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Amazon to not charge referral fee from sellers on products priced under Rs 300

Amazon to not charge referral fee from sellers on products priced under Rs 300

  • 24.03.2025 06:40
  • indiaretailing.com
  • Keywords: High Risk, Low Risk

Amazon India eliminated referral fees on products priced below Rs 300 across 135 categories, including apparel, grocery, and home décor, to support small businesses. The move also reduces shipping costs and handling fees for lightweight items, effective April 7, 2025.

Amazon Services

Estimated market influence

Amazon India

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Analyst rating: N/A

Amazon India is reducing referral fees and shipping costs for sellers, which could increase seller participation and product variety on the platform.

Small Businesses

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Analyst rating: N/A

The move supports small businesses by reducing financial burdens, potentially leading to growth and expansion.

Context

Amazon India Eliminates Referral Fees on Products Under Rs 300

Key Facts and Figures:

  • Referral Fee Waiver: Amazon India will not charge referral fees on over 12 million products priced below Rs 300 across 135 product categories, including apparel, grocery, beauty, and more.
  • Effective Date: Changes will take effect from April 7, 2025.
  • Fee Structure:
    • Referral fees are a commission sellers pay Amazon for each product sold.
    • Flat rate shipping costs reduced to Rs 65 (down from Rs 77) for external fulfillment services like Easy Ship and Seller Flex.
    • Handling fees for lightweight items under 1 kg reduced by up to Rs 17.
  • Seller Benefits: Sellers shipping multiple units can save up to 90% on selling fees for the second unit.

Business Insights:

  • Support for Small Businesses: The move aims to boost seller growth and attract small businesses, enabling them to offer more competitive prices and wider product selection.
  • Increased Product Variety: By reducing costs, Amazon encourages sellers to list more everyday low-value items, enhancing customer options.
  • Customer Impact: Lower fees may lead to reduced prices for consumers, improving affordability and satisfaction.

Market Implications:

  • E-commerce Competition: This initiative positions Amazon as a more attractive platform for small businesses, potentially increasing its market share in India's competitive e-commerce sector.
  • Strategic Move: The fee reduction reflects Amazon's focus on seller support, aligning with broader industry trends of platforms investing in seller ecosystems to drive growth.

Competitive Dynamics:

  • Pressure on Competitors: Other e-commerce players may need to adjust their fee structures to remain competitive, potentially leading to price wars or improved services.
  • Seller Advantage: Sellers can leverage these changes to expand their product range and market reach, gaining a strategic edge over competitors.

Long-Term Effects:

  • Revenue Model Shift: While Amazon reduces reliance on referral fees for low-priced items, it may see increased revenue through higher sales volume and customer retention.
  • Regulatory Impact: The move could be monitored by regulators to ensure fair competition in the e-commerce market.

This strategic decision underscores Amazon's commitment to fostering a thriving seller ecosystem while enhancing its competitive position in India's growing e-commerce landscape.