Amazon India revises commission rates for third-party sellers

Amazon has increased commission fee in categories such as electronics, reducing it in others like large appliances


A file photo of an Amazon India warehouse in Sonipat, Haryana. Photo: Ramesh Pathania/Mint
A file photo of an Amazon India warehouse in Sonipat, Haryana. Photo: Ramesh Pathania/Mint

Bengaluru: Amazon India has raised commission rates for sellers in certain categories such as consumer electronic devices, while reducing fees in others such as large appliances, after a festive season showdown with local rival Flipkart.

Amazon raised the fees for sellers on its marketplace platform in categories such as automotive accessories, mobile phone covers and cases, desktop computers and laptop batteries, and reduced the commission rates in categories such as furniture and kitchen appliances.

An Amazon India spokeswoman confirmed that the company had revised commission rates for sellers.

“We always work backwards from seller needs and continually explore opportunities to support the growth of sellers in the emerging digital economy. As part of our fee revision, we have reduced fees and shipping rates on some popular categories, while increasing fees on certain others. We have reduced fees for popular categories like small appliances. Fulfilment fees that sellers incur to get their items shipped are also being reduced for oversize and heavy categories like furniture, large appliances, kitchen appliances and many more for both of our fulfilment channels—FBA and Easy Ship,” an Amazon India spokeswoman said in an email to Mint.

Amazon.com Inc. currently has over 120,000 sellers on its platform in India.

Earlier this year, local rival Flipkart changed its policy toward third-party sellers on its platform, charging higher commission rates in key categories, passing on costs of product returns to sellers and encouraging them to use its logistics service, as part of an effort to improve its customer service and brand, Mint had reported in June.

Flipkart had told more than 90,000 of its sellers that it will charge higher commissions in categories such as fashion and that sellers will have to bear the full cost of product returns.

“In line with Amazon.in’s constant endeavour to transform the way India buys and sells, all our seller enablement initiatives such as Seller Cafes, Seller Lending, Amazon Connect, EasyShip, Fulfilment by Amazon etc. to name a few are committed to connecting an ever-greater number of sellers to customers, to achieve the widest possible selection available to them while at same time offering pan India and even global market access to our sellers,” said the Amazon spokeswoman.

Amazon had also revised seller commissions earlier this year in June and said that the fee revision was undertaken “to encourage seller performance and growth so as to serve customers better”.

Flipkart, Amazon and Snapdeal operate as marketplaces, charging commission fees and other charges for connecting customers with third-party sellers.

Amazon India generates sales in three ways—providing services to third-party sellers; providing marketing services to other Amazon-controlled firms; and, wholesaling of Kindle e-book readers and accessories.

Last week, Amazon India had indicated that its India investments are starting to show results despite being at an early stage and would impact international margins as it plans to go all-out to conquer the all-important internet market, amid a bruising battle with local rival Flipkart.

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