The referral fee is a commission Amazon charges its sellers for each item sold on the platform, ranging between 2% to 16.5% of the cost of the product.
In April 2025, Amazon India had waived the seller referral fee for items below Rs 300. Now the company has expanded its zero referral fees from 1.2 crore products in 2025 to over 12.5 crore products.
“This translates into up to 70% savings in the cost of selling on our marketplace,” said Amit Nanda, director, selling partner services, Amazon India. “This will make selling on Amazon more lucrative and simpler, particularly for small businesses and entrepreneurs in tier II and tier III cities.”
ET had reported in November 2025 that Amazon had removed the referral fee charged to its sellers for items priced below Rs 1,000 until December 31, and planned to extend it based on seller feedback.
“We test these decisions before going live at such a large scale. We do this in a few ways. For instance, running short-term fee promotions in periods like Diwali to see the (seller) response,” Nanda explained.
Further, the fee revision includes a 20% reduction in Easy Ship fees for products priced below Rs 300. Under Easy Ship, sellers store products at their own premises while Amazon handles pickup and delivery, making it a preferred choice for early-stage vendors due to low upfront costs.
Competition
Before Amazon, Walmart-backed Flipkart had also introduced a zero-commission model for products priced below Rs 1,000 last November. Flipkart expanded this to all products on its hyper-value platform Shopsy, irrespective of the price.
In fact, value commerce platform Meesho was the first to launch the zero-commission model in 2022, to attract micro, small, and medium enterprises. Meesho focusses on customers in tier II markets and beyond.
On the competition also dropping the commission, Nanda said, “Our focus is on providing long-term visibility to our sellers. This change is not a short-term promotion; it’s a structural fee change.”
According to industry analysts, these efforts will help onboard more small sellers to these platforms as they try to focus on fast-growing tier II markets and beyond.
