Amazon, Flipkart Revise Seller Fees, Penalties Ahead Of Festive Season

Amazon has introduced graded fees for seller-initiated cancellations, while Flipkart has replaced account-level restrictions with penalties on individual orders

The changes show ecommerce marketplaces tightening fulfilment rules ahead of the festive season, even as they selectively reduce commissions and other costs to attract sellers

Amazon’s cancellation fee ranges from 2% to 10%, while Flipkart will impose penalties of ₹30 to ₹90 for missed dispatch deadlines and seller-initiated cancellations

The changes come as ecommerce marketplaces prepare for a surge in festive demand and face growing competition from quick commerce platforms.

Amazon introduced a graded cancellation fee for sellers using its Easy Ship and Self Ship services, effective August 17. The fee is linked to the value of a cancelled order and ranges from 2% to 10%.

Sellers will pay a 10% fee on orders priced below ₹10,000, 8% on those priced between ₹10,001 and ₹50,000, 5% on orders between ₹50,001 and ₹1 Lakh, and 2% on those priced above ₹1 Lakh. An 18% GST will also apply to the cancellation fee.

The fee applies to seller-initiated cancellations, except when an order is cancelled at the buyer’s request. It may also be imposed when an order is automatically cancelled because the seller fails to ship and confirm it within 24 hours of the estimated shipping date.

Amazon will also increase its closing fees from September 7. The fee will rise by ₹1 for products priced up to ₹500 and by ₹3 for products priced above ₹500. The revised charges will apply to sellers using Amazon Fulfilment Centre, Easy Ship, and Seller Flex.

Closing fees are fixed charges that Amazon levies on sellers for every product sold, based on the item’s price and fulfilment channel.

An Amazon spokesperson told Inc42 that seller-initiated cancellations account for less than 1% of orders on Amazon India and that safeguards are in place for cancellations caused by circumstances beyond a seller’s control.

“To encourage timely and dependable fulfilment, we have revised cancellation fees for Easy Ship and Self-Ship sellers. This fee is conditional and only applies in the rare event of a seller-initiated cancellation, which accounts for less than 1% of orders on Amazon.in. We have appropriate measures in place to ensure sellers are protected when cancellations are due to circumstances beyond their control,” the spokesperson said.

Meanwhile, Walmart-owned Flipkart introduced a new seller penalty structure on August 23, according to people familiar with the matter. The policy applies to sellers that have been on the platform for at least three months.

Under the new structure, sellers will incur a ₹30 penalty if they fail to hand over an order to Flipkart’s logistics partner by the agreed dispatch-by date (DBD). The penalty rises to ₹60 if a seller cancels an order after replacing it. If a seller misses the DBD and subsequently cancels the order, the penalty increases to ₹90.

The revised system replaces Flipkart’s earlier practice of imposing account-level restrictions for order cancellations. The new approach allows the ecommerce major to penalise individual orders while keeping seller accounts operational.

“The goal is not to penalise sellers but to help them improve their operations and fulfilment practices,” sources in the company said.