Why This Festive Season Is Getting More Expensive For Ecommerce Sellers

Amazon and Flipkart have introduced tougher penalties for late dispatches and cancellations, Amazon has also raised a fee it charges on every item sold, and Delhivery has added a per-shipment surcharge for D2C brands, all in the weeks before Diwali.

The penalties fall on sellers who store and pack orders themselves, hitting low-priced catalogues (Flipkart) and big-ticket orders (Amazon) hardest. The fee increases apply to every order, regardless of how well a seller performs.

These charges land on whoever holds the seller account. That includes brand owners who sell directly on the marketplaces and third-party sellers who sell other companies' products. Brands that sell through a distributor or a large reseller do not pay them directly.

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Consider a kurta priced at ₹799 sold directly on Flipkart by a fashion brand such as Globus Fashion.

Since July, Flipkart stopped charging a commission on fashion products, so on paper the seller keeps more of each sale than it did a year ago.

But under Flipkart’s new penalty structure, effective August 23, the seller is penalised ₹30 the moment the kurta misses its dispatch-by date. 

If the order is then cancelled, the seller is penalised another ₹60. 

Flipkart now also counts three missed deadlines as a cancellation. But the flat penalty (a total of ₹90) means that sellers face a greater burden to clear low-value orders.  

This is one example of how selling online has become costlier this festive season, and penalties are just one part of it. Besides this, there are fee surcharges that apply to every order, whether or not it is delayed or cancelled. And the cost of production and fulfilment have also gone up due to issues ranging from a crunch in raw material supply as well as high fuel prices due to the instability in West Asia.  

This is one example of how selling online has become costlier this festive season, and penalties are just one part of it. Besides this, there are fee surcharges that apply to every order, whether or not it is delayed or cancelled. And the cost of production and........

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