In May 2023, the Otto Group was still pleased to have 6,500 connected third-party retailers. Sales had also increased by a full 50% at that time. But after just a few months, the situation for the trading marketplace changed, reports Handelsblatt.
It all started in March, when CEO Bodo Kipper left the company because of “differences in opinion over the strategic direction.” This was followed by drastic fee increases and terminations of marketplace partners.
An Otto spokesperson also confirmed to Handelsblatt: “Around 500 partners have terminated their contracts themselves following adjustments to the usage fees and the associated increase in the basic fee including commissions.”
According to marketplace expert Mark Steier, 1,178 dealer accounts were deleted on Otto.de between April and August 2024. This corresponds to more than a sixth of the 6,500 partners still celebrated in 2023. There are different reports on the terminations: While the company said it had terminated around 150 partners since June due to violations, dealers report terminations that began as early as March.
“To this day, we cannot explain what we could have done wrong,” said a terminated retailer to Handelsblatt. The terminations were unexpected, especially given the high investment costs (10,000 euros for onboarding, a five-figure sum for the software). According to lawyer Lars Maritzen, Otto has so far rejected mediation between the company and partners.
New board and new fees
In addition to the loss of retailers, sales have also recently declined: the sales that Otto itself makes via the platform have fallen by 4.7% to 6.2 billion euros. The increased commissions of the marketplace retailers are already included in this. The basic fee for retailers also recently rose from 39.90 to 99.90 euros. By comparison: Amazon charges a monthly fee of 39 euros, Zalando and Ebay start at 40 euros.
It remains to be seen whether the change in management in May will bring about change. Boris Ewenstein, who previously worked at McKinsey and Zalando, will now be responsible for the retail and marketplace business and will bring it back on track for growth. However, an open dispute with the most important retail partners is not a good prerequisite for this, according to Handelsblatt.
