As a seller on Amazon India, should one opt with Amazon Easy Ship? What price point it makes sense? How to make it profitable for low priced products?
As an Amazon India seller, the priority is to deliver the product on time to the end customer and have tracking details for delivery as well as maintain the stock and inventory. Amazon easy ship service offers exactly the same.
What is Amazon Easy Ship Service?
Amazon easy ship service is a logistic service for Amazon India sellers. In this program, Amazon provides the complete logistics solution for your delivery of goods to your customers. For each order, the items are picked up by Amazon team from seller’s location and delivered to the customer.
Amazon India makes sure the product delivers in good condition to the end customer and the customer satisfaction for the logistics is handled well by Amazon India.
Also Read: How to Register as a Seller on Amazon India.
Advantages of Amazon Easy Ship Program
Amazon’s easy ship program has the following major advantages for a seller
- Sellers can offer Cash on Delivery or COD option. If you use FBM or fulfilled by merchant where you ship your products for orders from Amazon, the cash payment option at the time of delivery is out of the equation.
- Amazon also offers to pay on delivery where the customer doesn’t pay at the time of making an order but only pays at the time of delivery of goods known as Pay on Delivery (POD). Seller using Amazon’s logistics can offer a pay on delivery by Amazon.
Clearly looking at the advantages, it makes sense for a seller to always consider Amazon’s logistics instead of trying to handle the delivery all by yourself.
The Cost Part
Amazon charges a fixed fee to sellers in easy ship program based on local, regional and national delivery locations. The easy ship fees are computed on volumetric or actual package weight whichever is higher.
Here is the official chart for fees which can also be found here.
- Local – For delivery in the same city as the seller.
- Metro – The delivery in metro cities like Mumbai, Delhi (including Gurgaon and Faridabad), Bangalore, Hyderabad, Kolkata, and Chennai. Metro cities are pre-defined by Amazon India logistics here.
- National – All other location delivery excluding local seller location and metro locations.
Who can go for Amazon Easy Ship Service?
Typically if your product is priced above Rs. 500, it is easy to opt for an Amazon’s easy ship program or else the logistics cost will become too high for the product. Let us see this with an example.
Assume that you sell food products with the weight of your package is 600 grams. Here is the table for the logistics cost for local delivery, metro delivery and PAN India delivery of the product.
|First 500 Grams||30||45||55|
|100 Grams there after||30||35||45|
|Total Logistics Cost||60||80||100|
On top of the above cost, you have to add GST and other service charges (This is not service tax but the cost of services being offered to the seller).
So if the MRP of the product is Rs. 120, the shipping cost of Rs. 100 along with service charges and GST which comes to roughly Rs. 120 has to be borne by the customer making the product price zoom to almost double.
Customer will not like to pay such high delivery charges and the seller can’t bear it either and so the seller has to price the product lot higher. Still, we haven’t considered the Amazon’s India commission for each order which is around to 6% to 8% depending on the product category.
So for the seller to make money selling such a low-end product, the price has to go up and in the range of Rs. 200 and then charge Rs. 40 to Rs. 50 as the delivery charge to the end customer.
Amazon Easy ship program makes perfect sense for sellers having high-value goods but for low priced items, either club them for more quantity. As an example, we can batteries are available on Amazon India but are priced higher with bulk quantity like a pack of 8 or stuff like that to save on the logistics part and yet make it beneficiary to the seller and the customer.
Further Reading …