Amazon India Drops Referral Fees On 1.2 Crore Products In Under Rs 300 Price Category

Highlights

• Amazon India will eliminate referral fees on over 12 million products under ₹300 to support sellers.
• It will impact products spanning 135+ categories starting April 7.
• National shipping rates, weight handling fees, and multi-unit shipping costs are being lowered to further reduce sellers’ expenses.
• Amazon India supports over 1.6 million sellers, mainly small businesses in tier II-IV cities.

Amazon India is making a big move to support small businesses by eliminating referral fees on over 12 million products priced below ₹300 starting April 7. This is the company’s biggest fee reduction so far, aimed at helping sellers expand their selection and offer lower prices.

What’s Changing for Amazon Sellers?

The fee waiver will apply across 135+ product categories, including apparel, footwear, jewellery, groceries, home décor, beauty, toys, and kitchen essentials. Currently, sellers pay referral fees ranging from 2% to 16%, but this cost will now be removed for low-value products.

Amazon India is also making shipping more affordable for sellers using external fulfilment channels like Easy Ship and Seller Flex:

• National shipping rates will drop from ₹77 to ₹65.
• Weight handling fees for products under 1 kg will be reduced by up to ₹17.
• Sellers shipping multiple units in one order could save up to 90% on the second unit’s selling fees.

Amit Nanda, Director of Selling Partner Services at Amazon India, explained that these changes are designed to reduce costs for sellers and help them compete better, especially for everyday low-priced products.

“As part of the continuing action to help sellers reduce their cost of doing business, we are now making a really large change in terms of the drop in selling fees on Amazon. [..] In the past also, we have made fee drops to help sellers. But they were more focused, and not as wide.” Nanda told ET. He also highlighted that referral and shipping fees account for nearly 90-95% of what sellers pay on the platform.

This move follows a fee reduction in August 2024, when Amazon lowered selling fees by 3% to 12% across 59 product sub-categories before the festive season.

Regulatory Challenges And Market Expansion

The fee cuts come at a time when Amazon India is under increasing regulatory scrutiny. In August 2024, the Competition Commission of India (CCI) found that both Amazon and Flipkart had violated antitrust laws by favouring select sellers. The case, which began in 2020, is now being heard by the Karnataka High Court.

Meanwhile, Amazon India continues to grow, hosting over 1.6 million sellers, 90% of whom are small and medium businesses. Over 50% of these sellers are based in tier II, III and IV cities.

In September 2024, Samir Kumar took over as Amazon India’s country manager replacing Manish Tiwary. The company also entered the quick-commerce space in December 2024, launching a 15-minute delivery service in Bengaluru.

FAQs

Q1. What change is Amazon India implementing for products under ₹300?

Answer. Amazon India is removing referral fees on over 12 million products priced below ₹300 across 135+ categories starting April 7.

Q2. How is Amazon reducing shipping costs for sellers?

Answer. Amazon is dropping National shipping rates from ₹77 to ₹65, weight handling fees for products under 1 kg are being reduced by up to ₹17, and multi-unit shipping costs will decrease significantly.

Q3. What is the goal of these fee reductions by Amazon India?

Answer. The latest Amazon changes aim to support small businesses, lower sellers’ costs, and help them offer more competitive prices for low-value products.

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