Amazon cuts seller fees, again; escalates fee war with Meesho, Flipkart

Mumbai: Amazon India waives seller commissions on all goods priced below ₹1,000 is being extended to products priced below the policy, which was first introduced in April ₹300. The e-commerce firm said the policy will increase its zero commission policy by 10 times to 12.5 crore products in categories such as home textiles, casual wear, small electronics, toys and fashion accessories.

“Daily consumption [on e-commerce] mostly comes from sub-products ₹1,000,” said Amit Nanda, director, selling partner services for Amazon India. Mint in an interview. “This is the segment where most of our sellers are keen to grow,” he said, adding that seller response to the previous zero commission policy in April was ‘extremely positive’. Nanda said Amazon has seen a 50% increase in the number of new sellers joining the platform since it first offered zero commissions in April.

This is the second time this financial year that Amazon has cut seller fees, including commissions and shipping costs, for ‘small sellers’. Nanda said Amazon India has no official definition of a ‘small’ seller in India, but such sellers tend to operate from home or a small unit in a single city or region and store their goods on their own premises rather than at an Amazon fulfillment centre. Nanda added that these sellers make up 70-80% of Amazon’s 1.7 million seller base in India.

“Everyday consumables are gaining a lot more traction online, and this change will expand that category for us,” Nanda added. “Business will now become more viable for relatively low-margin sellers who only list 1-2 products or who have yet to list a highly niche product.” Nanda gave examples of products such as: attack additives, cheap casual t-shirts, and seasonal items that cash in on a fad or trend, especially toys and new items.

“Over time, we have also seen around the world that these are actually flywheel effects,” Nanda added. “Sellers are adding new products, the market is buying new products that were not previously available, which are more attractive to buy in the market. Some sellers may also lower their prices, making the product more attractive to buy. As a result of both of these, in the medium and long term you only compensate for this with volume leverage.”

But he declined to say how much revenue Amazon would lose because of these cuts to seller fees. On Amazon in June introduced ‘marketplace fee’ ₹5 per transaction.

Amazon’s ₹A marketplace fee of 5 applies to all orders on the platform and is paid by the customer at checkout. A flat fee applied to an order regardless of its value, number of units, or type of units. However, this does not apply to orders placed through Amazon Bazaar, the company’s zero-commission niche, or to some products, such as gift cards and digital services.

Chasing Meesho

Competition between private e-commerce models is increasing. Platforms like Meesho have found success by focusing on value retailers and value-conscious shoppers in small-town India and making zero-commission models successful in these high-volume markets. Analysts who follow Meesho, which broke box office records on Indian stock exchanges in December, say its business model still faces little competition.

“The largest group of vendors selling Analysts from Bank of America’s brokerage arm wrote in a report last month that Meesho also sold on other horizontal e-commerce platforms but eventually focused on selling different products. “Better price point and quality products are mostly sold on Amazon and Flipkart. Horizontal e-commerce platforms charge largely similar commission rates, ranging from 10-15% to 20-25% depending on categories.”

However, in November, Amazon’s rival Flipkart also announced zero commission on all products priced below. ₹1000. Additionally, both platforms operate separate zero-commission marketplaces for small sellers: Amazon Bazaar and Flipkart Shopsy. Amazon’s Nanda said Bazaar was ‘small but growing very fast’ but declined to share details.

“The scale of both platforms is less than 10% of Meesho, according to experts,” BoFA analysts said in a January note. In the December 2025 quarter, a year-on-year increase in revenues from operations of approximately 32% was reported. ₹3,518 crore even though losses increased more than 13 times ₹490 crore. Amazon Seller Services Pvt Ltd, Amazon India’s marketplace business, reported a 19% increase in revenues in FY25. ₹30,491 crore, while losses have reduced significantly ₹374 crore, according to data from research firm Tracxn.