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Amazon India removes referral fees on products below ₹300

Amazon India removes referral fees on products below ₹300

  • 24.03.2025 06:10
  • cnbctv18.com
  • Keywords: High Fees, Market Growth

Amazon India eliminated referral fees on products under ₹300 and cut national shipping rates from ₹77 to ₹65, a 16% reduction. These changes aim to attract more sellers by simplifying fees for external fulfillment services like Easy Ship and Seller Flex, while also reducing weight handling costs for lightweight items. The updates are designed to help small businesses grow by offering lower fees and more competitive pricing options.

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Amazon India has reduced referral fees and shipping rates to support seller growth on its platform.

Context

Amazon India Fee Changes Analysis

Key Facts and Figures

  • Referral Fees Removed: Over 1.2 crore (12 million) products priced below ₹300 now have zero referral fees.
  • Shipping Rate Reduction: National shipping rates reduced from ₹77 to ₹65, marking a 16% decrease.
  • Sellers on Platform: Amazon India currently has over 1.6 million sellers.
  • Weight Handling Fees: Reduced by up to ₹17 for lightweight items under 1 kg.
  • Effective Date: Changes will take effect from April 7, 2025.

Business Insights

  • Strategic Move for Seller Attraction: The fee reduction is aimed at making Amazon.in more attractive to small businesses and sellers, particularly those offering low-value products.
  • Simplified Fee Structure: The move simplifies the fee structure for external fulfilment channels like Easy Ship and Seller Flex, potentially improving seller experience and satisfaction.

Market Implications

  • Increased Competition: This initiative could intensify competition among online retail platforms, which have been charging various fees to both consumers and sellers.
  • Seller Growth: The reduced fees are expected to enable sellers to offer a wider product selection and more competitive pricing, driving business growth on Amazon.in.
  • Consumer Benefits: Lower fees for sellers may translate into better deals and discounts for consumers.

Competitive Dynamics

  • Differentiation from Competitors: By reducing fees, Amazon India is positioning itself as a more cost-effective platform compared to competitors like Shopify, ONDC, and social media platforms (Instagram, Facebook, WhatsApp).
  • Potential Market Expansion: The move could attract new sellers and encourage existing ones to expand their product offerings on the platform.

Long-Term Effects

  • Sustainability of Pricing Models: The fee reduction may prompt other e-commerce players to reevaluate their pricing strategies, potentially leading to a shift in the market dynamics.
  • Regulatory Considerations: While not explicitly mentioned, such significant fee reductions could draw regulatory scrutiny if perceived as anti-competitive practices.

Strategic Considerations

  • Operational Efficiency: Amazon India’s ability to reduce fees reflects its operational efficiency and scale, allowing it to pass benefits to sellers while maintaining profitability.
  • Customer-Centric Approach: The focus on reducing seller costs aligns with Amazon’s long-term strategy of offering a wide selection and competitive pricing to consumers.

Conclusion

Amazon India's decision to eliminate referral fees and reduce shipping rates is a strategic move to strengthen its position in the Indian e-commerce market. By making selling on Amazon.in more lucrative, the company aims to attract and retain small businesses, potentially increasing product variety and competition in the online retail space.