Amazon and Flipkart Revise Seller Fees and Penalties Ahead of Festive Season
E-commerce majors Amazon and Flipkart have revised their seller fee and penalty structures ahead of the festive shopping season in New Delhi, raising concerns among small and medium enterprises over thinning profit margins.
Amazon India revised its calculation model for order cancellation fees for sellers using its Easy Ship and Self Ship services from August 17, 2026. Under the new model, cancellation fees are determined as a percentage of the order value rather than being tied to category-specific referral charges. Amazon now charges 10% on orders below Rs 10,000, 8% on orders between Rs 10,001 and Rs 50,000, 5% on orders between Rs 50,001 and Rs 1 lakh, and 2% for orders exceeding Rs 1 lakh, with an additional 18% goods and services tax applied.
The penalty is imposed when a seller initiates a cancellation for reasons other than a customer request, or when an order is automatically cancelled because the seller fails to confirm shipment within 24 hours of the estimated ship date. Amazon is also raising its closing fees across Fulfilment Center, Easy Ship, and Seller Flex channels from September 7, 2026. Closing fees will increase by Rs 1 for items priced up to Rs 500 and by Rs 3 for items priced above Rs 500, which the platform attributed to higher fuel and logistics expenses.
An Amazon spokesperson stated that revised cancellation fees encourage timely fulfillment and only apply to seller-initiated cancellations, which account for under 1% of marketplace orders. However, sellers raised concerns on the company's forum that penalties could be incurred due to external issues, such as delivery personnel failing to arrive for pickups.
Meanwhile, Flipkart has introduced a three-tier penalty framework effective August 23, 2026. A fine of Rs 30 per shipment applies if an order is not ready by the Dispatch By Date (DBD). A seller cancellation or an automatic cancellation following three missed deadlines carries a Rs 60 penalty, while an order that is both delayed and subsequently cancelled incurs a Rs 90 penalty. New sellers on Flipkart receive an exemption for their first three months.
Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), noted that small businesses face mounting costs and urged platforms to avoid making sellers the financial shock absorbers for logistics delays, platform errors, and unexpected demand spikes.
