Amazon India Now Charges Marketplace Fees to buyers

There's been a lot of buzz around the new fee structure Amazon India rolled out for its sellers, getting plenty of attention from both Amazon's PR team and sellers alike. Now, it seems Amazon India has also quietly started adding a 'Marketplace Fee' for customers.

It's quite interesting to see a big e-commerce player like Amazon introducing a 'Marketplace Fee' for customers, especially since quick commerce platforms have been adding these charges for some time now, despite leaving their customers feeling a bit unhappy.

Context

While attempting to complete a purchase on Amazon, I noticed something as shown in the screenshot displayed below. A 'Marketplace Fee' of Rs. 5 was unexpectedly added to the overall checkout total, even though the order was of a reasonably high value. I removed it and added a low-value item, and the fees were still there!

Marketplace Fee by Amazon India

Points to Note:

• The fee applies regardless of the order amount.
• Charged to both Prime and Non-Prime Members
• Applies regardless of the seller, including on products offered by major Amazon vendors.
• This hasn't been covered by any media outlets or on social media, which suggests it might be a recent development or possibly a pilot program that Amazon India is testing on certain customer accounts.

What is 'Marketplace Fee'

As per the description given on Amazon India 'Marketplace Fee is a flat fee charged by Amazon which enables us to offer you convenient access to a vast range of products from millions of sellers. This fee is non-refundable in case of returns.' Read More here

Amazon marketplace Fees

 

What does it mean?

For Amazon, this fee represents easy additional revenue. Similar fees have been implemented by quick commerce and food delivery apps, leading some users to limit their usage. Despite this, these companies continue to experience growth overall. Amazon processes around 20-25Lakh orders a day (reference may 2024). That platform fees essentially means an additional revenue of Rs. 1-1.25 crore a day. And this Fees is Non Refundable.

Amazon has lowered its seller fees for items below Rs. 300 to better compete with Meesho and Flipkart. Introducing this fee appears to be an effective strategy to recover some revenue. Since it applies to all customers and products regardless of their price, it could significantly offset any reduction in commissions from sellers.

I am unsure whether this is merely a temporary experiment or a new permanent feature. However, I invite you to share your thoughts and experiences regarding this matter. Please let others know if you are also encountering these additional charges by leaving a comment below.