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Flipkart cuts commissions, shipping fee to boost seller numbers; rates to be effective from June 24

BusinessToday.In     June 11, 2019

Walmart-owned Flipkart has reportedly reduced seller commissions and shopping fee to attract new sellers and maintain the existing ones.

The Bengaluru-based e-commerce company has divided the commission rates for the products priced above and below Rs 300 into four slabs. It was earlier providing two commission rates for the same.

The four rate slabs will now differ for products priced up to Rs 300, Rs 301 to Rs 500, Rs 501 to Rs 1,000 and above Rs 1,000 effective from June 24 this year.

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"Flipkart intends to pass on more benefits to the smaller sellers, who typically sell low-priced products but were earlier charged a standard rate of commissions," a company source told Business Standard.

In its latest revision, Flipkart has slashed commissions for products in the books and general merchandise category by around 13%, for electronics, and home and furniture products, the commission rates are reduced to as much as 10% and 8% respectively, the report said.

The company which approximately has 1,00,000 registered sellers on its platform, has also lowered the shipping fee for the ones who dispatch directly to customers by 57% in the 500 gm to 3 kg category. Meanwhile, there also has been a hike of Rs 1 in the 0-500 gm category for zonal and national shipments.

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The announcement of the reduction in seller commissions and shipping fee by Flipkart come at a time when rival Amazon is enhancing its investment in India. The Jeff Bezos led ecommerce giant had last week made a fresh investment of Rs 2,800 crore in its India unit, Amazon Seller Services, the first tranche of capital infusion in this calendar year.

This reportedly takes the total funding received from the US-based parent to around Rs 30,090 crore, closer to the $5 billion (over Rs 35,000 crore) kitty that Bezos had committed for the Indian market in 2016.

The fresh investment will beef up Amazon's war-chest to take on Indian e-commerce market leader Flipkart, which was acquired by Walmart last year. Significantly, the latest infusion not only comes barely six months after the previous tranche of Rs 2,200 crore, but is also the first one since Amazon's April announcement about shutting down its Chinese marketplace by mid-July.

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Also Read: Amazon India reduces seller fees by up to 8% to take on rival Flipkart

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