Amazon, Flipkart restructure seller fees, penalties ahead of festival season

Amazon India and Flipkart have each overhauled the fees and penalties they charge third-party sellers, with the changes taking effect in late August and early September 2026 — weeks before India's peak festive shopping period, per YourStory.

Amazon's changes come in two parts. Effective August 17, 2026, the company revised how it calculates order cancellation fees for sellers using its Easy Ship and Self Ship services, shifting from category-specific referral charges to a percentage of order value. Under the new structure, sellers face a charge of 10% of order value for orders below Rs 10,000, 8% for orders between Rs 10,001 and Rs 50,000, 5% for orders between Rs 50,001 and Rs 1,00,000, and 2% for orders above Rs 1,00,000 — all subject to an additional 18% GST. The fee applies when a seller cancels an order on their own initiative, or when an order is automatically cancelled because the seller fails to ship within 24 hours of the estimated ship date. Separately, Amazon said it will raise closing fees across its Fulfilment Center, Easy Ship, and Seller Flex channels from September 7, 2026, by Rs 1 for products priced up to Rs 500 and Rs 3 for products priced above Rs 500, citing higher fuel and logistics costs.

An Amazon spokesperson told YourStory that seller-initiated cancellations account for less than 1% of orders on Amazon.in and that the revised fee is conditional, applying "only in the rare event of a seller-initiated cancellation." The company said it has measures in place to protect sellers when cancellations result from circumstances outside their control. Sellers responding on Amazon's forum pushed back, arguing that cancellations are sometimes caused by delivery personnel failing to show up for scheduled pickups, and questioned why those instances would incur a seller-side charge. One seller noted that total fee differences between Amazon's own fulfilment network and Easy Ship could reach Rs 45 per unit on comparable orders — a gap the seller called competitively unfair.

Flipkart, meanwhile, introduced a three-tier monetary penalty for fulfilment lapses, effective August 23, 2026. A shipment not ready for pickup by the committed Dispatch By Date draws a fine of Rs 30 per shipment; a seller-initiated or auto-cancelled order draws Rs 60; and an order that is both delayed and then cancelled draws Rs 90. Under the prior regime, a dispatch deadline breach could trigger an account lock, which YourStory notes had a heavier overall impact on sellers' businesses. New Flipkart sellers within their first three months are exempt from the new policy. Sources familiar with the matter told PTI, as cited by YourStory, that sellers maintaining good dispatch compliance would receive benefits including faster payment settlement and complimentary advertising credits.

Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), acknowledged the importance of timely fulfilment but said the timing and scope of the changes were a concern for micro, small, and medium enterprises already operating on thin margins. "Sellers should not become the default financial shock absorbers of the e-commerce ecosystem," Kumar said, calling on marketplaces to ensure transparent attribution of responsibility, proportionate penalties, adequate advance notice of fee changes, and a mechanism to contest wrongful charges. Kumar also noted that not all cancellations or delays are seller-driven, pointing to logistics failures, platform issues, demand spikes, and customer-related factors as contributing causes.