Amazon India hikes seller commission, move could impact final price of products

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Sellers on e-commerce giant Amazon India will have to shell out more commission to list their products on the website, with Amazon hiking its seller commission by 50 to 100 per cent. The new rates will be effective from May 18, even as sellers term it an noncompetitive move.

Amazon-India
Products on Amazon might become costlier following the decision to revise seller commission fee.

Amazon had increased the commission percentage just last year, with the previous hike being 9 per cent.

What this essentially means is that sellers will have to pay Amazon an additional percentage, diluting their profits. For the regular shopper, the move could result in them paying more for a particular product, with sellers looking to pass this burden onto them.

Under the commission system, Amazon charges a specific fee towards selling a product on its website. This move would help increase overall revenues, as it looks to dethrone Flipkart as the largest e-commerce website in India.

Product Existing commission New commission
Health and personal care 5% 7.5%
Books 12% 13%
Music and video games 5% 8%
Beauty (Fragrance) and luxury beauty 12% 14%
Handbags 11% 12.5%
Apparel 13-17 % 15 -19.5%
TVs, cameras, speakers 4% 6%

Rates vary according to the category under which a seller lists the product. Amazon currently has close to 100 categories under which sellers can display and sell their products.

While Amazon has hiked the rates for almost all categories, it has maintained it for personal care appliances (7 per cent), consumable electronic and physical gift cards (4, 5 per cent), and shoes (13 per cent). It has also reduced the commission for products like home improvement appliances, gold coins, backpacks, musical instruments, etc.

The All India Online Vendors’ Association is against this move, taking it up with the Competition Commission of India (CCI).

In addition to the commission, Amazon will also charge a higher amount towards weight handling fee. It previously charged Rs.30 for products weighing up to 500 grams. Sellers will now have to pay Rs.43 per 500 grams.

In case of the seller cancelling a particular order, Amazon will charge them a cancellation charge of 8.5 per cent, up from the previous charge of 2.5 per cent.

Amazon India has over 1.7 lakh sellers on its platform, with these new charges likely to make products costlier by around Rs.25 to Rs.50 on average.

Read more: New Amazon warehouses to create 1,200 jobs

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