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Amazon wants sellers to bundle small items

When asked about the minimum cap of Rs 200, an Amazon India spokesperson said, “We do work with sellers and brands to offer better value to customers through bundled packs and multipacks.”

, TNN|
May 30, 2019, 11.54 AM IST
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(This story originally appeared in on May 30, 2019)
NEW DELHI: Amazon is asking several sellers, including FMCG companies that sell small-ticket items, to increase the value of goods being sold on its platform to Rs 200 by bundling several products together. This is for pin codes where Amazon Pantry, the e-tailer’s grocery arm, is not available. The move will enable the e-tailer to rake in higher margins, sources said, and mitigate the high cost associated with delivery of everyday consumables. Several sellers have been asked to increase the “net price to consumer”, which is the price the consumer pays for a product. This is usually lower than the maximum retail price (MRP) as it is calculated after discounts.

“Earlier, we could sell items that cost Rs 100. But now we have been asked to bundle products in a manner so that the ‘net price to consumer’ is Rs 200 or higher. This has led to major restructuring at our back end as everything has to be done from scratch,” the CEO of one of India’s largest FMCG companies told TOI.

Amazon, which has committed $500 million to food retail, delivers goods to nearly all pin codes in India. Amazon Pantry, which specialises in grocery deliveries is currently available in around 100 cities. Although small, e-commerce sales are growing at a fast clip for FMCG players. And they count Amazon as one of their biggest partners for online sales.

When asked about the minimum cap of Rs 200, an Amazon India spokesperson said, “We do work with sellers and brands to offer better value to customers through bundled packs and multipacks.”

While the consumables category on Amazon (toys, baby, FMCG, beauty) has grown over two times in the last 12-18 months, giving customers access to over 25,000 brands, competition is catching up fast. As reported by TOI, Amazon’s arch rival Walmart-backed Flipkart plans to open offline grocery stores. The move comes after it opened its fifth online grocery store Supermart in Mumbai. Mukesh Ambani-led Reliance Retail, too, is gearing up for an e-commerce onslaught and groceries could be one of the focus areas for the Indian conglomerate.

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