Amazon India Waives Referral Fees on 12 Million Products

• Amazon India announced a referral fee waiver on over 12 million products priced below ₹300, effective April 7, 2025.
• The waiver applies to more than 135 product categories, including apparel, shoes, jewellery, grocery, home décor, beauty, toys, and kitchen products.
• Referral fee is a commission sellers pay Amazon for each product sold. This move aims to support small businesses on the platform.

Fee Reductions and Shipping Changes

• Simplified flat shipping rates introduced for sellers using external fulfilment channels like Easy Ship and Seller Flex.
  • National shipping rates now start at ₹65 (down from ₹77).
• Weight handling fees reduced by up to ₹17 for lightweight items under 1 kg.
• Sellers shipping multiple units can save up to 90% on selling fees for the second unit.

Market and Business Impact

• Amazon India currently hosts over 1.6 million sellers, offering products across all serviceable pin codes in India.
• The fee reduction is the largest seller fee cut to date, reflecting Amazon's strategic focus on seller retention and market share expansion.
• This move may intensify competition with other e-commerce players like Flipkart, as lower fees could attract more small businesses to the platform.

Competitive Dynamics

• The waiver highlights Amazon's commitment to small business support, potentially differentiating it from competitors.
• Simplified logistics solutions (Easy Ship and Seller Flex) aim to streamline seller operations, further enhancing their appeal.

Long-Term Effects and Strategic Considerations

• Lower fees may lead to price reductions for consumers and increased product availability on the platform.
• The initiative could drive seller growth and category expansion, strengthening Amazon's position in India's e-commerce market.
• Regulatory impacts remain a consideration, as government policies on e-commerce practices could influence future business strategies.