The idea is to make it cheaper for sellers to ship locally so as to increase delivery speed and induce more customer buying.

Amazon reduces selling fee by up to 70 pc in some categories to encourage sellers
Atom Ecommerce Monday, March 19, 2018 - 18:18
Written by  S. Mahadevan

If you thought only buyers benefit from the intense competition in the online retail space in the form of deep discounts, think again. The sellers on these platforms are also in for some better commercial times. Ecommerce giant Amazon has made changes across the board in the fee charged by it from the sellers on its platform.

In fact, observers feel, Amazon and Flipkart are trying to match each other’s fee structure and terms so that the sellers are not tempted to prefer one over the other. These reductions made by Amazon are not uniform, but category-specific and in some categories even increases have been made.

The core of this strategy is to encourage sellers to undertake deliveries to local customers and the fees for deliveries within a region and for national deliveries, proportionate hikes in the charges have been proposed.

To understand this in perspective, a seller in the groceries or daily essential products segment will see a drop in seller fee by as much as 70% (from 7% to 3%). The other category being promoted, similarly, is the fashion apparel segment (19.55% to 17%). At the same time, products falling in the categories, shoes, home improvement accessories, power-banks and chargers, the sellers will end up paying 50% more from now on to Amazon in terms of seller fees.

Amazon has also left 48 categories untouched, which include including mobiles, laptops, books and small appliances. There is some ambiguity still on what kind of seller fee will be charged from two entities, Cloudtail and Appario, both of which Amazon has made investments in.

The ecommerce giant has also looked at some environment friendly businesses and as part of its social responsibility, it has brought down its fees for products like garden solar devices (12% to 5%) and LED bulbs and batteries (11% to 3%) and so on.

When it comes to the shipping charges also, as indicated above, to encourage local sellers, the shipping charges for Fulfilled by Amazon (FBA) deliveries within city limits has been cut by Rs 4 (Rs 28-24) for packets weighing 500gms and below. If the same were to be delivered to a regional destination, there is a Rs 4 increase (Rs 28-32) and for places beyond, Rs 5 increase (Rs 55-60). As the weight increases beyond 500gms, there will be proportionate reduction in the shipping charges. Amazon has reduced the closing fee for sellers also where Amazon picked up the products directly from the sellers to make deliveries.

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