Amazon Fees Soar! Both Sales Commission, and Logistics Costs Are Rising!

Recently, it was announced that Amazon India will be increasing commissions for some product categories. The new commission adjustments will come into effect on May 31, 2023. India Station will also charge sellers a commission as a percentage of the final sale price. According to insiders, the commission will be modified based on the market price and an additional 18% GST will be charged. In response to this, a seller said, "It doesn't matter. I will increase my prices anyway to offset the high commission."

Commission hike for various categories

The product categories on Amazon India that have seen this hike include beauty and personal care, baby care, automotive products, grocery and pharmaceuticals.

Sources close to the matter said that over-the-counter medicines (generic medicines that can be purchased without a doctor's prescription) have seen the biggest commission hike on India. For over-the-counter medicines priced below Rs. 500, the commission on the sale will go up from 5.5% to 12%. For those priced above Rs. 500, it will charge a 15% commission.

As for the beauty and personal care category, Amazon will charge 9% commission on items priced above Rs 1,000.

Subcategories under the apparel category, including lingerie, accessories and ethnic wear, have also seen a rise in commissions. For pajamas priced above Rs 500, the commission on sales has gone up from 13% to 15%.

Commissions in the grocery category, including herbs and spices, have also been adjusted. Amazon charges a lower commission of 2.5% for items priced below Rs. 500, compared to the previous 4.5%. However, for items priced above Rs. 1,000, the commission has increased from 8% to 9%.

In addition to the increase in commission on sales in some categories, some categories in India have also received a reduction in commission rates, such as wall painting tools, inverters and batteries, which are relatively more niche categories. Commissions on items priced below Rs. 500 have also been reduced in the apparel and appliances categories.

Moreover, Indian sites have set a single commission percentage for certain specific categories. Cosmetics, for example, has a 6% commission draw across all price points.

Higher return fees

Apart from sales commission, Amazon India has also increased the return fees borne by sellers and categorized them into four tiers—Basic, Standard, Advanced and Premium—based on the number of orders, customer feedback, reviews and returns. Different tiers of sellers are required to bear different fees.

Additionally, Amazon India has also increased the long-term storage charges for products so that the per-unit storage cost for items stored for more than 365 days has been increased from Rs. 30 (850 cubic feet) to Rs. 40 (1,105 cubic feet).