Between April and August 2024, Otto.de saw 1,178 seller accounts disappear, a 17% drop. Rising fees led 500 partners to quit, while Otto terminated 150 more over alleged violations. The company's own revenue fell by 4.7% to $6.5B, pressured by rivals like Temu.
In just five months, Otto.de lost 1,178 seller accounts, according to the "Handelsblatt." This amounts to more than a sixth of its 6,500 external sellers. The company confirmed a significant drop but disputed the exact figures. The exodus is largely attributed to increased fees and contract terminations, leading to a massive shake-up on the platform.
The Otto Group recently increased fees for sellers, causing unrest. Over 500 sellers chose to leave voluntarily after the fee adjustments, including higher base charges and commissions. A company spokesperson explained that these adjustments were necessary, although they directly contributed to the loss of numerous sellers.
In addition to voluntary exits, Otto terminated the contracts of 150 sellers for alleged breaches. The "Handelsblatt" reported a wave of terminations beginning in March 2024. While Otto cited contract violations, affected sellers received no specific reasons for their dismissal, raising concerns about the company's transparency.
The shrinking number of sellers coincides with Otto's declining revenue, which fell by 4.7% to $6.5B in the last fiscal year. The company is facing stiff competition from Chinese e-commerce giants like Temu and Shein. According to "Die Welt," the growth of Otto's marketplace may be cannibalizing its own retail operations, exacerbating the financial strain.
Will Otto's fee hikes and terminations backfire?
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