All-India vendors’ body voices concern over Amazon’s new ‘regional visibility programme’

The All India Online Vendors Association (AIOVA) claims that Amazon India has implemented a new ‘regional visibility programme’ that restricts products to regional zone visibility. Simply put, a Mumbai-based seller will not be able to sell products to customers in New Delhi unless they stock up inventory at Amazon’s fulfilment centres in New Delhi, an AIOVA spokesperson said.

In a trade advisory notice sent to its sellers, a copy of which is with FE, AIOVA said: “We have not found any communication of announcement of such policy. Sellers are being asked by Amazon to increase stocks in regional cluster of Amazon by using Amazon fulfilment centres to service those pincodes.” “A fast and reliable delivery promise is one of the main reasons our customers choose to shop from sellers on our marketplace. We provide sellers a range of options to fulfil customer orders fast and reliably,” an Amazon India spokesperson told FE.

As per sellers, there will be additional compliance costs of GST to take registrations and additional place of business in each state and fulfilment centres of Amazon apart from the burden of filing returns in each state.

Amazon India’s FBA (fulfilment by Amazon) policy facilitates sellers to store their products in Amazon warehouses and the e-commerce major packs and delivers the products, provides customer service and handles returns.

The AIOVA spokesperson said when a product is shipped from Amazon’s Mumbai fulfilment centre to customers in New Delhi, the seller is charged a national shipping fee by the firm. But if a product is shipped from a New Delhi centre to a customer in the city, sellers would need to pay a regional shipping fee which would be lower. But AIOVA claims this advantage is “being offset by additional closing fees (not chargeable in current location) in the FBA model and transportation costs to transport goods to each cluster”.

AIOVA further said calculations by a seller point out that in order to do monthly sales of Rs 2 lakh currently, a seller has to maintain inventory of only Rs 1 lakh in his own location and sell across all pincodes. But now, as stock has to be kept in clusters, “he will require to invest additional Rs 4 lakh to do the same amount of business”. In the notice, AIOVA has advised sellers to consider the issues as “they may face low sales or additional cost of sales due to this unannounced system changes.”