channels. But this shift comes with its own set of challenges:

• Marketing Expenses: The business must now start paying a monthly fee to a marketing agency or freelancer to drive traffic to their site.

• Advertising Costs: They must invest in ads on Google, Facebook, or other platforms to reach potential customers.

• Marketplace Ads: Ironically, even though they aren’t getting enough orders through the marketplace, they may still need to pay for ads on these platforms to increase visibility.

The Harsh Reality

After a few months or years, many businesses find themselves in a difficult position—trying to survive, grow, and navigate the complexities of running a business. Unfortunately, more than 50% of these businesses close their doors, not because their products aren’t good enough, but because of a lack of experience, knowledge, and the unsustainable costs associated with running a business in today's market.

For those that survive, the struggle continues. They might seek funding from banks, Non-Banking Financial Companies (NBFCs), or through revenue-sharing models. It’s only at this stage that many business owners realize the importance of financial literacy—understanding balance sheets, profit-loss accounts, and other financial terms, which are crucial for the survival of any business.

Why You Should Buy Directly from Small Businesses

So, why should you avoid buying from major marketplaces? The answer is simple: to support small businesses. When you buy directly from a small business, you’re cutting out the middleman and ensuring that the creator or manufacturer receives the full value of their hard work. The product, seller, and quality remain the same; the only difference is that you might need to put in a little extra effort to find their website or social media channels. In most cases, you’ll even receive better and more personalized service.

While buying from small businesses offers many benefits, there are some challenges you might encounter:

• Delivery & Logistics: Unlike large marketplaces with dedicated in-house logistics that enable one day or express delivery, smaller businesses may not offer the same speedy shipping options.

• Customer Support: Response times may be slower compared to the quick and organized support provided by major marketplaces.

• Trust & Security: With the prevalence of online fraud and counterfeit products, it can be difficult to trust unfamiliar or new brands.

This article is not about being anti-corporation or anti-multinational, but about raising awareness. By choosing to buy directly from small businesses, you’re helping them sustain and grow in a highly competitive market. Your support can make a significant difference in their journey, turning dreams into reality.