Amazon and Flipkart are changing the economics of selling on their marketplaces just weeks before India’s festive shopping season, with both platforms introducing fresh charges linked to seller performance and fulfilment.
The changes, as per a PTI report, affect different parts of the seller journey. Amazon has revised cancellation charges and is also increasing certain closing fees, while Flipkart has introduced fixed monetary penalties linked to dispatch delays and order cancellations.
For smaller online merchants, the timing has become a point of concern as they prepare for a period when order volumes typically rise but operational costs can also increase.
Amazon India has introduced a new calculation method for cancellation charges applicable to sellers using its Easy Ship and Self Ship services.
Instead of relying on category-linked referral charges, the cancellation fee will now be determined by the value of the order.
- Orders below ₹10,000: 10% of the order value
- ₹10,001–₹50,000: 8%
- ₹50,001–₹1 lakh: 5%
- Above ₹1 lakh: 2%
An additional 18% GST applies to these charges.
The revised system covers seller-initiated cancellations, except where the cancellation is attributable to the buyer. It can also come into play when a seller fails to complete the required shipping confirmation within the prescribed period, resulting in an automatic cancellation.
Amazon has said such seller-driven cancellations represent less than 1% of orders on Amazon.in and that provisions exist for situations in which sellers are not responsible for the failure.
Another Amazon fee increase is coming
There is a separate change for sellers using Amazon’s Fulfilment Center, Easy Ship and Seller Flex models.
From September 7, closing fees will increase by ₹1 for products priced at ₹500 or less. For products above ₹500, the increase will be ₹3.
Amazon has linked the revision to higher expenses related to fuel and logistics.
The two changes mean sellers will need to account for both order-level cancellation exposure and higher per-unit marketplace costs while pricing products for the upcoming sales period.
Flipkart takes a different approach
Flipkart’s revised system is based on the nature of a fulfilment failure rather than the value of the order.
The platform’s new penalty structure, effective August 23, has three levels.
A seller who fails to have a shipment ready for collection by the agreed dispatch deadline will face a ₹30 penalty per shipment.
If the seller cancels the order, or the platform cancels it after three missed dispatch deadlines, the charge increases to ₹60.
The highest penalty of ₹90 applies when an order misses its dispatch deadline and is subsequently cancelled.
The policy does not apply to sellers during their first three months on the platform.
The move also changes the nature of the consequence for certain dispatch breaches. Previously, some violations could result in temporary restrictions on a seller’s account.
Why sellers are raising concerns
Seller representatives are not disputing the importance of reliable fulfilment, but they are questioning whether financial penalties should apply when the cause of a delay lies outside the merchant’s control.
Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), said sellers can face problems arising from logistics operations, marketplace technology, unexpected demand surges and other factors.
The concern is particularly relevant during large sale events, when sudden increases in orders can put additional pressure on inventory and delivery networks.
Kumar argued that marketplaces should establish clearer responsibility for fulfilment failures before imposing charges. He also called for reasonable penalties, advance communication about fee changes and a straightforward process for sellers to dispute charges.
Festive sales put the changes in focus
The revisions come as e-commerce platforms and merchants enter preparations for the year’s busiest shopping period.
For marketplaces, stricter fulfilment rules can help reduce cancellations and improve delivery reliability. For sellers, however, the changes introduce additional financial risks if orders are cancelled or dispatch commitments are missed.
The immediate impact will depend on how frequently merchants encounter chargeable cancellations or fulfilment breaches. But with Amazon and Flipkart both adjusting their seller policies ahead of the festive season, marketplace costs are emerging as another factor sellers will need to account for when planning inventory, pricing and operations.
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First Published onAugust 25, 2026, 09:20:58 IST
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