Selling on Amazon India ? Here are some tips on pricing
(Disclaimer : This article is an independent opinion and is only for reference. Anyone intending to use this guide should use it only as a reference. Tiger Pug Pte Ltd is not responsible for any errors or omissions and is purely providing this as a guide)
Selling on Amazon is easy on one hand and complex on the other. Its a great platform and fast expanding its capabilities
As a brand or seller, you need to work on the 5Ps of marketing for selling online
Product - which product will you sell?
Place - which marketplace will you sell on. And will you also sell on your own brand online store ?
Packaging - how will you package your product to be appealing to your online buyer while meeting ecommerce requirements?
Promotions - how will you promote and sell your product?
Price of your product
Product pricing for Amazon India should include the following
Your cost price + Packaging + Labelling + Freight + Duties + Customs Clearance + Margins
India logistics cost to deliver your products to the Amazon warehouse for FBA
Amazon Storage Fees (Fulfilled By Amazon is preferred unless you are planning to use your common inventory to sell on multiple marketplaces)
Amazon handling fee . This is per order fulfilled - referred to as Closing Fee
Amazon Pick and Pack Charges
Amazon commission also called referral fee (which includes the payment gateway or payment collection charge)
Amazon delivery charge - Amazon will send its logistics partner to collect the orders from your fulfilment center. Also referred to as Shipping Fee
Unsold inventory cost
Unsellable returned products
Selling team costs
Customer Service costs
Marketing costs for Amazon promotions
Discounts and deals for end consumers
Goods and Services Tax (GST)
India has a concept of a MRP - Maximum Retail Price. All products need to carry the MRP label . Ideally this should not be changed once applied. Products cannot be listed or sold for more than the MRP. All products listed on Amazon need to have the MRP listed, followed by the offer price
GST is to be included in the MRP. Once goods are sold to end consumers, the proportionate GST that is collected from the consumer is to be accounted for and paid to the Government. At this stage, the seller can deduct any GST paid to vendors, product suppliers, Amazon and others and only pay the balance to the Government. The Government Online GST system allows the business seller to view details of all GST paid by the seller to vendors, suppliers , Amazon and others and then log in the balance that they need to pay (Collected from sales). GST is therefore not a cost. It is finally paid for by the end consumer or business buyer. However before such final sale happens, the seller has to pay the duties on all inputs - products and services that the seller purchased. Hence it affects cash flow, where the GST is paid for purchases but recovered only after the product is sold
We hope the above has given you an overview of how to price your products for sale on Amazon India
If you are an overseas brand that already sells on other Amazon sites, you can work with Tiger Pug for India.
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