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

Ecommerce giants Amazon and Flipkart have recently updated the fee and penalty structures for sellers on their platforms ahead of the festival shopping period. Amazon India announced on its seller forum that, starting August 17, 2026, the company will calculate order cancellation fees differently for sellers using Easy Ship and Self Ship services. Under Easy Ship, sellers store and ship their products themselves, while Self Ship involves sellers packing and delivering the products using their own courier service.

The revised fee structure now charges sellers a percentage of the order value. For orders below Rs 10,000, the fee is 10%, between Rs 10,001 and Rs 50,000 it's 8%, between Rs 50,001 and Rs 1,00,000 it's 5%, and above Rs 1,00,000 it's 2%. Additionally, an 18% goods and services tax is applied. This fee applies for cancellations by the seller or when an order is automatically cancelled due to late shipping.

Amazon also plans to increase closing fees on September 7, 2026, based on product price range and fulfilment channel, with higher fuel and logistics costs being a contributing factor. Some sellers argue that cancellations are sometimes beyond their control, such as when delivery personnel fail to arrive for scheduled pickups, questioning the applicability of cancellation fees in such cases.

They also point out the unfair competitive disadvantage when the total fees differ significantly between sellers using Amazon's fulfilment network and those using Easy Ship.

Flipkart, on the other hand, implemented a three-tier penalty structure for order fulfilment lapses, effective August 23, 2026. The penalty for not making a shipment ready for pickup by the committed Dispatch By Date (DBD) is Rs 30 per shipment, Rs 60 per shipment for cancelled orders due to missed DBD deadlines, and Rs 90 per shipment for orders that are both delayed and cancelled.

Under the previous system, account lockouts were a more severe consequence. Flipkart's new policy aims to encourage better seller behavior and improve customer experience, while also rewarding sellers for maintaining good DBD compliance with benefits like faster payment settlements and complimentary advertising credits. However, Vinod Kumar, Trustee of FIRST INDIA, expressed concern over the recent rise in cancellation, dispatch, and other seller penalties, especially as the festive season approaches, and urged marketplaces to attribute responsibility, adjust penalties, provide advance notice of fee changes, and offer a simple challenge mechanism for wrongful charges to ensure digital commerce remains viable for small businesses.