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

Amazon and Flipkart have revised their seller fees and penalties ahead of the festive shopping season, with Amazon introducing graded charges for seller-initiated cancellations and Flipkart replacing account-level restrictions with order-specific penalties. 

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.

Flipkart Tweaks Seller Penalties

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. 

The policy excludes sellers during their first three months on the platform, giving them time to understand Flipkart’s fulfilment requirements, including packaging and manpower planning. 

The policy change comes alongside Flipkart’s efforts to lower costs for sellers. Earlier this year, the company expanded its zero-commission policy to all fashion products, irrespective of price. The move covered around 90,000 transacting sellers, including MSMEs, homegrown brands, and D2C labels.

Flipkart also extended its zero-commission model to all products listed on its value ecommerce platform Shopsy, irrespective of price.

Amazon, meanwhile, expanded its zero-referral-fee programme in March to products priced below ₹1,000 across more than 1,800 categories. It also reduced Easy Ship fees by more than 20% for products priced below ₹300, saying the changes could help sellers save up to 70% on overall selling costs.

The changes come as ecommerce marketplaces face growing competition from quick commerce platforms, which are expanding beyond groceries into categories such as fashion, electronics, beauty, and general merchandise. 

The post Amazon, Flipkart Revise Seller Fees, Penalties Ahead Of Festive Season appeared first on Inc42 Media.