Amidst protest by sellers, Amazon slashes seller fee and storage charge targeting Diwali sale

To have an edge over rival e-commerce marketplace especially Flipkart during the upcoming sale in October, Amazon has once again slashed seller fees and reduced storage charges so that vendor can stock more products in the sale.

This is the third instance in 2018 when Amazon is slashing seller fee ahead of its flagship sale. In the previous two incidents witnessed slashing seller fees in 22 and 32 categories in June and March respectively, this time the US-based e-commerce giant has chosen only five major categories to cut the fees.

The firm has lowered the commission sellers' fee by up to 2 per cent in categories such as apparel, home, and electronic accessories. Additionally, it has also reduced the closing fee for sellers who use its fulfillment centres to store products.

The move will essentially help its sellers to store their inventory closer to the customer for faster deliveries and this drop-down will also encourage vendors to stock more products and offer a wider selection.

With the coming festival season, Flipkart and Amazon are targeting to generate as much as $3 billion of sales. Apart from focusing on GMV, the upcoming festival sale will be largely driven by the number of sellers added by two major e-commerce giants--Amazon and Flipkart.

The Walmart-owned company has already revised its rate card in last month and claims to add more sellers at double rate on its platform. As far as the number of sellers partners, Amazon is leading the show and claims to have around 3.8 lakh sellers in comparison Flipkart has a little over 1 lakh sellers on its platform.

While these e-commerce players boast off their seller strength, a number of small sellers on these platforms have been complaining and demanding to end the price-war played by Amazon and Flipkart via their own-controlled sellers.

Amazon’s Cloudtail, Appario and Flipkart’s WS Retail among others have been targeted by All India Online Vendors Association (AIOVA) that has approached the Competition Commission of India (CCI) on behalf of these small sellers.

To level the playing field in e-commerce, the government may ban these anchor sellers controlled by the e-commerce giants.

The development was reported by ET.