Paytm to slash seller commissions to narrow competition gap with online retail giants

Rebecca Menezes | Sep 10, 2020

Being in the background may have been fine in the past. But, now Paytm would like be at the front and centre of online retail. The etailer is looking to give the top players a run for their money by climbing up to their level.

International ecommerce giant Alibaba controls 40% of Paytm with a major stake in the company. Paytm’s shares are now almost at par with Flipkart’s. This makes it a strong contender in the online retail front. The marketplace also launched an online shopping app – Paytm Mall. And, Alibaba-backed this too with an investment of a whooping $177 million, thus increasing the Chinese etailer’s stake in the Indian ecommerce company.

It doesn’t end there though the etailer is taking things a step further by slashing seller commissions!

Cutting commissions to compete

Like Flipkart, Paytm too is reducing seller charges.

In an email to its online sellers, Paytm said, “To help you get more out of selling with Paytm, we are lowering the base commissions for certain categories to 1.65%,” the company said in an email to its sellers. “With a lower commission, you can now offer the most competitive prices to your customers and increase your chances of boosting sales.”

The revised commissions will be made effective from March 17. The new commissions will affect categories like –

  • Home décor
  • Kitchen category
  • Furnishing
  • Hardware and fittings

Adding commissions on shipping

At the same time, the ecommerce platform will be collecting marketplace commission on shipping charges, based on certain categories.

In an email to online sellers, the company mentioned, “Please be informed that going forward, you will be charged marketplace commission on the shipping charges that are being decided by you. This will be in addition to the 2.7% payment gateway charges that are currently applicable to your shipping charges.

This change will be visible to you under the Payout reports and Datewise/Orderwise tabs. No changes are required from your end.”

This commission will become applicable by March 20 from 12 pm onwards.

Sellers supportive of Paytm’s commissions change

The All India Vendor’s Association a lobby group of 2000 online sellers had a positive reaction to this change as sellers will receive maximum benefits on the platform.

No one really charges category commissions on shipping fees. All commissions are based on the selling amount. So, some are confused as to why Paytm is charging commission on shipping now.

Sellers on the platform will we allowed to charge additional shipping fees when their products are under promotional offers and available at an exceptionally low price. The seller requirements have also been toughened up to control the quality of sellers.

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Rebecca Menezes

Rebecca Menezes

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