Flipkart joins Amazon in increasing seller fees

BENGALURU: After Amazon hiked the commission it charges its merchants, India’s largest online marketplace Flipkart is following suit. The Bengaluru-based e-tailer is set to introduce a new policy for sellers entailing an increased fee as it looks to rev up revenues and cut losses. It is learnt that Flipkart has increased the commission by 5-6% for sellers across multiple categories such as apparel and mobile accessories.

As part of the updated seller guidelines, which will be effective from June 20, Flipkart will launch two new fee structures for merchants on its platform — a fixed component and another one which will charge sellers about 2.5% payment collection fee for the products being sold.

Besides additional commission, sellers will now have to pay the shipping fee in case of product returns. Binny Bansal, who took over as the CEO of Flipkart in January, is in the midst of boosting sales by maximizing revenues from existing channels like logistics, and by intensively trimming burn. Bansal told TOI in a recent interview that he was satisfied by the progress made in cutting the e-tailer’s cash burn.

The Economic Times had reported that Amazon had hiked commissions by 9% a month ago, while Snapdeal cut its commission to sellers to boost falling sales.

So far, Flipkart was not charging any payment collection fee from sellers, and the new rate is believed to be slightly higher than industry peers like Amazon India and Snapdeal, who usually charge 2-2.3%. The fixed fee component is estimated at being Rs 15-30, which will be charged to sellers per order depending on the price of the goods sold by them.

“Today we are a strong community of over 90,000 sellers and over 75 million registered users. We thank you for being a part of our wonderful journey. We are making important changes to our marketplace fees and policies which will be effective from June 20 onwards, and will impact all sellers on the platform,” Flipkart said in its communication to sellers.

When contacted, a Flipkart spokesperson said in an emailed response, “The revised structure across shipping, commission, and returns will enable sellers to have predictability and better manage their online business. Our commission and fee structure remain competitive and, in many categories, better than other marketplaces. Flipkart is closely working with all the sellers to ensure a smooth transition.”

“We understand and agree that Flipkart wants to attain profitability. But in doing so, they are making selling hard and not viable. How can profit be attained without sales?” a spokesperson of All India Online Vendors Association said.