Amazon India Announces To Remove Referral Fee For Products Below Rs 300

Amazon India Announces To Remove Referral Fee For Products Below Rs 300

  • 24.03.2025 07:31
  • newsx.com
  • Keywords: High, Low

Amazon India has removed referral fees for products below Rs 300 and reduced shipping and handling costs to attract more sellers. These changes aim to support small businesses and strengthen Amazon's presence in India's competitive e-commerce market.

Amazon ServicesAmazon ReportsAmazon News
open_in_newOriginal article

Estimated market influence

Amazon India

Positivesentiment_satisfied
Analyst rating: N/A

The company is making strategic moves to attract more sellers and reduce costs, which could enhance its market position.

Flipkart

Negativesentiment_dissatisfied
Analyst rating: N/A

As a key rival, Flipkart's fee structure may be affected by Amazon's changes.

Context

Analysis and Summary: Amazon India Removes Referral Fee for Products Below Rs 300

Key Facts and Data Points

  • Referral Fee Removal: Amazon India has eliminated referral fees for sellers listing products priced below Rs 300.
  • Affected Products: Over 15 million (1.5 crore) products across 135 categories are impacted by this change.
  • Previous Referral Fees: Earlier, Amazon levied a referral fee of 2-4% on each product sold.

Fee Reductions and Changes

  • Shipping Charges: National shipping charges for sellers using external fulfillment channels (Easy Ship and Seller Flex) have been reduced by nearly 16%, now ranging from Rs 65 to Rs 77 per order.
  • Weight Handling Fees: Fees for lightweight items under 1 kg have been slashed by up to Rs 17.

Effective Date

  • The revised fee structures will be effective from April 7, 2025.

Seller Base and Market Impact

  • Amazon India’s seller base stood at 16 lakh (1.6 million) during the last festive season, up from 13 lakh (1.3 million) in the previous year.
  • Over 90% of Amazon’s sellers in India are small and medium-sized businesses, with nearly half based in tier 2, 3, and 4 cities.

Financial Implications

  • Amazon Seller Services operating revenue grew by 14% to Rs 25,406 crore in FY24.
  • Net loss reduced by 29% to Rs 3,470 crore due to improved operational efficiencies.

Competitive Landscape

  • Flipkart: Competitor Flipkart charges a Rs 49 'Protect Promise' fee on select products.
  • Other Platforms: E-commerce and quick-commerce platforms like Swiggy and Zomato have introduced platform fees (e.g., Rs 2 to Rs 10).

Strategic Considerations

  • Amazon’s move aims to attract more sellers, particularly small businesses, to strengthen its market position in India.
  • The fee reductions are expected to drive long-term growth by easing financial burdens on sellers and expanding market reach.

Long-Term Effects and Industry Implications

  • The decision reflects a broader trend of e-commerce platforms adjusting pricing strategies to compete more effectively.
  • Amazon’s focus on seller-friendly policies may help it gain a competitive edge in India’s highly contested e-commerce sector.

This analysis highlights the strategic importance of Amazon India’s fee reductions, their potential to boost seller participation, and the broader implications for the e-commerce industry in India.