Big Savings on Amazon: Internet shoppers are in for good news since Amazon has made a significant policy shift that will potentially make products cheaper. The e-commerce giant has opted to eliminate referral fees on more than 1.2 crore products that are below Rs.300 in price. It is Amazon’s largest fee cut so far, and it will benefit small firms selling on the website. The move, which will be effective from April 7, will allow sellers to pass on the saved costs to consumers, reducing prices of their products and making shopping online cheaper.
1.2 Crore Products to Receive Price Reductions
Amazon’s move will affect 135 product categories such as clothing, footwear, jewelry, groceries, home decor, beauty, toys, and kitchenware. Referral fee is a commission charged by sellers to Amazon on every sale, ranging from 2% to 16% based on the category. By waiving this fee for products priced below Rs.300, sellers will keep more profit and enjoy the freedom to lower prices.
Reduced Shipping Fees for Sellers
Along with slashing referral fees, Amazon India has also decreased shipping charges for sellers. The cost of shipping has been brought down from Rs.77 to Rs.65, while handling charges for goods weighing less than a kilogram have been slashed by as much as Rs.17. This should encourage more sellers to come to the platform so that they can provide competitive prices. According to one company representative, referral and shipping charges compose 90-95% of what sellers must pay Amazon.
Effect on Internet Shopping
With lower fees, vendors will be able to reduce prices of products with more flexibility, which will benefit customers who shop regularly for low-cost products. The move also favors small businesses as it enables them to make more sales with improved profit margins. With increased competition, consumers can expect to notice more discounts and offers on Amazon in the next few months.