Online retail giant Amazon India has hiked shipping fees for its 2 lakh sellers by 10-15 percent and will ultimately pass it on to the customers.
Online retail giant Amazon India has hiked shipping fees for its 2 lakh sellers by 10-15 percent and will ultimately pass it on to the customers, reports BusinessLine. The move comes ahead of its upcoming festive sales which are scheduled across August, September and November.
The rate hike, according to the rate card sent to sellers by Amazon, states prices will be hiked in the range of 10-15 percent for weight handling fees in national zones. Additionally, the card introduces a new regional zone concept which offers reduced shipping costs up to 35 percent.
An email which was sent out to the sellers from Amazon says, “The new ‘Go Local’ fee structure by introducing distance-based, weight-handling fee rates for FBA (Fulfilment By Amazon) sellers will reduce your cost of doing business on Amazon whenever you place inventory closer to your customers, resulting in faster deliveries, satisfied customers and increased sales for you.”
The move however has left sellers fuming especially the regional zone concept which they claim is misleading sellers regarding cost benefits.
Some sellers vented their anger and said, “The reality is, Amazon does not provide any technical facility to sellers which can enable them to charge customers separately on the basis of region, neither does it compensate sellers on costs incurred on GST registrations that will have to be done in each state, an extra cost that sellers will have to incur. We were happy that we no longer have to pay 15 percent service tax under the GST tax regime, but that benefit has effectively been wiped out with the corresponding increase in national shipping fees.”AIOVA (All India Online Vendors Association) a forum with more than 3,000 online marketplace sellers differed from Amazon and said, “The benefits received under the GST tax regime could have been passed on to online shoppers in the form of reduced prices, which in our estimate would range from 1-5 percent across categories and price points. However, with the national shipping fee hike of 10-15 percent, it may no longer be possible.”