New challenge? Amazon cuts sellers’ fee by 7 per cent after Flipkart increases commission

Amazon India is doing everything it can to race past its rival Flipkart. In a new move, Amazon India cut sellers’ fee on selected items by 7 per cent, days after Flipkart decided to increase seller commission.

Amazon has cut its referral fee by 1-7 per cent on categories such as personal computers, electronics, mobile devices and tablets, movies, music, personal care appliances, etc, which will be implemented from June 17.

This move will invariably benefit the online shoppers as the sellers will pass on the reduced costs to them also.

"Yes, we lowered the rates for certain categories. We think these revised rates can significantly help sellers to perform even better and succeed in their business," an Amazon India spokesperson told ET.

Amazon’s announcement comes after Flipkart increased the seller commission and shipping charges of returned products, which has not gone well with the sellers and are even threatening to leave it.

Meanwhile, Flipkart has three commission structures -commission, fixed fee and collection fee-whereas Amazon has only two-referral fee and fixed fee.

This move is also a part of Amazon’s aggressive push in India after its founder Jeff Bezos announced a further $3 billion investment in India.

"The market is getting tough now. While one is looking at growth, the other is aiming profitability. Snapdeal and Flipkart have investor pressure to make money while Amazon isn't. They are still after getting more market share," Harminder Sahni, founder of Wazir Advisors, told ET.

(Image: Thinkstock)