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Amazon India has announced the removal of its referral fee for sellers listing products priced below Rs 300. The move aims to attract more sellers to the platform and applies to over 1.5 crore products spanning 135 categories, according to a senior company executive.
Previously, Amazon levied a referral fee ranging between 2-4% on each product sold. In addition to scrapping this fee, the e-commerce giant has also reduced national shipping charges for sellers utilizing its external fulfillment channels, such as Easy Ship and Seller Flex. The charges have been reduced by nearly 16%, now ranging from Rs 65 to Rs 77 per order.
Easy Ship enables Amazon to collect and deliver orders directly from sellers, whereas Seller Flex allows Amazon to operate a segment of the seller’s warehouse as a fulfillment center. Furthermore, weight handling fees for lightweight items under 1 kg have been slashed by up to Rs 17. These revised fee structures will be effective from April 7, 2025.
Besides referral and shipping fees, Amazon sellers also incur weight handling fees and additional costs for services such as packaging, picking, and storage. The company’s seller base in India stood at 16 lakh as of last year’s festive season, marking an increase from 13 lakh the previous year.
It remains to be seen how these fee reductions will impact Amazon’s revenue in India. However, the company anticipates long-term growth from these changes. Financial data sourced from business intelligence platform Tofler indicates that Amazon Seller Services, the company’s marketplace arm in India, registered a 14% rise in operating revenue to Rs 25,406 crore in FY24. Additionally, the net loss was reduced by 29% to Rs 3,470 crore due to enhanced operational efficiencies.
This development comes amid a growing trend of e-commerce and quick commerce platforms introducing various charges on buyers. While Amazon refrains from imposing a platform fee, it does collect a Rs 49 offer processing fee from customers. In contrast, Flipkart, Amazon’s key rival in India, has implemented a ‘Protect Promise’ fee of Rs 49 on select products, along with platform and packaging charges.
Miscellaneous fees have become prevalent in the e-commerce sector, following similar trends in food delivery services like Swiggy and Zomato, which introduced platform fees starting at Rs 2 in 2023, later increasing them to Rs 10.
Amazon’s recent fee reductions are expected to support the growth of small and medium-sized businesses in India. The company reports that over 90% of its sellers belong to this category, with nearly half based in tier 2, 3, and 4 cities. By easing costs for sellers, Amazon seeks to strengthen its foothold in India’s competitive e-commerce landscape.
