Amazon Announces Zero Referral Fees on Over 1.2 Crore Products

Key Announcement: Amazon India has reduced referral fees to zero for over 1.2 crore products priced below ₹300 across more than 135 product categories.
Referral Fees Definition: Referral fees are commissions sellers pay Amazon for each product sold. This reduction applies to eligible products under ₹300.
Simplified Flat Rate: Amazon has introduced a simplified flat rate for sellers using external fulfillment channels like Easy Ship and Seller Flex, with national shipping rates starting at ₹65 (down from ₹77).
Fulfillment Details:
- Easy Ship: Amazon collects packages from sellers' locations and delivers them.
- Seller Flex: Amazon manages a portion of the seller's warehouse as an Amazon fulfillment center.
Weight Handling Fees Reduction: Weight handling fees for lightweight items under 1 kg have been reduced by up to ₹17, lowering overall fees for sellers.
Volume Savings: Sellers shipping multiple product units at once can see up to 90%+ savings on selling fees for the second unit.
Effective Date: The revised fee structure will take effect from April 7, 2025.

Market Trends and Business Impact

Support for Small Businesses: The move aims to boost growth for lakhs of small businesses selling on Amazon.in by reducing costs and increasing profitability.
Increased Product Selection: Sellers are encouraged to offer a wider selection and more competitive offers, benefiting both sellers and consumers.
Focus on Everyday Low-Value Items: The initiative targets products priced below ₹300, which are typically everyday essentials, making them more accessible to customers.

Differentiation from Competitors: Amazon's fee reduction strategy positions it as a more attractive platform for small businesses compared to competitors like Flipkart.
Potential Price Wars: Competitors may respond by adjusting their fee structures or offering similar incentives to retain and attract sellers.

Operational Efficiency: Amazon's ability to reduce fees reflects its operational efficiency gains, which are being passed on to sellers.
Long-Term Growth: By supporting seller growth, Amazon aims to expand its market share in India's e-commerce sector, particularly in small and medium-sized businesses.

Market Expansion: The initiative could lead to increased participation of small businesses on Amazon.in, driving higher product variety and customer engagement.
Consumer Benefits: Lower fees may result in more competitive pricing for consumers, enhancing the platform's appeal.

No direct mention of regulatory changes, but the fee reduction aligns with broader trends in e-commerce platforms simplifying seller terms to gain a competitive edge.