Selling on Walmart’s Flipkart amid Covid gets dearer for lakhs of sellers as company revises fees

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June 17, 2020 12:07 AM

Amazon's rival Flipkart has increased the fixed fee (charged on every order delivered successfully) for orders ranging from less than Rs 500 to Rs 1,000 and above.

Flipkart has also proposed changes in commission charges to be effective next month.

As Walmart-owned e-commerce company Flipkart makes effort to scale its business back to pre-Covid level, the company has revised fees for lakhs of sellers on its marketplace. While Amazon’s rival has more than doubled the fixed fee (charged on every order delivered successfully) from Rs 5 to Rs 12 for orders worth Rs 500 or less than that, the fees for orders worth Rs 1,000 or less than that and more than Rs 1,000 has been increased from Rs 15 to Rs 20 and Rs 30 to Rs 35 respectively. The data around multiple components of seller fees was tweeted by online sellers’ lobby group All India Online Vendor Association (AIOVA) and more shared with Financial Express Online.

“The cost of selling on the marketplace for sellers has never reduced in past five years. In the post-Covid era where traders were expecting a respite, the cost has been further increased. While Flipkart’s systems do not allow sellers to pass the cost to consumers, sellers will have no option but to reduce stock offers on Flipkart marketplace and look for alternate selling avenues,” an AIOVA spokesperson told Financial Express Online. The revision in fees was announced by Flipkart to sellers on Monday night, according to AIOVA.

Moreover, the shipping fee, calculated on the basis of product weight and shipping location, for less than 500 gm product has been increased from Rs 30 to Rs 40 for local deliveries and a rupee up to Rs 47 for zonal deliveries. For national deliveries, the price has been slashed by Rs 6 to Rs 60. The amount credited to a seller is the product’s order value (selling price, shipping charges paid by customer excluding discount) less marketplace fee (shipping fee, fixed fee and commission) and GST.

Comments from Flipkart’s spokesperson are awaited for this story.

“The price hikes by Flipkart needs to be rolled back and they should instead reduce their fees in order for sellers to survive while giving the best benefits to consumers,” the AIOVA spokesperson further said adding that sellers will be forced to increase price up to 5-7 per cent depending on the category and selling price.

Also read: Amazon, Flipkart, other e-retailers’ GMV to grow 4X by 2025 as small towns drive e-commerce ahead

For products weighing 500 gm – 1 kg, the shipping fee has been cut across local, zonal, and national from Rs 18 to Rs 4, Rs 23 to Rs 19, and Rs 27 to Rs 26 respectively. 1 kg – 3 kg of weight slab has been broken into three sub-weight categories. For 1 kg – 1.5 kg, the fee is Rs 13, Rs 17, and Rs 18 for the three shipping location categories. For 1.5 kg – 2 kg, the pricing has been Rs 10, Rs 18, and Rs 22 while for 2 kg – 3 kg products, sellers would have to pay Rs 8, Rs 11, Rs 17 per 0.5 kg weight of the product. For 3 kg – 12 kg, the price has been revised from Rs 8, Rs 10, and Rs 15 for every 1 kg for local, zonal and national deliveries respectively to Rs 7, Rs 10, and Rs 16. The warehouse storage charges have also been revised with 4X increase, AIOVA had tweeted on Monday.

Flipkart has also proposed changes in commission charges for sellers on around 165 products (using Flipkart’s fulfilment services or not) to be effective next month onwards. The revision has been made across four price verticals – up to Rs 300, Rs 301 – Rs 500, Rs 501 – Rs 1,000 and above Rs 1,000. For instance, the proposed increase in Fulfilled by Flipkart (FBF) commissions on trimmer across four price points is 14%, 14%, 12%, and 9% from current 10%, 10%, 10%, and 8% even as non-FBF or FBF Lite commission charges have remained same at 14%, 14%, 12%, and 9% in respective price categories.

Similarly, FBF and non-FBF commission charges for air coolers has been increased from 5 per cent across four price points to 9 per cent for the first three price points. The charges have been increased for most products while for few the charges have either been reduced or unchanged. Flipkart’s fulfilment service offers storage space, faster delivery of products, better packaging and quality checks along with Flipkart Assured Badge, according to the details available on Flipkart Seller Hub portal. Flipkart had reduced commission charges along with shipping fee in June last year to boost sales and attract more sellers on the marketplace ahead of its annual sale – Big Billion Days.

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