ShopClues offers 80% of pending payment in advance to sellers
The company has been in recent controversy as one of the co-founders has filed a complaint against existing management of the company claiming that his voting rights were wrongfully taken away by the other two co-founders.
Gurgaon-based online marketplace ShopClues has launched an 'Express Payout' service, which will allow merchants to get up to 80 percent of their pending payment in advance.
Ganesh Balakrishnan of Shopclues said, “We have about half a million sellers, 80 percent of whom are MSMEs from Tier II and III cities and towns. A majority of the merchants on the platform sell unbranded products and usually are in need of regular cash flow to keep their business running. Through Express Payout we can provide these merchants access to working capital to ease their daily business requirements.”
In last three weeks, it claims to have catered to over 2,000 payout requests.
Most online companies such as Flipkart, Snapdeal, Amazon and Shopclues take about 7-15 days to settle payments for sellers. Once an item has been sold, the money moves from a customer's account to the account of a marketplace, which deducts a commission and passes the rest of the payment to a seller. Sellers claim elongated periods of settlement make it difficult for them as they run out of cash flows.
"Even though RBI has mandated a three-day settlement for online payments, most marketplaces take much more time. It reduces our operating capital and impacts business," a seller from the All India Online Vendors Association, told Moneycontrol on condition of anonymity.
The service aims to benefit any merchant who requires advance payment before the scheduled payment date. The merchants can choose to receive any amount up to 80 percent of their due payment with a small service charge. The requested payment is processed within eight hours, as claimed by the company.Started in 2011, Shopclues claims to have 5 crore listed products and over 5 lakh merchants. The company has been in recent controversy as one of the co-founders has filed a complaint against existing management of the company claiming that his voting rights were wrongfully taken away by the other two co-founders.