PRICING STRATEGY USED

BY E-COMMERCE
PLATFORMS FOR SELLERS
Group 3
Ritika | Sahil | Sashank | Smruti Ranjan | Yogesh
 SELLER SERVICES OFFERED BY PLATFORMS
Fulfilled by Amazon
o Warehousing service
o Differential delivery fees
based on PIN Codes
o Return charges borne by
the platform
Easy Ship
o Differential delivery fees
o Returns’ cost on
customers
Manufacturer Fulfilled
o Only referral commission
Flipkart Advantage
o Storage and handling
fees, differential on
weight and size of items
o Recall fees for returning
unsold inventory
3-P Fulfilment
o Only commission
charges for selling on
platform
o No subscription or listing
fees
Standard Structure
o Standard and oversize
packages
o No differential pricing
based on location
Standard Structure
o No differential pricing
based on size
o No differential pricing
based on location
 FEES CHARGED BY DIFFERENT E-COMMERCE
PLATFORMS

COMMISSION PAYMENT SHIPPING FEES MONTHLY

SELLER FIXED FEES
FEES CHARGES (Local/Regional/National) SUBSCRIPTION

Shoes – 13% L- Rs.35/500 gm

PC – 3% 1.95% R- Rs.35/500 gm Rs. 10 Rs. 499

Mobile – 3.5% N- Rs.45/500 gm

Shoes – 9% L- Rs.30/500 gm < Rs.250 – Rs. 10

PC – 2.5% 2.5% R- Rs.35/500 gm 250-500 – Rs.15 0

Mobile – 2.5% N- Rs.45/500 gm >Rs. 500 – Rs. 30

5% 2.1% Rs. 60/500 gm 0 0

Shoes – 12%
PC – 3% 0% Rs. 45/500 gm 0 0

Mobile – 2%
 NET SELLER MARGINS

PRODUCT

24% 26% 35% 28%

Shoes
(Typically 1 kg)

11% 10% 7% 13%

PC
(Typically 2.5 kg)

4% 4% 1% 9%
Mobile
(Typically <0.25 kg)
 SELLER PAIN POINTS

Problem of Returns No Authenticity Check

High % of returns proportional to Platforms sole focus on earning
orders. Sellers burdened with full commission fees. No efforts put
loss arising from return. in to authenticate the sellers.

Irregular Payments Delivery issues

Sellers aren’t paid as per Reach guaranteed to limited set
schedule promised. Additional of pin codes. Hidden delivery
capital burden on them. charges in form of state taxes
borne by sellers

Packaging Costs Poor Seller Support

Platforms forcing sellers to adopt Poor support services to handle
packaging material sold by them seller related problems. Same
(priced 2x avg price) treatment to large and small
sellers.
 PROPOSED MODEL

SEPARATE METRO/NON-METRO DELIVERY CHARGES

The proposed model charges higher for national deliveries at
remote locations and lower for metro deliveries

COMMISSION REFUND FOR RETURNED PRODUCTS

Partial refund of commission is included for returned product. Amount is decided by
product category and seller quality (depending on rating, reviews and return rate)

PAYMENT FEES AS PER PAYMEMNT SCHEDULES

Proposed model leverages sellers’ willingness to pay to for faster payment.
Separate payment fee is charged for payment within 1/2/4 weeks from delivery

SUBSCRIPTION FEES TO ENSURE REGULAR LISTING

Subscription fee captures the psychology of consumption and sellers are likely to list
products more often in a platform with monthly subscription fee
 OTHER RECOMMENDATIONS

Cross-Sell Enhance Seller Expand Loyalty

Warehousing Facilities Support Mechanisms Programmes

Large sellers don’t Besides pricing Differential fees

require warehousing mechanisms, the sellers structure for Platinum,
provided by platforms are concerned about Gold and Silver sellers.
since they possess their the level of support Charge differential
own godowns, while platforms offer them. commissions,
small sellers don’t hold Platforms should offer subscription fees, fixed
much stock. services such as seller fees, etc.
Warehousing options IT support, 24x7 seller
are most useful for hotline, etc., depending
medium-sized sellers. on the tiers of sellers.
THANK YOU!