BENGALURU: Online retail majors Amazon India and Flipkart have reached out to a select set of top sellers.
BENGALURU: Online retail majors Amazon India and Flipkart have reached out to a select set of top sellers. The e-tailers have said they are willing to let go of significant margins across categories to bring prices down amid the economic slowdown affecting consumer spends ahead of the festive sales, four independent sellers told TOI.
Owing to the current macroeconomic trends, the e-tailers are willing to let go of a larger pie of their commissions to boost sales later this month, these people added.
Merchants said while e-tailers offer such incentives during festive season sales, the quantum of waiver is perhaps the highest this time. Both the e-tailers are offering these waivers in some of the largest categories by gross sales, like fashion & accessories and consumer electronics. Commission typically differs within sub-segments of fashion or consumer electronics.
“For select apparels, a 15% commission is being offered to be reduced to 10%, which is a cut of over 30%,” the New Delhi-based seller added. “These waivers used to be for devices (mobiles) largely. We are seeing commission waivers of as much as 50% in some segments like power banks, chargers and cables,” another merchant added.
Additionally, large- or mid-sized sellers have not been given new estimates of keeping extra stocks of their products in the fulfilment centres (FCs) as both Flipkart and Amazon want to clear out the existing inventory from last two quarters. Compared to last year’s festive season, this is another area where preparedness is not as robust as previous years in the runup to the festive sales.
“In select categories, they are offering a higher percentage waiver to us. The idea is if e-commerce companies charge us less commission, we can pass that on to consumers. It usually helps as my volumes would go up,” said a New Delhi-based seller, who sells across these platforms. According to him, the overall volume of advance orders to manufacture some of the private labels of these e-tailers are less than last year.
Flipkart, owned by Walmart, and Amazon India operate as marketplaces here and earn commissions that are in the 15-30% range, based on product categories and tier of sellers. The waiver would thus depend on the category and volume of sales. Flipkart, for instance, rates its sellers under tiers like gold and silver. While e-tailers are known to incentivise festive sales heavily every year, they would incur additional costs for the commissions they are willing to sacrifice for a higher volume of sales.
“Prices for products on the Amazon.in marketplace are determined by the sellers. We work hard and continually innovate to offer services such as FBA (‘Fulfilment by Amazon’) to sellers on our marketplace that enable them to significantly lower their cost of selling,” a spokesperson of Amazon India said.
“At the outset, I must state that these assumptions are baseless and untrue. We are excited and gung-ho about the festive season as this is business as usual for us – a new normal of sorts,” a Flipkart spokesperson added.
“Overall, during the year, sales have not been at their best or like last years. Of course, there will be an impact of overall economy facing a slowdown. We are seeing signs of the same as e-tailers are trying these tools to make sure they clock higher sales,” another seller said.