Amazon scraps referral fee for sellers on products below ₹300
What's the story
Amazon India has announced that it will be removing its referral fee for sellers on products priced below ₹300.
The move is expected to benefit over 1.5 crore goods across 135 categories, a senior executive at the company said.
Until now, Amazon used to charge a referral fee of 2-4% on each product sold on its platform.
Shipping costs
Reduced shipping charges and handling fees
In a bid to further support its sellers, Amazon has slashed its national shipping charges by nearly 16%.
The revised fee for sellers using Amazon's external fulfillment channels such as Easy Ship and Seller Flex, has been reduced from ₹77 to ₹65 per order.
The company has also reduced weight handling fees for lightweight items under 1kg by up to ₹17.
Impact
Amazon's changes to benefit sellers significantly
Amit Nanda, Director of Selling Partner Services at Amazon India, emphasized the major impact of these changes.
He gave an example where a product such as shorts worth ₹299 would have drawn ₹130 in fees earlier, but now only draws a fee of ₹70.
Additionally, he said sellers selling more than one unit at a time could see over 90% savings in selling fees on the second unit due to these changes.
Future plans
Long-term growth strategy
Despite not being sure how reduced fees would affect Amazon's revenues in India, the company's management is hopeful.
Nanda said, "We are a long-term focused organization. We are confident that this decision will be better for us in the long-run, including on our bottom line as well."
He added Amazon has achieved efficiency of scale and is passing on these benefits to its sellers.
Revenue growth
Amazon's financial performance in India
Amazon Seller Services, the e-commerce giant's marketplace arm in India, saw a 14% rise in operating revenue at ₹25,406 crore in FY24, financial data accessed by Tofler showed.
This was attributed to enhanced operational efficiencies in a changing e-commerce landscape.
The company also reduced its net loss by 29% to ₹3,470 crore during the period.