When a battalion of IT channel partners pan India have been raising arms against ecommerce portals selling IT products at not only at competitive rates but below MOP, there is a man sitting quietly in northern hub of West Bengal’s Siliguri market observing the drama with a sarcastic smile on his face. Soumen Roy of Swastik Infotech owner of an IT retail counter on Bimal Sinha Sarani has been planting seeds on his grey matter to emulate the business policy adopted by the online portals, rather a bit more smartly.
What exactly do these Flipkarts and Snapdeals do that’s hampering partners’ sleep for over a year now? Well, their business funda seems simple. Purchase laptops, mobile, pendrives, hard drives, storage device et al from vendors and sell them below the MOP to catch the buyer’s online traffic and exercise mass scale buy out. But how are they generating revenue if they are following such a predatory pricing policy, impossible so far, for any partner to understand or execute? Well, the higher the traffic generated on the site, the greater is the brand equity value of the site resulting in IT vendors spending fat cash amount on advertorials. This makes up for the lost margins on the consumer goods. Apparently channel partners have also been approached by the aforesaid etailers to place their product on online store and avail the upcoming online trend. Many partners have even fallen into the trap resulting in incurring huge losses and the smart online retailers who keep poor credit cycle and don’t pay arrears if the partner makes a wish to stop his association with the portal.
So coming back to what was the startling revelation of this story is the manner in which Soumen Roy took inspiration from these e-portals in a physical channel ecosystem of Siliguri. What he did was simple. Roy purchased products on credit from reliable partners, for instance, a laptop worth Rs. 19,000 and sold it to a consumer at undercutting, say at Rs. 17000. The customer obviously is overwhelmed by this one of a kind offer. From Rs. 17000 that Soumen earned (actually at a loss), he paid the partner Rs. 10,000 promising to pay the rest in a month or two. Initially the partners were happy and Soumen followed the same policy with other partners. The cycle kept on rolling with bulk products being bought on credit from partners and sold at below MOP rates with the channel partner receiving only half the amount. The credit kept on rolling and the gap kept on widening.
On a recent visit to Siliguri visit, a partner named Kunal Pal of Computer Essential calls himself to be victimized by the Soumen’s entangles. Pal says that Roy used to make payments (ofcourse lower payments that the actual rate of the products he took) regularly till September 2014. It was only from mid September 2014 that he stopped all payments resulting in a mounting amount of Rs.19 lakhs that Pal is due to receive. He has lodged a case with the local court to seek justice. As per 33 year old Pal, there are 10 to 12 such partners in Siliguri who have fallen into Soumen’s trap. Outside Siliguri market, Malda and Kolkata have also been Soumen’s target hit.