Amazon and Flipkart in India have come up with a new strategy to combat the economic slowdown in the country that has affected consumer spending.
And what’s that!
The e-tailers have let go off significant margins so as to bring down prices across categories.
The companies have reached out to a few top sellers on their portals and have agreed to forgo a large part of their commission to boost sales. Though it is common for these companies to offer such waivers during festive season, it seems to be the highest this time.
Best selling categories like fashion & accessories and consumer electronics will be included in the waiver.
“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.
“For select apparels, a 15 per cent commission is being offered to be reduced to 10 per cent, which is a cut of over 30 per cent,” 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 per cent in some segments like power banks, chargers and cables,” said another merchant.
Walmart-led Flipkart and Amazon earn commissions that range from 15 to 30 per cent, 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. E-tailers heavily incentivise festive sales every year but will have to bear additional costs this year due to the high margins they are willing to forgo for higher sales.