Amazon India Cuts Referral Fee On Products Under INR 300

At a time when retailers are charging various platform-related fees to consumers and sellers to make their businesses profitable, Amazon India has reduced referral fees to zero on more than 12 Mn (1.2 Cr) products priced below INR 300. 

The revised fees will come into effect from April 7.

The company claims that it is its higher-ever reduction in seller fees, aimed at boosting seller growth on its platform and supporting lakhs of small businesses across the country. 

Referral fees is a commission that sellers pay to Amazon for each product sold. The zero referral fees apply to more than 135 product categories, including home decor, grocery, jewellery, apparel and shoes, among others on the platform. A referral fee of 2-4% was charged earlier on each product.

“At Amazon India, we are committed to enabling the growth of all sellers because we strongly believe that our success lies in their success. By eliminating referral fees on crores of products and reducing shipping costs, we’re making it more lucrative for sellers to sell on Amazon.in,” said Amit Nanda, director, selling partner services, Amazon India.

Flat Rates And Cut In Weight Handling Fees : The company has also announced a simplified flat rate for sellers using external fulfilment channels like Easy Ship and Seller Flex, with national shipping rates now starting at INR 65, down from INR 77, marking a 16% reduction.

While Easy Ship is a fulfilment channel where Amazon collects packages from a seller’s location and delivers them to customers, as part of Seller Flex, Amazon manages a portion of the sellers’ warehouse as an Amazon fulfilment centre.

Additionally, the company has reduced the weight handling fees for lightweight items under 1 kg by up to INR 17, lowering the overall fees that sellers pay to Amazon. Sellers shipping more than one product unit at a time stand to see up to 90% savings in selling fees on the second unit. These changes will enable sellers to offer a wider selection, and competitive offers and grow their business. 

“This initiative supports seller growth on Amazon by enabling them to offer a wider selection and present more competitive offers to customers, particularly on everyday low-value items. As we gain efficiencies in our operations, we ensure those benefits reach our sellers and customers,” Nanda added.

Amazon’s Support To Small Businesses Growth Continues: This is the second reduction in the last eight months. In September last year, Amazon India announced a reduction in its selling fees – ranging from 3 to 12% – for 59 product categories on the marketplace. These fee reductions are part of Amazon’s ongoing commitment to supporting the growth of small and medium businesses across India.

Amazon India’s introduction of zero referral charges also comes weeks after the company announced revamping the business model of its refurbished products platform Renewed to improve service quality. Rejecting reports of shutdown of Renewed, Amazon India then said that it will discontinue sales of externally refurbished products on the platform.

Recently, the Bureau of Indian Standards (BIS) also conducted “search and seizure operations” at multiple warehouses of ecommerce platforms, including Amazon and Flipkart. The BIS said in a statement that the searches, which spanned cities like Lucknow, Gurugram and Delhi, were undertaken for the purpose of curbing sale of “non-certified and potentially unsafe products”.

The bureau also seized thousands of products that lacked mandatory BIS certification, raising concerns over consumer safety. Not just this, the certification body also said that it has initiated legal action under BIS Act, 2016 to “hold the responsible entities accountable”.

On the financial side, Amazon Seller Services, which operates the marketplace business of Amazon India, reported a 14.4% jump in its operating revenue, which stood at INR 25,406 Cr in FY24 as against INR 22,198 Cr in FY23.

Meanwhile, its net loss narrowed 28.5% to INR 3,469.50 Cr in the year under review from INR 4,854.1 Cr in the previous fiscal year.

Given the current scheme of things, the Indian ecommerce market is expected to breach the $400 Bn mark by 2030, and a brigade of more than 500 Mn online shoppers is expected to drive this growth.