Amazon To Revise its Online Selling Fees For Sellers Starting September 1, 2021
Amazon.in is inarguably the largest online marketplace in India. With an easy registration process, 24×7 customer support, and additional service solutions, it has simplified online selling for small business owners in India. Moreover, with fulfilment options like FBA and Easy Ship, sellers can focus on the core business elements. The marketplace has revolutionised Indian retail by setting up a medium through which sellers can expand their reach to millions of customers, all this without investing in setting up elaborate operations.
It is no surprise that this comes at a cost; Amazon requires the merchants selling on its platform to pay different kinds of fees. The fee incurred is based on the fulfilment option you select & the price range. The fee structure is periodically modified and once again Amazon India has revised the seller fee structure, to come into effect from September 1, 2021. The last major fee revision was in May 2021 when the referral fee was slashed by 50% for the month for a certain category of sellers. This came as a sigh of relief for SMB sellers when the pandemic was raging across the country. Now effective 1st September 2021; the marketplace has announced fee revision for sellers.
So, has the Amazon seller fee increased? What has changed? Which product categories have been most affected? Let’s find out.
What fees have been revised by Amazon?
Selling on Amazon Fees
For each item sold on Amazon, the referral fee is deducted as a percentage of the selling price. Each product category attracts a different referral fee.
Closing fee is charged separately for each fulfillment option and is majorly based on the product price range.
FBA Weight Handling Fee
If the seller opts for FBA, Amazon handles the deliveries for which it charges a fee. The fee charged depends on whether the product delivery is Local(intra-city), Regional(within the set of states clubbed as a region by Amazon), or National(across regions).
FBA Pick and Pack Fee
Since Amazon stores & packs your products in FBA, it charges a fee for the same. The fee depends solely on whether the product is of a Standard or Heavy & Bulky size band.
Easy Ship Weight Handling Fee
Just like FBA, selling through Easy Ship also incurs a fee, since Amazon delivers your products. Although a bit higher, the fee structure is similar to FBA.
Change in Referral Fees
CATEGORY: MEDIA & CONSUMABLES
- While the referral fee for media products (Movies, Music, Books, Toys, Video Games & Software) largely remains unchanged, there has been a significant rise in the referral rates for some consumables. Products including deodorants, facial steamers, hand sanitizers, contact lenses are examples of such consumables.
- It was seen that some consumable items under categories such as grocery & gourmet, personal care appliances, and health & personal care will now be charged referral fees as per the price range.
- For example, a sale of electric massagers earlier costed a referral fee of 9% irrespective of the price. From September onwards, the same will now be charged at 9.5% if the item price is less than or equal to INR.1000 and 12% if the price exceeds 1000.
- The above trend of price-based referral charges was seen in the Softline segment. Categories like kids footwear, handbags, and backpacks will attract different referral fees for prices below & above INR. 500.
- Under the apparel category; sarees, sweatshirts & apparel accessories have been assigned different rates for price tags lesser than and greater than INR. 300. Whereas for shorts, kurtas, kurtis & salwar suits, in addition to the INR. 300 cap, a new cap of INR. 1000 is introduced, beyond which a higher fee is charged.
- While referral charges have remained the same or increased for most product families, a marginal decrease was seen for sleepwear and women’s innerwear.
- The referral rates for glassware, gas stoves, fans, vacuums, and wall art have no significant changes.
- The same can be said for products like craft materials, LED bulbs, clocks, solar devices & lawn equipment.
- However, automotive products, large appliances, and weighing scales have a noticeable fee increase. The newly introduced commercial agricultural product category will attract a fee at 3% – one of the lowest in the hardline segment.
- The fee for most products under Consumer Electronics(CE) – one of the highest-selling categories on Amazon.in., has been unchanged, with minor fee hikes & slashes here and there.
- While the fee for headsets & car electronic accessories was raised by 3% and 5% respectively, the same was cut down by 1.5% and 2% for PC components and laptop/camera batteries respectively.
Change in Closing Fee
- The closing fee will be increased for all the fulfillment options from September.
- In case of FBA, a refreshing change is that select categories in the 0-250 INR price bracket will be charged INR 12 as compared to INR 25 in the current fee structure. While the fee for items in the 251-500 INR price bracket will remain the same, the 501-1000 INR & 1000+ INR brackets have witnessed a hike of INR 3 & INR 5 respectively.
- Coming to Easy Ship & Easy Ship Prime, the 0-250 INR & the 501-1000 INR price bracket items will attract the same fee as before, though the other two price brackets will witness hikes.
- The MFN will experience the steepest surge in closing fee compared to FBA & Easy Ship.
Change in Weight Handling Fee
- For FBA. the weight handling fee for the first 500 kg has been increased at all levels of the Standard size band. However, the fee for additional weight seems to have been reduced slightly, except when an additional kg of weight is added after 1 kg.
- The above pattern of change was seen for the Easy Ship weight handling fee as well.
- For heavy & bulky goods, Amazon has hiked the weight handling fee for both FBA & Easy Ship at the Premium, Standard & Basic Levels.
Change in Pick & Pack Fee for FBA(Non-Seller Flex)
- The pick & pack fee for Standard and Heavy & Bulky sizebands has been hiked with an extra one rupee.
Closing Thoughts – Positive Outcomes in Long Term
It is clear that Amazon has raised the seller fee. Though Amazon justifies its revisions by stating that it wishes to improve the seller & customer experience, sellers have had mixed responses towards it. The fee hike, as per sellers, would shrink profit margins. Adding to the sellers’ woes are the Indian government’s new eCommerce policies, which include a proposed ban on flash sales.
However, it isn’t as bad as it seems.
- It is a known fact that improvement in customer experience leads to 1) repeat purchases 2) reduced return to origin (RTO) 3) positive word of mouth.
- Reduced delivery time adds significantly to positive experiences- making the customer choose a platform (in this case- Amazon) for their next purchase.
- Amazon as per guesstimates holds the larger share of the eCommerce market though Flipkart may claim otherwise. However, it is an undeniable fact that Amazon’s supply chain is far more sophisticated and the platform occupies a higher consumer mind space.
So overall, if the cost of selling increases per item; the volumes most likely would increase too.
Amazon sellers would probably see a more stable business in the coming months and years by continuing to sell via the platform.
We hope the above article provided you with ample information about Amazon’s revised seller fee. Browntape is dedicated to keeping Amazon sellers updated with the latest news & resources related to selling on the platform. Our eCommerce Management Software is popular among Amazon sellers. Features like Zero-Click Order Processing, Centralized Inventory Management & an Easy-To-Use User Interface make it one of the most sought-after eCommerce software in the market.
MEDIA & CONSUMABLES
*For some select categories within INR 0-250 range, FBA closing fee will be INR 12.
**For some select categories within INR 251-500 range, FBA closing fee will be INR 12.