Shopping on Amazon could get more expensive | Here's why

“As part of our annual process, we have recently announced fee revisions that will be effective from May 31, 2023,” Amazon told ET in an emailed statement. “Seller fee revisions are based on various factors including change in market dynamics and various macroeconomic factors. As a part of our recent fee revision, we have made certain changes to our fee rate card, including introduction of new fee categories and also reduction of fees in certain categories.”

E-commerce businesses like Amazon and Flipkart generate revenue by collecting commissions and other fees from vendors who sell their goods on their marketplace. According to Amazon, prices are always altering in response to the market.

“Marketplaces know that there will be a straight impact on pricing,” an anonymous seller was quoted as saying by ET. “Whatever is the change in commission, it is done more to change the behaviour of the seller. Marketplaces keep changing these rates based on what they want the consumers to see. So, if the commission goes up by two percent, naturally the prices also go up by two percent.”

For each item they sell in the marketplace, sellers must pay costs for inventory storage, shipping, and returns.

Referral fees, long-term storage fees, reimbursements for returns, and Fulfilled-by-Amazon (FBA) pickup fees for sellers have all seen adjustments at Amazon.

For items that must be transported domestically, Amazon has reportedly hiked delivery costs by around 20–23 percent.

The e-commerce giant is implementing layoffs globally as part of cost-cutting initiatives and is experiencing a slowdown in growth across companies at the same time as the seller fee increase.

ET also said in its report that according to a number of sources and companies that work with Amazon India, the online retailer has experienced the greatest impact among the top e-commerce platforms.

The overall expansion of Amazon has been hampered by a slowdown in global spending. In two waves, the corporation eliminated 27,000 positions. The Seattle-based corporation reported a $1.24 billion loss on net sales of $29.1 billion from worldwide operations for the third quarter of 2023 as opposed to $1.28 billion and $28.7 billion, respectively, a year earlier.