After eliminating the competition with help from the government, Amazon to "harmonize" commission rates in France

Feb 14, 2013
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78029242Amazon has been welcomed with open arms by the government. They bought their tapis rouge on Amazon, rolled it out from them on top of FNAC, Darty, Surcouf, and Virgin Megastore, and let them walk right in. To give a brief summary, in the past year Amazon has opened new offices in Burgundy, and Pas de Calais, both of which came with tax benefits from local and national government. In the beginning of 2013, it’s become clear that FNAC’s stores just aren’t doing well – turns out people window shop at FNAC, and then go home and buy on Amazon. The Virgin Megastore, who’s two-stories doors were once a symbol of economic prosperity on the Champs Elysée, has declared Bankruptcy.

While the CEO of FNAC continues to complain about how the government is contributing to the death of Amazon’s local competitors, meanwhile Amazon has been woo-ing publishers and vendors with its low commission rates. Well, now that Amazon has taken significant market share, it is “harmonizing” its commission rates globally, and it’s sure as hell not being lowered, as LSA.fr reports.

Starting April 4th, publishers in France may see their commissions rise from 10.44% to 15%, while game sonsoles will pass from 10.44% down to 8%, and then back up to 15% in August. Computers will temporarilty drop from 7% to 5&, and then back up to 7% in August, and book delivery will be raised from a flat 0.30€ fee to 0.45€, according to Sellermania[fr].

When compared to Amazon’s principal remaining competitors, Priceminister (owned by Japanese giant Rakuten) and the American eBay, Amazon’s commission rates are still higher, by as much as 10% in some categories. Whether or not this move will be good for Amazon or not is unclear, though Amazon has been making all the right moves lately, so we’ll just have to wait and see. Perhaps this is there way of paying back the $252 Million in back taxes they owe.

Amazon will also be bringing its SVOD service to France in the Spring, via its London subsidiary Lovefilm. With Netflix’s announcement that they won’t be expanding to France anytime soon, Amazon will have only to compete with Canal+, and given their success elsewhere, they can afford to take a loss on the first, oh, 10 years.

Hat tip to Jeremie Berrebi for picking this up