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

Ecommerce giants Amazon and Flipkart have adjusted fee and penalty structures for sellers ahead of the festive season, a change that could burden small and medium enterprises already operating on thin margins. On August 17, 2026, Amazon India announced it would recalculate order cancellation fees for sellers who use its Easy Ship and Self Ship services.

Now, sellers are charged a percentage of the order value instead of category-specific referral charges. The fee is 18% plus GST on orders cancelled by the seller for reasons other than a buyer's request, and when Amazon does not ship and confirm the shipment within 24 hours of the estimated ship date. Amazon also announced a rise in closing fees effective September 7, 2026, with additional charges for products priced above Rs 500.

Flipkart, on the other hand, introduced a penalty system for order-fulfilment lapses effective August 23, 2026. Sellers who fail to make products ready for pickup by the committed Dispatch By Date (DBD) face a fine of Rs 30 per shipment. If an order is cancelled by the seller or automatically cancelled after three missed DBDs, the penalty increases to Rs 60 per shipment.

For a delayed and subsequently cancelled order, the penalty rises to Rs 90 per shipment. These changes aim to encourage timely and dependable fulfilment, improve customer experience, and help sellers plan better. However, some sellers argue that these penalties disproportionately affect them, particularly when cancellations are beyond their control, such as when delivery personnel fail to arrive for a scheduled pickup.

They urge marketplaces to ensure transparent attribution of responsibility, reasonable penalties, and a simple mechanism to challenge wrongful charges, emphasizing the need to make digital commerce viable for small businesses.