Sources estimate that the drop in sales could be in the range of 30 to 40%.
Cloudtail was the biggest seller on Amazon and the online retailer shut it down after acquiring a 100% stake in its parent company Prione. Amazon was forced to shut down the seller because existing standards do not allow an entity operating an online marketplace and its group companies to own shares in a seller on the platform or control their inventory.
The biggest hurdle in transitioning to Rocket Kommerce has been brands’ inability to extend credit to the new seller.
Most business-to-business (B2B) transactions are credit-based, which means brands give sellers a few weeks of time to pay for goods sold.
“So what’s happening is a lot of sales are being blocked because management at the brand level is having trouble approving the credit limit,” a source said.
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ET reported on March 28 that Cloudtail had started distributing its sales volumes to new vendors like Cocoblue, VRP Telematics, and Rocket Kommerce.
Finance teams at major fast-moving consumer goods brands say new entities lack the clout to handle high-volume transactions, making them wary of issuing credit.
“Now Amazon doesn’t really have a role in any of these sellers,” the source said. “So brands are not willing to take risks because there is nowhere to go to solve the problem. That’s why things get a little tricky here.
Additionally, Rocket Kommerce reportedly delayed payments to some brands that issued credits.
Amazon India, Rocket Kommerce, Nestle and Dabur did not respond to questions from ET at press time Thursday.
“ITC Limited began working with RK World (parent company of Rocket Kommerce) in May 2022. The transition from Cloudtail to RK World is now complete and we are committed to growing our business in partnership with them,” a carrier said. speech.
Sellers told ET that many systems, processes, and required manpower are still not in place at the new seller, making it difficult to sell on Amazon.
“Category support, such as running a promotion or lightning deal, or requesting a price reduction, was much faster at Cloudtail; it takes a long time here because the technology and manpower haven’t been put in place yet,” said one salesperson.
Two sources told ET that Amazon has asked former Cloudtail employees to work with new sellers to improve operations and manage them during the transition. ET announced on April 25 that the company would absorb all former Cloudtail employees.
“While every seller has start-up issues, Rocket Kommerce is critical as it handles the most important categories,” a source said.
Most FMCG brands were invited to sell through Rocket Kommerce. Two sellers told ET that they anticipated some of these challenges, but expect them to be resolved soon.