Amazon India re-jigs business to improve margins

By

Isabelle Crossley

Published
Apr 25, 2019

Amazon India has adjusted seller commission rates as part of a move to improve its business margins and cut costs. 

Amazon India has increased its average logistics fees, ET Bureau reported. The business has also increased seller fees on average but has not stopped giving incentives for its categories experiencing fast growth. The business will also offer reduced fees on categories it wants to promote. 

The business announced that seller fee increases will be effective from May 23 and will apply to product categories including shoes, cosmetics, watches, luggage, and mobile phones. However, from the same date it will cut commission rates on products including fashion jewellery, handbags, sports items, furnishings. Rate adjustments will be between 0.5 and two percent on average.

“Business is not constant, business structure changes, margins change and keeping inflation into account while taking seller feedback, we are making these changes,” Amazon India’s vice-president of seller services, Gopal Pillai, told ET Bureau.

Lighting sales fees have recently been subject to higher charges and sellers that retail over one lakh products from a single store are also subject to additional charges. The categories that Amazon is lowering commission rates for can be understood as product categories the business wishes to build up.  

Amazon India currently has more than 4.5 lakh sellers on its platform and over 170 million products. On top of seller fees, sellers pay referral fees, their own shopping costs, warehouse fees, and packing fees.