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On a groundbreaking move for e-commerce sellers in India, Amazon has announced its largest-ever reduction in selling fees, effective April 7, 2025. The company is eliminating referral fees on over 1.2 crore (12 million) products priced under ₹300, spanning more than 135 product categories. This initiative, paired with reduced shipping and weight handling costs, aims to empower small businesses and boost seller growth on Amazon.in. Here’s everything you need to know about this game-changing update and how it impacts sellers and consumers alike.
What Are Amazon Referral Fees?
Referral fees are commissions that sellers pay Amazon for each product sold on its platform. These fees typically range from 2% to 16% (or higher in some cases), depending on the product category and price. For sellers dealing in low-cost items, these fees can significantly eat into profit margins, making it challenging to compete in the marketplace. By scrapping referral fees on products under ₹300, Amazon is addressing this pain point head-on, offering unprecedented savings to its 1.6 million sellers across India.
Key Highlights of Amazon’s Fee Reduction Announcement
On March 23, 2025, Amazon India unveiled this historic policy shift, positioning itself as a seller-friendly platform. Here are the key details:
- Zero Referral Fees on 1.2 Crore Products
- Applies to items priced below ₹300 across 135+ categories, including apparel, shoes, fashion jewelry, grocery, home décor, beauty, toys, kitchen products, automotive, and pet supplies.
- Previously, referral fees on these items ranged from 2% to 16%, making this a massive cost-saving opportunity for sellers.
- Reduced Shipping Costs
- National shipping rates for external fulfillment channels like Easy Ship and Seller Flex are dropping from ₹77 to ₹65—a 16% reduction.
- Sellers shipping multiple units at once can save up to 90% on selling fees for the second unit.
- Lower Weight Handling Fees
- Lightweight items under 1 kg will see weight handling fees reduced by up to ₹17, further lowering the total cost of selling.
- Effective Date
- These changes will take effect on April 7, 2025, giving sellers time to adjust their strategies and capitalize on the savings.
This announcement follows Amazon India’s earlier fee cuts in August 2024, where selling fees were reduced by 3% to 12% across 59 sub-categories ahead of the festive season. The latest move doubles down on Amazon’s commitment to supporting small and medium businesses (SMBs), which make up over 90% of its seller base.
Why This Matters for Sellers
For sellers, especially those dealing in low-value, high-volume products, this fee reduction is a game-changer. Here’s how:
- Increased Profit Margins: Eliminating referral fees on items under ₹300 means sellers keep more of their revenue. For example, a ₹299 pair of shorts that previously incurred ₹130 in fees will now cost just ₹70 to sell, as highlighted by Amit Nanda, Director of Selling Partner Services at Amazon India.
- Competitive Pricing: With lower costs, sellers can offer more attractive prices, appealing to price-sensitive customers.
- Wider Product Selection: Reduced fees make it viable to list more affordable products, expanding the variety available on Amazon.in.
- Support for SMBs: Over 50% of Amazon India’s sellers hail from Tier II, III, and IV cities. This initiative levels the playing field, enabling small businesses to scale effectively.
Amit Nanda emphasized, “At Amazon India, we are committed to enabling the growth of all sellers because we strongly believe that our success lies in their success. By eliminating referral fees on crores of products and reducing shipping costs, we’re making it more lucrative for sellers to sell on Amazon.in.”
How Consumers Benefit
While this announcement directly targets sellers, the ripple effects will benefit customers too:
- Lower Prices: Sellers can pass on their savings, making everyday essentials more affordable.
- Greater Variety: With reduced costs, sellers are incentivized to list more products, giving shoppers a broader selection.
- Boost to Local Economies: Supporting SMBs in smaller cities strengthens local businesses, indirectly benefiting communities across India.
Amazon’s Strategic Vision
This fee reduction aligns with Amazon India’s long-term strategy to digitize 10 million small businesses by 2025. Since starting with just 100 sellers in 2013, Amazon.in has grown to host over 1.6 million sellers, offering products across all serviceable pin codes in India. The company’s marketplace arm, Amazon Seller Services, reported a 14.4% revenue increase to ₹25,406 crore in FY24, with losses narrowing by 28.5% to ₹3,469.50 crore, reflecting operational efficiencies that are now being shared with sellers.
This move also comes amid rising competition in India’s e-commerce landscape, with players like Flipkart and quick-commerce platforms vying for market share. Additionally, Amazon faces regulatory scrutiny from the Competition Commission of India (CCI) over alleged antitrust practices, making seller-friendly policies a smart way to strengthen its ecosystem.
How Sellers Can Prepare for April 7, 2025
To maximize this opportunity, sellers should:
- Review Product Listings: Identify items under ₹300 and optimize pricing and inventory.
- Leverage Fulfillment Channels: Use Easy Ship or Seller Flex to take advantage of reduced shipping rates.
- Expand Low-Cost Offerings: Introduce new products in the 135+ eligible categories to diversify their catalog.
- Monitor Profit Margins: Recalculate costs with the new fee structure to ensure profitability.