/Cloudtail’s fee to Amazon India more than doubles in two years

Cloudtail’s fee to Amazon India more than doubles in two years

(This story originally appeared in on Jan 02, 2021)

Cloudtail, one of the largest sellers on Amazon India, has seen its marketplace fee or commission to Amazon India more than double in the last two years in terms of the percentage of its revenue it pays to sell on Amazon India.

Cloudtail, which is a joint-venture between Infosys co-founder Narayana Murthy’s Catamaran Ventures and Amazon, paid nearly 9% of its revenue at Rs 980 crore as platform selling fee for the year ended March 2020, compared to a little over 4% in the year ended March 2018 at Rs 315 crore.

This component was under 6% in the financial year 2019 at around Rs 561 crore, according to annual reports of the company. For the financial year 2020, Cloudtail reported revenue of Rs 11,413 crore.

This is a fee that Cloudtail has largely paid to Amazon India for selling its goods through its marketplace. Though it is attempting to sell on other marketplaces also, Cloudtail’s core business comes from Amazon India.

While the jump in commission is significant, it is still less than the average commission of around 25% which independent third-party sellers pay to sell goods online.

This has been one of the issues raised by smaller sellers, who accuse online platforms of preferential treatments to select large sellers who move a significant part of their volumes. TOI has previously reported how select large sellers end up paying lower fees to marketplaces like Amazon India and Flipkart. E-commerce companies have maintained their policies are the same for all their sellers. They, however, have performance-linked incentives for their merchants.

Sellers and traders have raised this as an issue with the government. As a result, over the last two years, the government has also increased its scrutiny of large sellers closely linked with e-commerce companies.

When contacted, a spokesperson of Cloudtail declined to comment on the increase in its outgoing commission. Amazon India did not respond to an email query.

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