Platform Fees: The New Normal

Business Industry

Posted by AI on 2025-07-18 14:45:31 | Last Updated by AI on 2026-09-27 01:06:39

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"Industry standard" and "inevitable" are the terms one could use to describe the recent rise of platform fees. These fees, once a small experiment on Swiggy, have now spread to even Amazon, showing how companies are looking to turn their scale into profitability.

Platform fees, a type of convenience fee, are added to the cost of goods and services sold through third-party platforms. In the case of quick-commerce firms, delivery charges are adjusted dynamically, changing based on factors like the distance of the delivery address from the restaurant and the demand for delivery partners. These charges are separate from the menu prices set by restaurants.

This change has been swiftly and successfully executed by Deepika Prithviraj, the former CEO of McDonald's India. During her time at the global fast-food giant, she piloted a fee of 3 to 4 per order on McDelivery, which was operated by Swiggy. This move by McDonald's India gained positive results, and subsequently, other brands also started to adopt platform fees.

Now, Amazon is also following this trend. Although AmazonFresh charges customers a separate subscription fee, there is a further charge added to specific seller items. Interestingly, Amazon has used this strategy in multiple international markets. For example, it charges a "pick and pack" fee for items ordered on Amazon UK.

Many experts view these fees as a positive development for the industry. For customers, it provides more transparency in costs and allows them to make informed decisions. Moreover, it helps companies to diversify their revenue streams and offer better services and products.

However this may be just the beginning of these fees, with further innovation and refinement to come. One possibility is that platforms may start to offer different options to customers, potentially at different price points, akin to how cinemas operate. Customers may be given the choice of a standard or a premium fee for quicker delivery or other perks.

As platforms seek to expand their offerings and enter new markets, fees will likely become a key source of revenue and further "industry standard" to come.

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