The company has reduced commissions by 3-12 per cent for 59 subcategories, Amazon India’s head of selling partner services Amit Nanda told ET. The reduction is focused on products with a low average selling price (ASP), he said.
“We also wanted to help our sellers plan their Diwali and other holiday sales… with this change, we hope that sellers will find it just as cheap, if not cheaper, to sell some products on Amazon compared to their offline channels,” Nanda said.
In March, ET reported on Amazon increases commissions between 10 and 30% By that time, it had changed several categories, such as automotive electronics, keyboards and mice, and personal care appliances, from a single flat fee to a tiered system based on retail price (ASP).
This time around, a number of categories such as apparel, home decor, fashion and sports that feature products with low retail prices will see a reduction in sellers’ commissions.
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For apparel, for example, the new commission for ethnic clothing is 4.0-17.5%, depending on the retail price, up from 7.5-17.5% currently. For men’s T-shirts, Amazon will now apply a commission of 5.0-21.0%, up from 13.5-21.0% previously, while for sweatshirts and jackets it will be 8.0-12.0%, up from 8.0-24.0%.
For materials for saris and dresses, the new rate will range from 8.0% to 23.0%, up from 14.0% to 23.0%. For imitation jewellery, it will range from 17.5% to 22.5%, up from 22.5% to 24.0%.
“We believe the drop in tariffs is drastic enough to shake up sellers and make them say yes, we will operate with very different economics this time,” Nanda said. While reduced tariffs for low-priced retail items “may have greater uptake in Tier 2, Tier 3 (cities) and beyond,” Nanda said there was also plenty of room for growth in metropolises.
On April 6, ET reported on Amazon launches a vertical called Bazaar Selling unbranded items at low prices to compete with Flipkart-backed Meesho and Shopsy, Bazaar will have a different commission structure, Nanda said.
“We have good momentum coming off Prime Day and Freedom Day sales in July and August… current trends make me feel confident that this will be a great holiday period, but there is also some nervousness that we are going to break new records,” he added.
Apart from apparel, the new tariffs on cushion covers will range from 3.0% to 10.0%, up from 8.0% to 10.0%. Home furnishing items, excluding curtains, will have a new tariff range of 2.0-11.0%, up from 11.0% at present. Home fragrances and candles will have a new tariff range of 2.0-12.5%, up from 7.5-12.5%.
However, some categories will see an increase in the rate range. Backpacks, for example, will have new rates of between 10.0% and 14.5%, compared to the current 12.0-13.0%. Fine studded jewelry will have a new flat rate of 13.0%, compared to the current 10.0%. Smartwatches and accessories will have a rate of 15.5-17.0% compared to the current 15.5%.
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