E-commerce Giant’s Fee Restructuring to Impact Various Categories, Prompting Costlier Products
In a significant move, Amazon India has notified its sellers about impending changes to its fee structures starting April 7, potentially leading to higher costs across several product categories.
According to a report by Moneycontrol, the revised fee structure encompasses alterations in various item categories, long-term storage fees, and refund fees. It’s important to note that these fee adjustments do not include the 18% Goods and Services Tax (GST) applicable to the seller fee.
Currently, sellers on Amazon pay fees covering inventory storage, technology, shipping, returns, and a seller fee for each product sold through the platform.
An Amazon India spokesperson stated, “We recognize seller fees and incentives as strong long-term levers that will help sustain a robust thriving marketplace, focused on digitizing small and medium businesses in the country and enabling them to grow into strong national brands. These changes reflect our commitment to make Amazon.in one of the most preferred marketplaces for selling in India and creating right choices for sellers to grow efficiently.”
Categories such as home improvement, luxury beauty, and sleepwear are expected to witness significant increases in seller fees. For instance, fees for home improvement will rise from 9% to 13.5%, while luxury beauty fees will transition from a flat 5% to a tiered system reaching up to 10%. Sleepwear fees are set to increase from 11-15% to 13.5-19%.
Conversely, some categories will experience fee reductions. For example, inverter and battery fees will decrease from 5-5.5% to 4.5%, and baby apparel fees will decrease from 11-21% to 11-20%.
This adjustment in seller fees will have implications for major companies such as Mamaearth and BoAt, both heavily reliant on e-commerce platforms for sales. For Mamaearth, fees for products like face washes and moisturizers are set to increase significantly.
Additionally, Amazon has decided to eliminate its Zero Fee fulfillment policy, introducing weight handling shipping fees for standard-sized shipments priced over INR 20,000 starting April 30, 2024.
Amidst these changes, Amazon is reportedly preparing to launch its new vertical, Amazon Bazaar, which will feature budget-friendly, unbranded fashion and lifestyle products priced below INR 600. This move follows Amazon’s recent foray into the logistics business in India with Amazon Shipping, aiming to handle non-Amazon orders through collaborations with direct-to-consumer brands and logistics aggregators.
This fee restructuring by Amazon India is poised to reshape the dynamics of e-commerce in the country, potentially leading to increased prices for consumers across various product categories.
