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Daily Briefing

Large online sellers pay lower online platform fee than smaller firms

Jan 7, 2019 by The Passage Team
Large online sellers pay lower online platform fee than smaller firms

Large online sellers who have affiliations or investments from e-tailers like Amazon and Flipkart are paying only about 5-11% of their revenue as marketplace fee, while regular third-party sellers typically pay at least 15% as platform fee.

The latest balance sheets of major online sellers like Cloudtail, Appario Retail, and Tech-Connect Retail show the amount they pay as platform fee to online marketplaces. Cloudtail paid Rs 315 crore (USD 45.2 million) as platform fee to Amazon on a revenue of Rs 7,149 crore (USD 1 billion) in FY2018. That’s 4.4%. It’s about 11% for Tech-Connect Retail, which owns one of the largest sellers on Flipkart, RetailNet.

Small third-party sellers have frequently alleged that e-commerce players favour these alpha sellers on their platforms. This is among the reasons that persuaded the government recently to issue a circular stating that sellers that have direct or indirect investment from the e-commerce platforms cannot sell on these platforms.

Source: Economic Times

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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