NEW YORK – Amazon has been recruiting Indian vendors to sell their goods directly on Amazon.com, this holiday season, to lower prices for consumers and add more products to Amazon’s lineup to charge sellers hefty fees.
Amazon began doing this two years ago and since then at least 27,000 Indian sellers have signed up, ranging from giants like the Tata Group who sells their Titan watches, to smaller firms like The Boho Street who sells tapestries, incense and handcrafted copper mugs. Founder Abhishek Middha, says that Amazon provides a greater access to the American market.
“Amazon handles everything in the U.S., from shipping to customer handling, so we can focus on making the best quality products and adding more products to our catalog,” he told The New York Times, which reported the story.
Though Middha used to sell his products on other marketplaces like Etsy, he switched almost entirely to Amazon two years ago because of its vast scale and suite of services as last year, his sales rose to four times the usual level, on Cyber Monday, propelling his annual revenue to $1.9 million.
On Black Friday this year, his sales tripled compared with the previous day.
“Amazon taught us how to create a brand,” he said.
The growth of Amazon’s Indian global seller program shows how sophisticated its strategy has become as the company operates India’s second-largest e-commerce site, Amazon.in, which caters to the country’s growing base of online consumers.
But Amazon also sees India as a source of cheap and high-quality products that can be sold on its American site to help it take market share from competitors like Walmart, especially in the apparel category.
Abhijit Kamra, who heads Amazon’s global selling program in India, told The New York Times that Americans already buy many products that are made in India, such as cotton towels.
“What we are trying to do is compress the global supply chain and bring sellers and customers closer. Some of the 75 million Indian products on the main Amazon.com site, such as saris, tend to attract customers of Indian heritage. But other categories, like jewelry and health products, have wider appeal,” he said in a phone interview.
Amazon has listed many of its Indian products on a special page, Amazon.com/India, to help customers in the United States find them more easily.
For the holiday season, the company spent months helping sellers prepare by stockpiling goods in the United States and programming special “lightning deals” to generate shopper interest and in some cases, the company even lent sellers money for inventory.
According to the New York Times article, a merchant who chooses the full array of Amazon services, including buying advertising and contracting with the company to store and deliver the products from Amazon’s American warehouses, typically hands over about one-third of the item’s sale price in fees and commissions.
Thus, the India program has become quite profitable for Amazon’s bottom line.