Amazon Trying To Woo Small Businesses, Scraps Referral Fees On Goods Under Rs 300

The fee waiver will be applicable to more than 135 product categories, including clothing, footwear, jewellery, grocery, home décor, beauty, toys, and kitchen essentials.

This initiative, set to take effect from April 7, marks the company’s most significant seller fee cut to date.

Source : Amazon

Amazon India announced a major reduction in seller fees, eliminating referral charges on over 12 million products priced under Rs 300. This initiative, set to take effect from April 7, marks the company’s most significant seller fee cut to date. The move is aimed at benefiting small businesses that sell through the platform.

The fee waiver will be applicable to more than 135 product categories, including clothing, footwear, jewellery, grocery, home décor, beauty, toys, and kitchen essentials. Currently, sellers pay a referral fee ranging from 2 per cent to 16 per cent in these categories, depending on the product type.

Additionally, Amazon India will reduce the national shipping rates for sellers using external fulfilment options such as Easy Ship and Seller Flex, reported The Economic TImes. The shipping cost will drop from Rs 77 to Rs 65. For products weighing less than 1 kg, weight handling charges will be lowered by up to Rs 17. Sellers who dispatch multiple units in a single shipment may benefit from savings of up to 90 per cent on the second unit’s selling fees, the company said.

Amit Nanda, director of selling partner services at Amazon India, explained that these fee reductions are designed to enhance the platform’s appeal for sellers. He noted that referral and shipping charges typically constitute 90-95 per cent of total seller fees.

“As part of the continuing action to help sellers reduce their cost of doing business, we are now making a really large change in terms of the drop in selling fees on Amazon,” the executive said as mentioned in the report.

He highlighted that while the company has implemented fee reductions in the past, they were more limited in scope.

Market Conditions and Regulatory Challenges

This decision follows previous fee reductions in August 2024, when Amazon India lowered selling fees by 3 per cent to 12 per cent across 59 product sub-categories ahead of the festive season. Selling fees encompass referral charges, weight handling fees, closing fees, and other costs.

Amazon India’s latest move comes amid increased regulatory scrutiny. In August 2024, the Competition Commission of India (CCI) concluded that Amazon and Flipkart breached antitrust regulations by favouring select sellers on their platforms. The investigation, initiated in 2020, indicated that these e-commerce giants structured their marketplaces to benefit a few large vendors while disadvantaging smaller sellers.

On January 6, the Supreme Court transferred all related cases to a single-judge bench of the Karnataka High Court.

Amazon India currently hosts a network of over 1.6 million sellers, with products available across all serviceable pin codes in the country. The company reported that over 90 per cent of these sellers are small and medium businesses, with more than half based in tier II, III, and IV cities.