Early Fes­ti­val for Ama­zon Sell­ers as Fees and Stor­age Charges Cut

Ecom­merce gi­ant has also slashed the rates of its ‘Go Lo­cal’ programme by at least 20%

The Economic Times - - Disruption: Startups & Tech - Var­sha.Bansal @times­group.com

Ben­galuru: On­line re­tailer Ama­zon In­dia has slashed seller fees in five cat­e­gories and re­duced stor­age charges to en­cour­age ven­dors to stock more prod­ucts ahead of the fes­tive season sales in Oc­to­ber. Ama­zon has low­ered the com­mis­sion sell­ers have to pay it by up to 2% in cat­e­gories such as ap­parel, home and elec­tronic ac­ces­sories, which the com­pany has found to be pop­u­lar dur­ing the fes­tive season.

The ecom­merce gi­ant has also re­duced the clos­ing fee for sell­ers who use its ful­fill­ment cen­tres to store prod­ucts. Ad­di­tion­ally, to en­able more sell­ers to place their in­ven­tory closer to their cus­tomers, Ama­zon In­dia has slashed the rates of its ‘Go Lo­cal’ programme by at least 20%.

Th­ese changes, among sev­eral oth­ers, are aimed at help­ing sell­ers store their in­ven­tory closer to the cus­tomer, which trans­lates into faster de­liv­er­ies. More­over, the drop in the seller fees in cat­e­gories such as ap­parel means ven­dors can stock more prod­ucts and of­fer a wider se­lec­tion.

“Th­ese fee changes should re­duce the cost of op­er­a­tion for the sell­ers so that they can of­fer a wide range of

prod­ucts at com­pet­i­tive prices to the cus­tomers,” Gopal Pil­lai, gen­eral man­ager of seller ser­vices at Ama­zon In­dia, told ET. “Across the board, we are look­ing at ev­ery­thing from the seller’s per­spec­tive and pass­ing on our ben­e­fits of scale and lever­age to the seller.”

With cur­rently over 3,80,000 sell­ers on its mar­ket­place of­fer­ing more than 170 mil­lion prod­ucts, Ama­zon In­dia is wit­ness­ing an ad­di­tion of 3,000 sell­ers ev­ery week as the com­pany inches closer to its flag­ship sale next month.

But even as the ecom­merce gi­ant tries to in­cen­tivise mer­chants, a group of on­line sell­ers is in the process of fil­ing a case against Ama­zon In­dia al­leg­ing ‘pref­er­en­tial treat­ment’ to­wards some larger sell­ers such as Cloud­tail and Ap­pario.

The suit, by the All In­dia On­line Ven­dors As­so­ci­a­tion (AIOVA) that rep­re­sents over 3,500 ven­dors, will also seek a re­stric­tion against such large sell­ers from par­tak­ing in the fes­tive season sale, ET has learnt from a mem­ber of the as­so­ci­a­tion.

AIOVA re­cently ap­proached the Com­pe­ti­tion Com­mis­sion of In­dia (CCI) re­quest­ing it to re­strict large sell­ers such as Re­tail Net and Om­nitech Re­tail on Flip­kart from par­tic­i­pat­ing in the Indian on­line mar­ket­place’s up­com­ing fes­tive sales, as re­ported by ET.

Both Ama­zon In­dia and Flip­kart have tweaked seller com­mis­sions mul­ti­ple times this year.

Ama­zon In­dia in June low­ered its seller fees in cat­e­gories such as fur­ni­ture and lug­gage. In April, Ama­zon changed its seller fee struc­ture to mak­ing it cheaper for ven­dors to ship lo­cally.

Flip­kart slashed seller com­mis­sions in lower-priced prod­ucts in Au­gust. Prior to that, in April, it low­ered com­mis­sions in the books and ap­parel cat­e­gories.

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