Amazon will take zero commission from sellers for products under Rs 300; shipping costs also reduced

Amazon will take zero commission from sellers for products under Rs 300; shipping costs also reduced

  • 24.03.2025 06:09
  • financialexpress.com
  • Keywords: Amazon

Amazon is eliminating referral fees for products under Rs 300 in India, benefiting over 16 lakh sellers. The company has also reduced shipping costs to help sellers save more.

Amazon NewsAMZNsentiment_satisfied
open_in_newOriginal article

Estimated market influence

Amazon

Amazon

Positivesentiment_satisfied
Analyst rating: Strong buy

Amazon is reducing fees and shipping costs to support Indian sellers.

Context

Amazon's Fee Reduction Strategy in India: Business Insights and Market Implications

Key Changes Announced

  • Referral Fees Eliminated: No commission for products under Rs 300 across 135 categories, effective April 7, 2025.
  • Shipping Cost Reductions:
    • Flat shipping rates starting at Rs 65 (down from Rs 77) for national shipments using Easy Ship and Seller Flex.
    • Weight handling fees reduced by up to Rs 17 for lightweight items under 1 kg.

Impact on Sellers

  • Fee Structure Simplification: Sellers can save up to 90% on fees when shipping multiple units, encouraging bulk sales strategies.
  • Promotional Tools: Amazon suggests promotions like "Buy 2, Get 10% Off" to maximize savings under the new fee structure.

Historical Context

  • In September 2024, Amazon reduced seller fees for 59 product categories, ranging from 3-12%.

Business Insights

  • Attracting Small Sellers: The elimination of referral fees could attract more small and medium-sized sellers, increasing platform diversity.
  • Strategic Competition: This move positions Amazon to compete more effectively with platforms like Flipkart by offering lower costs for sellers.

Market Implications

  • Increased Product Availability: More products under Rs 300 may be listed, potentially driving higher sales volume.
  • Margin Pressures: While seller fees are reduced, Amazon must manage operational costs to maintain profitability.

Competitive Dynamics

  • Market Share Growth: The strategy aims to strengthen Amazon's position in India's competitive e-commerce sector by attracting more sellers and customers.

Long-Term Effects

  • Potential for Expansion: Success of this model could lead to broader strategic initiatives, enhancing Amazon's market influence.
  • Regulatory Considerations: While not directly addressed, such moves may prompt regulatory scrutiny if perceived as anti-competitive.

This analysis highlights how Amazon's fee reductions are a strategic move to enhance competitiveness and seller engagement in India's dynamic e-commerce landscape.