Selling On Flipkart? Here’s What Changes Under The New Commission Rules
As per Flipkart’s new rules, sellers will not be required to pay commission for the products priced under Rs 1,000.
Flipkart, owned by Walmart, plans to stop charging commission from sellers on products priced up to Rs 1,000. The company will also drop commissions for all products sold through Shopsy, its hyper-value marketplace. The new commission rules will apply to a wide range of products listed on Flipkart.
The move is being seen as a strategy to counter the rise of e-commerce platform Meesho. Under Flipkart’s new commission rules, sellers are expected to offer lower prices and attract more buyers.
Flipkart’s value segment targets mass and low-income consumers. Many of the products in this category cost only a few hundred rupees. The new policy will likely help Flipkart to strengthen its position in the budget market and increase competition in the low-cost online space.
“Unlike Flipkart and Amazon, Meesho doesn’t charge take rates to merchants but makes money on advertisements and mark-up on logistics,” analysts at BofA were cited as saying by Times of India.
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What Changes Under New Rules?
Commission on Flipkart usually ranges from 6%–7% and can go up to 15%. This fee is what sellers pay e-commerce platforms like Flipkart and Amazon for every sale made through them.
With the new move, sellers will not be required to pay commission for products priced under Rs 1,000. Flipkart is now also reducing return fees by Rs 35, offering more relief to sellers.
According to Kapil Thirani, business unit head for Marketplace and Shopsy, these changes will take effect from Nov. 19. He noted that the revised structure will lower the overall cost of doing business for sellers by nearly 30%, the TOI report added.
With the goods and services tax (GST) cuts and income tax reforms, if sellers decide to pass on this benefit to the consumers, it could boost consumption. This is anticipated to help the platform become a more attractive and competitive destination for e-commerce.
Earlier, Amazon also made a similar move in March to counter Meesho’s growing presence in the space. The global e-commerce giant had slashed commissions for products priced under Rs 300.
Meesho has expanded faster than the overall Indian e-commerce market in the past two years, based on its gross merchandise value, according to its updated Draft Red Herring Prospectus (DRHP). As of June 30, the company held a 23%–25% share of the home, kitchen, and furnishing category by GMV, Reuters reported, citing IPO-bound Meesho’s updated DRHP dated Oct. 18.
