Amazon takes on Flipkart; cuts sellers' fee

Amazon has reduced its sellers' fees on various categories of products sold on its online retail website in India.

Amazon's latest move has come after Flipkart decided to hike the sellers' price, Business Standard reported on Friday.  

As Flipkart has hiked its sellers' commissions given to sellers for selling products, the seller's group has threatened to stop selling products on its platform.

Amazon has reduced sellers' commissions on smartphones and tablets from 5% to 3% of the cost of the device, the news report said. 

It has cut the sellers' fees from 12% to 5% for movies and educational segment.

The recent move by Amazon will help sellers to sell products at a lower cost, effectively bypassing the foreign direct investment (FDI) norms for e-commerce marketplaces that ban such players from offering heavy discounts. 

“We think these revised rates can help sellers to perform even better," the report said quoting Amazon India as saying in its statement. “We hope sellers will take advantage of these revised rates,” cited the statement. 

However, it has increased its commission on non-core segments like mobile accessories, luggage and pet products by 2 to 9%. 

Amazon launched its online retail operations in the country in 2013 with around 100 seller base, which has now grown to 85,000, growing at 250% on an annual basis.

Amazon's chief Jeff Bezos had recently announced to invest additional $3 billion in its operations in India, which takes its total investment to $5 billion in the country. 

It competes with homegrown e-commerce players like Flipkart and Snapdeal. Amazon aims to become big in India's e-commerce market. 

Flipkart and Snapdeal will now feel the pressure in terms of matching sellers' commissions with that of Amazon's rates.