Amazon India has announced a major decision aimed at helping small businesses and boosting seller growth on its platform. The e-commerce giant will no longer charge referral fees on products priced under Rs 300. This change will impact over 1.2 crore low-value items on Amazon’s marketplace. Referral fees are typically paid by sellers as a commission to Amazon for every product sold. By removing these fees, Amazon hopes to make selling more profitable for its partners and encourage them to offer more affordable options to customers.
The initiative was introduced to make selling on Amazon more attractive, especially for small and medium-sized businesses. Amit Nanda, Director of Selling Partner Services at Amazon India, said the company’s goal is to help sellers grow by offering better deals on everyday items. He explained that as Amazon becomes more efficient in its operations, it is passing those benefits on to its sellers and customers.
Impact Across Multiple Products
The removal of referral fees will apply to 135 product categories, including apparel, shoes, jewellery, grocery, beauty products, toys, kitchen essentials, home décor, and pet supplies. This change is expected to make it easier for sellers to offer competitive prices, especially on low-cost items that customers buy frequently.
In addition to eliminating referral fees on certain items, Amazon has also reduced shipping and handling fees to further support sellers. The updated fees will allow sellers to increase their profit margins and expand their selection of products.
Reduced Shipping Costs for Sellers
Amazon has introduced a flat rate for shipping through external fulfilment services like Easy Ship and Seller Flex. Under this new model, the starting shipping rate has been reduced from Rs 77 to Rs 65. Flat rate shipping means that sellers will pay the same shipping cost, regardless of the package’s weight, size, or delivery distance, as long as it falls within certain limits.
Easy Ship is a fulfilment option where Amazon collects packages directly from the seller’s location and delivers them to customers. Seller Flex, on the other hand, allows Amazon to manage a portion of the seller’s warehouse, treating it as part of the Amazon fulfilment network. These fulfilment options give sellers more flexibility and convenience while reducing logistics costs.
Amazon has also reduced the handling fees for lightweight items weighing less than 1 kilogram. This reduction, which amounts to savings of up to Rs 17 per item, will help sellers manage their costs more effectively. Sellers who ship more than one item at a time will benefit even more, with savings on the second unit reaching up to 90%.
New Fee Structure Effective from April
These changes, which take effect on April 7, 2025, are expected to encourage sellers to grow their businesses and offer a wider variety of products. With over 1.6 million sellers on its platform, Amazon India’s updated fee structure is designed to create a more supportive environment for small businesses and e-commerce entrepreneurs.
By removing referral fees, reducing shipping rates, and lowering handling charges, Amazon aims to strengthen its relationship with sellers, improve their profitability, and provide customers with more affordable options across various product categories. This move reflects Amazon’s ongoing efforts to enhance its marketplace and promote sustainable growth in India’s e-commerce ecosystem.
