NEW DELHI: Amazon and Flipkart have revised fee and penalty structures for sellers ahead of the festive shopping season, prompting concerns among small and medium businesses that higher cancellation, dispatch and other charges could add to the pressure on already-thin margins.Amazon India has changed the way it calculates order cancellation fees for sellers using its Easy Ship and Self Ship services from August 17, 2026, according to a notice on its seller forum.Under Easy Ship, sellers store and pack their products before handing them over to an Amazon pickup executive for delivery.Under Self Ship, sellers handle packing and delivery themselves using their own courier or delivery service.The cancellation fee, which was earlier linked to category-specific referral charges, is now calculated as a percentage of the order value.Sellers are charged 10% of the order value for orders below Rs 10,000, 8% for orders between Rs 10,001 and Rs 50,000, 5% for orders between Rs 50,001 and Rs 1 lakh, and 2% for orders above Rs 1 lakh.An 18% goods and services tax is levied in addition, PTI reported.The fee applies when a seller cancels an order for reasons other than a buyer’s request and when an order is automatically cancelled because the seller fails to ship and confirm the shipment within 24 hours of the estimated ship date.Amazon has also announced an increase in closing fees across its Fulfilment Center, Easy Ship and Seller Flex channels from September 7, 2026.A closing fee is charged each time a product is sold on Amazon and varies according to the product price and fulfilment channel.The fee will rise by Rs 1 for products priced up to Rs 500 and by Rs 3 for products priced above Rs 500. Amazon attributed the increase to higher fuel and logistics costs.“We expect orders placed by customers to be fulfilled reliably by sellers on our marketplace. To encourage timely and dependable fulfilment, we have revised cancellation fees for Easy Ship and Self-Ship sellers. This fee is conditional and only applies in the rare event of a seller-initiated cancellation, which accounts for less than 1 per cent of orders on Amazon.in. We have appropriate measures in place to ensure sellers are protected when cancellations are due to circumstances beyond their control,” an Amazon spokesperson said.Some sellers responding on Amazon’s seller forum said cancellations could also result from factors beyond their control, including delivery personnel failing to arrive for scheduled pickups. They questioned why such cases should attract cancellation fees for sellers.Another seller said the difference in total fees between sellers using Amazon’s fulfilment network and those using Easy Ship could be as high as Rs 45 per unit on comparable orders, which the seller said created an unfair competitive situation.Flipkart has introduced a three-tier penalty structure for order-fulfilment lapses from August 23, 2026.A shipment not made ready for pickup by the committed Dispatch By Date (DBD) will attract a fine of Rs 30 per shipment.An order cancelled by the seller, or automatically cancelled after three missed dispatch deadlines, will attract a fine of Rs 60 per shipment.If an order is both delayed and subsequently cancelled, the penalty will rise to Rs 90 per shipment.Under the earlier system, a DBD breach could result in the seller’s account being locked for a period, which had a comparatively greater impact on the seller’s business.New sellers on Flipkart will be exempt from the policy for their first three months of selling, according to people aware of the development.The new structure is aimed at improving seller behaviour and encouraging better planning to improve customer experience, they said.Sellers maintaining good DBD compliance would also receive benefits such as faster settlement of payments and complimentary advertising credits, they added.Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), said online sellers understood the need for timely fulfilment and strong customer service but were concerned about the recent increase in cancellation, dispatch and other penalties by major e-commerce marketplaces, particularly ahead of the festive season.He said MSMEs were already operating on thin margins and facing rising costs.Kumar also said not every cancellation or delay was necessarily caused by sellers, citing logistics failures, platform-related issues, sudden demand spikes and customer-related factors as other possible reasons.“Sellers should not become the default financial shock absorbers of the e-commerce ecosystem.“Marketplaces must ensure transparent attribution of responsibility, reasonable and proportionate penalties, adequate advance notice of fee changes and a simple mechanism to challenge wrongful charges. The objective should be to improve fulfilment while making digital commerce more, not less, viable for small businesses,” Kumar added.(With agency inputs)
