Amazon India to revise seller fee from April 7, could lead to higher prices

Mmazon India, in a recent notification, informed that it is tweaking its seller fee for most categories and products from April 7, 2024. The revised structure is expected to result in price increases for several items sold on the platform.

A seller currently pays a fee to Amazon – including charges for inventory storage, technology, shipping, returns, and a seller fee – each time an item is sold on the e-commerce portal.

The company notification stated that the revised fee structure encompasses changes in several categories of items, long-term storage fees, and refund fees. It’s important to note that these fee increases do not include the 18 percent Goods and Services Tax (GST) that will be levied on the seller fee.

Moneycontrol has seen a copy of the communication to sellers.

Home improvement (from 9 percent to 13.5 percent), luxury beauty (from a flat 5 percent to a tiered system that goes up to 10 percent), and sleepwear (from 11-15 percent to 13.5-19 percent) were among the categories that saw the steepest increase in seller fee. Musical instruments (from 7.5 percent to 10.5 percent) and flipflops (from 10-12.5 percent to 13-15 percent) are the other categories for which the seller fee has been marked up.

This move could also mean that large companies like Mamaearth, Boat and others, who get a bulk of their sales from e-commerce marketplaces like Amazon, will be subject to higher seller fee.

While certain categories saw fee increases, the e-commerce giant also reduced fees for categories such as inverter and batteries (from 5-5.5 percent to 4.5 percent), Apparel – Baby (from 11-21 percent to 11-20 percent), and a few others.

Amazon has also removed Zero Fee fulfilment policy which essentially means a weight handling shipping fee will be charged for standard-sized shipments priced over Rs 20,000 effective from April 30, 2024.

The company did not immediately respond to Moneycontrol’s queries. The exercise is typically an annual exercise and the last revision came in May 2023.

The seller fee revision comes at a time when the Seattle-based tech titan is gearing up to launch Amazon Bazaar, a low-price segment that will cater to value customers. The launch will mean Amazon will take on SoftBank-backed Meesho which collects no commission from sellers and instead earns through ads and other services.

Analysts at Bernstein, in January, said that Meesho has been making gains and “Amazon India growth lags as Tier 2+ users drive 80 percent of e-commerce.”