Amazon India Reduces Its Seller Fees In A Bid To Attract More Sellers!
Recently, the cost of doing business at Amazon has increased, and sellers had agitated against the move
In a bid to give Flipkart a tougher fight, Amazon India has made some changes to its seller policy to encourage more sellers to join Amazon. The new changes will come with a reduction in the various fees Amazon charges. The seller fees in multiple segments have been modified, and the changes will be effective from April 19.
As Amazon is ramping up its hyperlocal grocery business, the seller fees are nearly reduced by 70 percent in the categories like groceries, daily needs and apparel. Though, at the same time, it has increased the fees up to 50 percent for items like power banks, chargers, backpacks and shoes.
Targeting Sellers From Smaller Towns & Rural Areas
Recently, the cost of doing business at Amazon has increased, and sellers had agitated against the move. Last year Amazon also started to levy a distance-based fee under its programme GoLocal for the distant sellers. But under the new policy, Amazon has decreased the referral fees in over 30 categories.
Several new sellers on Amazon are from smaller towns and semi-urban areas serving a national customer base. To offer choice and flexibility to the distant sellers and serve the growing national demand, Amazon India has strategically redesigned seller fee structure.
Now the e-commerce company offers three shipping modules for sellers. In the local option, a vendor can now sell the products locally in the seller city. While the regional category and national category has predefined set of cities or states in four modules and across regions nationwide respectively. In the new move, sellers will be made to focus on local markets to deliver products cheaper and faster.
Reduced Seller Fees: Focus On Grocery, Daily Needs & Fashion
The company recently launched its grocery business in the country and plans to make it big at the national level. To push the groceries and daily need items, the seller fees have been drastically reduced to take on Big Basket, Grofers and Flipkart who is all set to enter the space soon.
Amazon India is giving a push to its fashion category as well. It has reduced the seller fees to 17 percent, where Amazon evidently lags behind Flipkart (with Myntra and Jabong).
The Growing Competition
Both Flipkart and Amazon have kept making changes to its fees in different categories in the last couple of years so as to not lose merchants to each other. Amidst Flipkart and Amazon’s fighting, Paytm has successfully built a massive seller base of its own.
Last year Flipkart also lowered its fees by 5 percent for the items priced below Rs. 300 in multiple categories. Also, the settlement for payments was reduced by two days for the sellers in the silver category. Amazon India at present boasts a base of 3 lakh sellers who sell over 160 million products across 104 categories.
As Flipkart lowered the commission to encourage sellers to sell products at a lower price, Amazon similarly wants its sellers to sell their products at lower rates. The company also lowered the fixed closing fees with a cut in the shipping fee within city limits to boost local sales.
As Flipkart is getting ready for a big offline venture with world’s largest retailer Walmart, it remains to be seen if the new changes can impact more sellers on Amazon India, as the fight for the number one spot intensifies day by day!