🧠 Food for thought

Implications, context, and why it matters.

Zero referral fees do not mean zero selling costs

• The removed referral fee was a percentage commission on each sale, ranging from 2% to 20% by product category 1.
• Sellers still pay a fixed closing fee per order to cover transaction costs, with the charge tied to the item’s price 1.
• Weight handling fees for shipping continue, based on package size, weight, and delivery distance 1.
• Sellers who use Amazon warehouses still pay monthly storage plus pick-and-pack charges, and Amazon fees carry 18% GST (Goods and Services Tax) 1.

Focus on low-price, high-frequency categories as competition heats up

• Amazon India said it will remove referral fees on over 12.5 crore products priced under ₹1,000 from March 16, 2026, covering more than 1,800 categories 2.
• An earlier step in April 2025 removed referral fees for 1.2 crore items under ₹300 across 135 categories 2.
• Amazon said sellers can cut referral costs by up to 70%, lower Easy Ship logistics fees by over 20% for items below ₹300, and get over 90% off selling fees for second units in multi-item packages 2.
• Amazon said the updates support operational efficiency and profitability for small businesses in Tier II and Tier III cities 2.
• Flipkart expanded zero-commission terms in November 2025 to items under ₹1,000, adding pressure in Indian e-commerce 2.