Amazon, Flipkart ask brands to bear discounts: Report

Amazon and Flipkart are asking brands to set pre-determined prices in order to curb steep discounts, according to a report by The Economic Times.

Any discounts beyond the market operating prices will be borne by the brands, not the seller or marketplace, the report said.

The move will help Amazon and Walmart-owned Flipkart ensure compliance with norms for foreign e-commerce marketplaces.

Moneycontrol could not independently verify the story.

The agreement between the brands and the sellers includes a price guarantee clause, the report added.

As per the price guarantee clause, if a similar product is sold at a lower price on another marketplace, then the seller can match the cost. But, the brands will have to reimburse it to the sellers by issuing a credit note.

Earlier, sellers would lower the prices at their discretion by paying for the discounts.

“As a company, we have a high bar on compliance,” an Amazon India spokesperson told ET. Sellers decide the costs of the products, the spokesperson added.

Flipkart has not yet responded to queries by the publication.

The two e-tailers have told sellers that no vendors will be given preferential treatment, and the logistics rate and commission will be standard, the report added.

There were reports of large sellers giving large discounts due to savings from preferential rates, executives told the publication.

Norms permit 100 percent FDI in ecommerce marketplaces, but they cannot influence prices. The platforms can only serve as a link between buyers and sellers.

Discounts will be much more regulated going forward, said Ankur Dayal, CEO of Primarc Pecan Retail, a leading seller on Amazon and Flipkart told the paper.