Amazon India has revised its policies for third-party merchants who sell on its platform, slated to be effective next month. The e-commerce major will increase its commission rates by about 50% on an average across categories with some segments seeing a 100% hike for sellers. This is the second time the online retailer has raised its commission in the last six months.
Amazon will increase the cancelation charges from sellers according to some terms and conditions. As per Amazon India, “Sellers will now be charged a cancellation fee of 8.5% of the value of items instead of 2.5%”. Amazon India owns a commission of almost 5-20% from sellers which depend on the category. Previous month, Flipkart, eminent ecommerce retailer, also revised its terms and conditions for sellers where specific fees on high valued products increases while it decreases the some charges on lower valued products.
AIOVA, abbreviation for All India Online Vendors Association, incorporated almost 2000 sellers. Amazon also revealed that new policy would affect especially on lowered valued products and includes that sellers may consider passing the expanded expenses to buyers.
“The continuous increase in commissions for third-party sellers will make selling uncompetitive against the likes of Cloudtail. We are taking the matter to the Competition Commission of India (#CCI) since the ministry of commerce is not intervening in this matter,” a spokesperson of AIOVA said. #Cloudtail, one of the largest and important sellers on Amazon, which is a joint venture of #Catamaran, #NR Narayana Murthy’s venture and Amazon.
This would lead to increase in the selling price of products by Rs 25-30 according to one of the representative of AIOVA. One of the representative said that, “This fee revision is a part of our regular process, and we do not change our fees frequently so as to give our sellers a sense of predictability in their earnings. While we have increased fee in certain cases, we have also reduced fee in multiple categories such as gold coins, sports, personal care appliances and others. We have also removed the delivery service fee charged on all orders, which will benefit sellers as they tap into consumers from different corners of the country”. Amazon currently has around 1.7 lakh sellers to it’s name.