Amazon sellers to get more rights
The major changes will include Amazon sharing liability with business partners, a 30-day notice before removing merchants from the platform.
Amazon confirmed this to TOI, saying it is making changes in India following the German ruling. The major changes will include Amazon sharing liability with business partners, a 30-day notice before removing merchants from the platform, and being more considerate when charging sellers for product cancellations & returns.
Sellers told TOI the changes in who will bear the cost of returns would be a significant gain for third-party merchants as it costs them 7-15% of the product value. India is a market that typically sees 15-20% of order volumes being returned by consumers after delivery. Amazon has over 4 lakh sellers on its India marketplace.
If implemented in spirit, this would have an impact on Amazon’s logistics cost as well. According to regulatory documents, Amazon Seller Services, which runs the marketplace, spent Rs 2,958 crore and Rs 2,459 crore for logistics services in the financial years ending 2018 and 2017 respectively. This translates into 32% and 33% of total expenses for the entity in the comparable period. In comparison, the same entity had revenue of Rs 4,928 crore and 3,256 crore respectively for the last two financial years.
The significant spends in ‘logistics delivery charge’ for Amazon’s marketplace is also attributed to subsidising of delivery cost for certain sellers working closely with the marketplace. “We made these changes because we agree they are good for our sellers. We listen to our sellers and other stakeholders as we work to provide the best service to our sellers and customers,” said an Amazon India spokesperson.