Few things to know about E-Commerce Operators

E-Commerce Operators:

Electronic Commerce operator is a person who owns, operates or manages the digital or electronic facility or platform for electronic commerce. Eg: Amazon, Flipkart, etc Initially, E-Commerce operators faced a criticism about their product quality, payment security, and purchase returns/exchanges. But over a decade, it was identified as a most profitable business for the entrepreneurs. Followed by e-commerce, there are certain other platforms like M-Commerce (Mobile Commerce), F-Commerce (Facebook Commerce) etc coming up with a wide scope for startups.

How does an E-Commerce Operator work?

It is quite interesting to know how these operators manage their business. E-Commerce is one of the most innovative businesses happened in this century. The operators simply use their website to run their business with very fewer resources. Generally, this business will neither have a great headcount nor a big warehouses and that’s the beauty of the innovation. The critical resources for an e-commerce operator would be a web server, a database, and a dispatch team. There are few operators like e-bay who are managing their businesses in a traditional way of dispatch system (through a local post office) without a huge database. As a purchaser, we would place an order for the required product on the website. The website communicates with the server and order manager over the internet to find out whether the product is available. Depending upon the availability of the product, the stock database suggests the expected date of delivery. Later the server communicates with the Merchant banker facilitating the online payment or simply to the order confirmation page if the payment mode is cash on delivery. Further, the order manager requests the warehouse & dispatch team to deliver the product.

Impact of Indian Taxation on E-Commerce Business:

1. An E-commerce operator shall get himself registered under GST irrespective of his threshold limit however subjected to few exemptions.

2. An e-commerce operator is required to collect tax @ 1% (TCS) on the net value of taxable supplies.

3. An e-commerce operator is not allowed to opt for a composition scheme under the GST regime.

4. The cost of GST compliance would be another Challenge for small-scale operators as it requires registration in each state as a separate entity.

Business advantages for Indian E-Commerce Operators :

The government of India has initiated a Digital India through Demonetization. This move drove the start-ups increasing the exposure for digital money & commerce. The e-commerce market has been doubled post demonetization & resulted in a great internet penetration for the e-wallets. The e-tail (e-retail) market experienced a growth of 65% in 2018.

Conclusion: E-Commerce is not just about having an online store. It is something beyond that to survive through the tough competition.

Disclaimer: The above information as per my knowledge and kindly avoid the controversies. We value your comments, suggestions, and feedback