Amazon slashes seller fees for low value goods
This marks Amazon's largest reduction in seller fees, primarily to strengthen itself against growing competition in the domestic ecommerce sector.
Ecommerce giant Amazon India has undertaken its highest-ever reduction in seller fees as it squares up for growing competition in the sector.
The company has introduced zero referral fees on over 1.2 crore products in the low-value category, i.e. less that Rs 300. This is expected to apply across 135 categories including fashion, jewellery, grocery, home, furnishings, kitchen, beauty, etc.
Referral fees refers to commission that sellers pay to Amazon for each product sold. The number was anywhere between 2% to 14.5% earlier. These changes are expected to come into effect from April 7, 2025, the company said in a press note.
These developments come as Amazon India sees growing competition from affordable ecommerce platform Meesho, which currently operates on a zero commission model. On top of this, growing popularity of quick commerce channels for categories beyond groceries also stands to take away share from ecommerce platforms.
"Our motive is simple: we are partners in success. When our sellers succeed, we succeed. Whenever we gain advantages in scale and infrastructure, we aim to pass those benefits back to our selling partners. As we have achieved cost efficiencies, we use that opportunity to support sellers in growing their businesses. That’s why we chose not to present this as a promotion," Amit Nanda, Director, Selling Partner Services, Amazon India told YourStory.
In a bid incentivise sellers for higher selling frequency, Amazon said that under the revised structure, sellers shipping more than one unit at a time stand to see up to 90% savings in selling fees on the second unit. The selling fees is a combination of all types of fees-referral fees, weight handling fees, closing fees, and others.
Amazon has also reduced the weight handling fees for lightweight items to Rs 17 for items under 1 kg. It has also added a simplified flat rate for sellers using external fulfilment channels like Easy Ship and Seller Flex with national shipping rates that start from Rs 65 instead of Rs 77 earlier.
"The two largest fees sellers incur are referral fees and shipping fees. There are some other small fees for additional services, but they are minimal. The referral and shipping fees account for more than 90-95% of the total fees charged to sellers," explained Nanda.
These developments come on the heels of Amazon initiating pilots for its quick commerce arm, Amazon Now, in Bengaluru. According to reports, the service plans to focus on beauty and home categories after building grocery and daily essentials.
Edited by Megha Reddy