Amazon India Eliminates Referral Fees on Products Under ₹300, Offering Major Relief to Sellers

In a major relief to sellers, Amazon India has removed referral fees on over 1.2 crore products priced below ₹300. This move marks Amazon's biggest-ever reduction in seller fees, benefiting lakhs of small businesses that sell on the platform across the country.

Previously, sellers had to pay a 2-4% referral fee on every product sold. Referral fees act as a commission that Amazon charges for each successful sale made on its marketplace. With this new policy, sellers across 135+ product categories will no longer have to pay referral fees for low-priced items, allowing them to increase profitability and offer more competitive pricing to consumers.

Why is Amazon India Removing Referral Fees?

Amit Nanda, Director, Selling Partner Services, Amazon India, stated that the initiative aims to make it more attractive for sellers to operate on Amazon.in. Currently, Amazon India hosts over 1.6 million sellers on its marketplace, and this step is designed to support their growth.

The zero-referral fee structure is expected to make Amazon a more lucrative e-commerce platform for small businesses, encouraging more sellers to list budget-friendly products and enhance their customer reach.

Additional Fee Reductions to Support Sellers

Beyond the referral fee waiver, Amazon India has introduced a series of cost reductions to further support sellers. These include:

1. Lower National Shipping Rates for External Fulfillment Channels

Amazon has announced a simplified flat rate for sellers using external fulfillment methods like Easy Ship and Seller Flex.

• The new national shipping rate starts at ₹65, a 16% reduction from the earlier rate of ₹77.

• This makes shipping more affordable for sellers who prefer to use their own logistics for order fulfillment.

2. What is Easy Ship & Seller Flex?

• Easy Ship: Amazon collects packages directly from sellers and delivers them to customers.

• Seller Flex: Amazon manages a portion of the seller’s warehouse as an Amazon fulfillment center, optimizing logistics.

3. Weight Handling Fees Cut for Lightweight Products

• Amazon has reduced weight handling fees by up to ₹17 for items weighing under 1kg.

• Sellers who ship multiple units per order can save over 90% in selling fees on the second unit.

• These changes significantly lower operational costs and encourage bulk selling.

When Will the New Fee Structure Be Implemented?

The revised zero referral fees and reduced shipping charges will take effect from April 7, 2025. This gives sellers ample time to adjust their pricing and inventory strategies accordingly.

Why This Move Matters in India’s E-Commerce Landscape

The decision to eliminate referral fees and reduce other charges comes at a time when online retail platforms are increasing various fees to maintain profitability. Many e-commerce players, including Amazon, have introduced platform-related charges such as:

• ₹49 processing fee for consumers

• Storage fees for sellers

• Weight handling and fulfillment charges

However, Amazon India's latest move shifts its approach towards supporting small businesses rather than increasing platform fees.

Rising Competition from Shopify, ONDC & Social Media Selling

This fee reduction strategy also aligns with the growing competition from alternative selling platforms such as:

• Shopify – An independent e-commerce platform allowing businesses to create their own stores.

• ONDC (Open Network for Digital Commerce) – The Indian government-backed initiative aiming to decentralize e-commerce.

• Social Media Marketplaces – Platforms like Instagram, Facebook, and WhatsApp are enabling direct selling, reducing reliance on traditional e-commerce marketplaces.

With sellers having more choices than ever before, Amazon India's move to cut fees is a strategic decision to retain and attract more merchants to its platform.

Amazon’s Commitment to Seller Success

"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. As we gain efficiencies in our operations, we ensure those benefits reach our sellers and customers," Amit Nanda added.

Conclusion: A Win-Win for Sellers and Customers

By removing referral fees on products below ₹300, cutting shipping costs, and lowering weight handling charges, Amazon India is making it more affordable for small businesses to sell online. These changes not only boost seller profitability but also help consumers access lower-priced products on the platform. As e-commerce competition intensifies, Amazon’s new pricing strategy could strengthen its hold on India’s thriving online marketplace.