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

Amazon India and Flipkart have each updated their seller fee and penalty frameworks in August 2026, with the changes taking effect in the weeks before India's peak festive shopping season, per YourStory.

Amazon's changes come in two parts. Effective August 17, 2026, the company overhauled how it calculates order cancellation fees for sellers on its Easy Ship and Self Ship services, shifting from category-specific referral charges to a percentage of order value. Under the new structure, the cancellation fee is 10% of order value for orders below Rs 10,000, dropping to 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 for reasons other than a buyer's request, or when an order is automatically cancelled because the seller failed to ship and confirm within 24 hours of the estimated ship date. Separately, Amazon announced that closing fees across its Fulfilment Center, Easy Ship, and Seller Flex channels will rise from September 7, 2026 — by Rs 1 for products priced up to Rs 500 and by Rs 3 for products priced above Rs 500 — citing higher fuel and logistics costs, YourStory reports.

An Amazon spokesperson, quoted by YourStory, said the cancellation fee revision is designed to encourage "timely and dependable fulfilment" and noted that seller-initiated cancellations account for less than 1% of orders on Amazon.in. The company added that sellers are protected when cancellations stem from circumstances beyond their control. However, sellers responding on Amazon's forum pushed back, saying cancellations are sometimes caused by delivery personnel failing to show up for scheduled pickups. One seller noted that the total fee gap between Amazon's own fulfilment network and Easy Ship could reach as much as Rs 45 per unit on comparable orders, which they described as creating an uneven competitive situation.

Flipkart, meanwhile, introduced a three-tier flat-fee penalty structure for fulfilment lapses, effective August 23, 2026. A shipment not ready for pickup by the committed Dispatch By Date attracts a fine of Rs 30 per shipment; a seller-cancelled or auto-cancelled order (after three missed dispatch deadlines) draws Rs 60; and an order that is both delayed and then cancelled carries a Rs 90 penalty. YourStory notes this replaces a system under which a DBD breach could result in temporary account suspension — a more severe consequence for sellers. New sellers within their first three months on the platform are exempt from the new penalties. People aware of the development told PTI, as cited by YourStory, that the structure is meant to encourage better seller planning and improve customer experience, and that sellers maintaining strong DBD compliance can earn benefits including faster payment settlement and complimentary advertising credits.

The changes have drawn criticism from seller advocacy groups. Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), acknowledged the importance of fulfilment standards but said the timing and scale of fee increases — particularly ahead of the festive season — were a concern for MSMEs already working on thin margins. Kumar argued that not every cancellation or delay is the seller's fault, pointing to logistics failures, platform issues, demand spikes, and customer-related factors. "Sellers should not become the default financial shock absorbers of the e-commerce ecosystem," he said, per YourStory, calling on marketplaces to ensure transparent attribution of responsibility, proportionate penalties, adequate notice of fee changes, and a simple dispute mechanism.