Flipkart has slashed its monthly burn rates to optimize revenues till the company secures a fresh fundraise. As another measure for the same, the e-commerce platform has now scraped the commission fees for over 100,000 sellers so as to advance the cost benefits. It is of the opinion that this move will not only profit the sellers but will also increase discount margins for shoppers. It’ll hence bring more customers to the platform and will aid Flipkart in leading the market-share battle.

The merchants chosen for commission cut sell everything ranging from books and televisions to smartphones on the marketplace. However, India’s foreign direct investment (FDI) regulations limit online retailers from offering discounts and deceptions like such deceive the regulations and create cut-throat competition in the market. Though end consumers relish discount offerings, the wider impact lies on the survival of e-platforms in the future.

Other than commission cuts, online sites disguise discounts in form of cashbacks while a few of them adopt ways of funding sellers. This, in turn, keeps discounting alive coupled with finding loopholes in regulations. For Flipkart, today’s move would not impact its margins in a huge manner. The e-retailer previously cut costs across the board and is in a position to pass on some of those benefits to sellers. Adding to it, Flipkart vice-president and head of marketplace Anil Goteti said,

We’ve taken multiple measures on our supply chain side to reduce costs and streamline operations—in the sense, wherever there are leakages, we have fixed them. Given the efficiencies we’ve realized and the active growth we’ve gotten last year… we want to pass it back to our sellers, who in turn will work on passing those back to our consumers.

The move will come into effect from 15 March, charging a lower commission fee to all sellers across all verticals on Flipkart. These revised charges will be advanced to all tier of sellers—gold, silver, and bronze. The commission cut will reduce the fixed fees by 80-90 percent. This will also diminish the collection fees by about 40 percent for all cash on delivery (CoD) orders. Along with the said move, Flipkart might also lower the shipping fees as a part of its cost strategies.

The company incubated three broad objectives for the company this year, one of which was cutting expenses in a big way. The targets were set up by Flipkart chief executive officer Kalyan Krishnamurthy, following which we witnessed shut down off logistics unit Ekart and halting of firm’s moonshot projects. The company announced amendment in commission charges, the last November offering 90,000 sellers full cost of product returns.

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