Amazon India eliminates referral fee for sellers on products below Rs 300

Ecommerce giant Amazon's India unit Amazon India has announced that it will eliminate its referral fee for products priced below Rs 300, a move that is set to benefit millions of sellers across the country.

The referral fee, which ranges from 2% to 4%, is a commission Amazon charges for every sale made through its platform. 

The zero-referral-fee policy will take effect on April 7, 2025, and will apply to over 1.2 crore items across more than 135 categories, according to company officials.

Referral fee elimination for low-priced products  

Until now, sellers listing goods below Rs 300 on Amazon had to pay a referral fee starting at 2%. A senior executive at Amazon India reportedly confirmed that the company wants to support small and medium-sized businesses by waiving this fee.

The initiative follows a previous reduction in seller fees for several categories in September 2024, when Amazon cut charges that ranged between 3% and 12%.

Reduced shipping costs  

In addition to scrapping the referral fee, Amazon is lowering shipping rates to help sellers reduce expenses even further. It has introduced a flat national shipping charge of Rs 65 for sellers who use external fulfilment channels like Easy Ship and Seller Flex, down from the earlier Rs 77.

The weight handling fee for lightweight items under 1 kilogram has also been lowered by up to Rs 17. Amazon India says sellers shipping more than one unit at a time could see as much as a 90% cut in selling fees on the second unit.

Impact on sellers  

Amit Nanda, director of Selling Partner Services at Amazon India, underscored the importance of these changes by pointing out that a product such as shorts priced at Rs 299 would previously have incurred fees of around Rs 130. With the new fee structure, that cost drops to about Rs 70.

While it is unclear how this step might affect Amazon's overall revenues in India, Nanda said the company remains focused on the long term and believes these reductions will ultimately be beneficial, even for its bottom line.

Amazon India's marketplace arm, Amazon Seller Services, reported a 14% rise in operating revenue to Rs 25,406 crore in fiscal year 2024, backed by increased operational efficiencies. During the same period, the company cut its net loss by 29% to Rs 3,470 crore.