Amazon has now cut down on the commission that it used to charge from the seller on electronic commodities and other software as it plans to expand the base of the seller and cut down competition from its major rivals Snapdeal and Flipkart. This strong move by Amazon comes due to its rival Flipkart as it is also under pressure to bring down the losses and increase its commissions and it also plans to pass on the shipping cost to its customers. This will certainly create a big problem as there will be a lot of protesters against them for implementing such acts.
One third of the goods that are sold online by major ecommerce sites all come under electronics classification and smart phones were ruling the sector. Amazon has cut down commissions for tablets as well as smart phones by approximately 25% and it charges the seller around 3-4 percent of the cost of the product.
The major decrease in commission on Amazon was found in the electronic products and other software products category, where the company cut down the commission by around 59% and its now at around 5% for the software. These are mostly videos that belong to the educational trainings or animated videos for kids
Amazon also stated that it had cut down the commission percent for some of the categories of items that were sold on the platform. One of the spokespersons from Amazon stated that they believe that the revised prices will majorly assist the sellers in performing a lot better and also become successful in their business. Adding to that, he also stated that they will go on and innovate and give best-in-class services like Easy Ship, Seller Flex and other value additions to its customers.
Amazon (India) stated that the company started off with as many as 110 sellers three years ago and now they have around 85K sellers growing at a massive rate every year and adding up around 80K items day. They hope that their sellers take advantage of the revised rates and improve their businesses.
Amazon had increased commission for some categorizations in the previous month; this change was mainly for the segments like mobile screens, cases and other accessories. The increase in commissions was about 10% for mobile accessories and majority of other segments saw an increase of 2%.