Amazon and Flipkart Revamp Seller Fees, Penalties Ahead of Festive Season

In the weeks preceding the holiday shopping season, e-commerce giants Flipkart and Amazon have adjusted their fee and penalty regimes for vendors on their sites. Many small and medium-sized businesses are already struggling to make ends meet, and this move will only make their financial situations worse, according to the sellers. Amazon India has announced on its seller forum that starting August 17, 2026, the way it determines the costs for merchants who use the Easy Ship and Self Ship services has changed.

Amazon’s Move Alarming for Sellers

Sellers participate in Easy Ship by keeping goods in stock, packing them upon receipt of an order, and then transferring them to the Easy Ship Pickup executive. Once the product is ready, the executive will send it and make sure it arrives on time. Without involving Amazon's operations, sellers engage in self-ship when they package and ship their own products through their own courier or delivery service. A percentage of the order value is now used to calculate the fee, which was previously based on referral charges specific to each category.

The new system states that for transactions under INR 10,000, merchants will be charged 10% of the total, while for orders between INR 10,000 and INR 50,000, the price is 8%. Additionally, there is an 18% goods and services tax on top of the 5% charge for sales between INR 50,001 and INR 100,000 and the 2% charge for orders beyond INR 100,000. Both manual order cancellations (when the seller doesn't confirm shipment within 24 hours of the expected ship date) and automated order cancellations (when the buyer requests the cancellation) are subject to the cancellation fee.

With effect from September 7, 2026, Amazon has announced that closing fees across its Fulfilment Center, Easy Ship, and Seller Flex channels will be increased. Regardless of the product's price range, Amazon always charges a closing fee when selling it. This charge changes when a vendor chooses a different fulfilment method. For products priced up to INR 500, the cost will increase by INR 1, and for products priced over 500 INR, it will increase by INR 3. A rise in gasoline and logistics expenses was the reason given by the corporation for the hike.

Reactions From Sellers

Sellers on Amazon's seller forum have explained that cancellations sometimes happen for reasons beyond their control, such as when delivery people don't show up for a pickup. In such cases, the vendors questioned why they should be charged cancellation fees. An additional vendor informed us that on similar purchases, the overall fee differential between Easy Ship and Amazon's fulfilment network may reach INR 45 per unit.

According to the vendor, this disparity makes for an unjust playing field. Meanwhile, starting August 23, 2026, Flipkart has implemented a three-tiered penalty system for order fulfilment failures. In this system, there is a fine of INR 30 per shipment for shipments that are not prepared for pickup by the stipulated Dispatch By Date (DBD). A punishment of INR 60 per shipment will be imposed in the event that an order is cancelled, either by the seller or automatically, following three missed shipping dates. When an order is delayed and then cancelled, the penalty per shipment increases to INR 90.