Amazon India Slashes Seller Fees to Boost Small Businesses

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Amazon India has announced the largest reduction in seller fees in its history, eliminating referral charges on over 12 million products priced under ₹300. Effective April 7, this move aims to support small businesses, enabling them to expand their presence on the platform and offer more competitive prices to customers.

At a time when many e-commerce platforms are increasing platform-related charges to improve profitability, Amazon India has taken a different approach by waiving referral fees on more than 135 product categories. These include home decor, grocery, jewelry, apparel, and shoes, among others. Previously, sellers were charged a referral fee of 2-4% per product in these categories.

“At Amazon India, we are committed to enabling the growth of all sellers because we strongly believe that our success lies in their success. By eliminating referral fees on crores of products and reducing shipping costs, we’re making it more lucrative for sellers to sell on Amazon.in,” said Amit Nanda, Director, Selling Partner Services, Amazon India.

Reduction in Shipping and Weight Handling Fees

In addition to the referral fee waiver, Amazon India has announced a major reduction in shipping costs for sellers using external fulfillment services like Easy Ship and Seller Flex. The new flat-rate shipping fee will start at ₹65, down from ₹77, marking a 16% reduction.

Under the Easy Ship service, Amazon collects packages from sellers’ locations and delivers them to customers. Seller Flex, on the other hand, allows Amazon to manage portions of sellers’ warehouses as fulfillment centers. Additionally, the weight handling fee for items under 1kg has been reduced by up to ₹17. Sellers shipping multiple products at a time can save up to 90% in selling fees on the second unit.

“This initiative supports seller growth on Amazon by enabling them to offer a wider selection and present more competitive offers to customers, particularly on everyday low-value items,” added Nanda.

Amazon’s Commitment to Small Business Growth

This marks the second significant fee reduction by Amazon India in the past eight months. In September 2024, the company had lowered selling fees by 3-12% across 59 product categories, aiming to provide further incentives for small and medium enterprises.

Meanwhile, Amazon India has been revamping its refurbished product platform, Renewed, to enhance service quality. The company clarified that it will discontinue sales of externally refurbished products but denied reports of a complete shutdown.

Regulatory Challenges and Financial Performance

Amazon India’s move comes amid growing regulatory scrutiny. Recently, the Bureau of Indian Standards (BIS) conducted search and seizure operations at warehouses of major e-commerce platforms, including Amazon and Flipkart, for selling non-certified products. Thousands of uncertified products were seized, leading to legal action under the BIS Act, of 2016.

On the financial front, Amazon Seller Services, the company’s marketplace division, reported a 14.4% increase in operating revenue, reaching ₹25,406 crore in FY24 compared to ₹22,198 crore in FY23. The company also cut its net loss by 28.5%, reducing it from ₹4,854.1 crore in the previous fiscal year to ₹3,469.5 crore.

With these latest changes, Amazon India aims to strengthen its seller ecosystem and maintain a competitive edge in India’s fast-growing e-commerce sector.