The fine-tuning of seller commissions is an exercise carried out by e-commerce firm Amazon is done twice a year. It helps the company incentivize sellers in specific product segments that Amazon wants to sell more or to reduce the commissions where it is not keen on pushing to the customers on its platform. Amazon India has now revamped seller commissions for nearly half of its product categories in a bid to rationalise costs, improve margins and incentivise high-growth categories, reports Economic Times.
Now in this round, effective May 23, giving a month’s notice, sellers of watches, luggage, shoes, beauty products and mobile phones can expect a shell out a higher commission than what they are enjoying right now while those selling home furnishing, sports items, fashion jewellery, handbags and musical instruments etc. will enjoy a lower fee to be paid. Since the categories are enormous, one can take that the difference either way must be between 0.5 and 2% on an average.
The ostensible reason advanced by the company for making these changes in the fee structure is to bring down the subsidy outgoes, rationalization of costs being incurred on different product categories and of course to explore possibilities of enhancing the margins being earned. Amazon claims it looks at different aspects like changes in the business scenario and uses feedback etc. to come to decisions on the charges every now and then.
There are also special charges collected by Amazon from sellers: One involves an extra fee for listing in the lightning deals. This is due to a large number of customers visiting that page. Then, there is a listing fee charged if a seller has listed more than 100,000 items on Amazon.
For the record, Amazon has over 4.5 lakh sellers and the number of items listed by these sellers on the ecommerce site is a staggering 170 million.
Where Amazon handles the back-end operations, like packaging, warehousing, delivery etc., charges are collected from the sellers. These are clubbed together and called Fulfilment by Amazon and Easy Ship. If the value of an item sold is higher than Rs 20,000 then this fee is waived.
Rival Flipkart too, makes such changes and sellers on both platforms generally resent these decisions, calling them arbitrary, without any advance intimation. But sellers usually are assured by companies of huge volumes in business without their having to make any effort at selling their products.