Amazon and Flipkart have revised their seller fee structures ahead of India’s upcoming festive shopping season, introducing higher cancellation-related charges and new penalties as e-commerce platforms prepare for a surge in orders. Amazon has moved to a graded cancellation-fee system linked to order value, while Flipkart has introduced fixed penalties tied to dispatch delays and seller cancellations. The changes are aimed at improving fulfillment discipline as the two marketplaces compete for a larger share of festive-season spending.
Amazon’s revised cancellation-fee structure took effect on August 17 for sellers using its Easy Ship and Self Ship services. The company is also set to raise closing fees from September 7. Flipkart’s new cancellation policy became effective August 23, with penalties ranging from ₹30 to ₹90 depending on whether a seller misses the dispatch deadline, cancels an order, or does both. The changes come as sellers prepare for one of the most important sales periods of the year.
Amazon Introduces Graded Cancellation Fees
Amazon has replaced its earlier cancellation-fee approach with a graded structure based on the value of the order. Under the new system, sellers can face charges ranging from 2% to 10% when they cancel orders for reasons other than a buyer request.
The revised system applies to sellers using Amazon’s Easy Ship and Self Ship delivery models. It also applies when an order is automatically cancelled because the seller fails to ship and confirm it within 24 hours of the estimated ship date. Buyer-initiated cancellations are excluded from the fee.
Amazon Cancellation Fee Structure
| Order Value | Cancellation Fee |
|---|---|
| Below ₹10,000 | 10% |
| ₹10,001–₹50,000 | 8% |
| ₹50,001–₹1 lakh | 5% |
| Above ₹1 lakh | 2% |
| GST on cancellation fee | 18% |
The structure means lower-value orders face the highest percentage charge. For example, a seller cancelling a ₹5,000 order could face a ₹500 cancellation fee before the applicable 18% GST, while a ₹2 lakh order would attract a 2% fee, or ₹4,000, before GST.
The differentiated approach appears designed to make sellers more accountable for smaller-value orders while still imposing meaningful financial consequences on higher-value cancellations.
Amazon to Raise Closing Fees From September 7
Cancellation charges are not the only Amazon seller-cost change. The company will also increase its closing fees from September 7, 2026.
The increase is relatively small on a per-item basis but applies across sellers using Amazon Fulfilment Center, Easy Ship and Seller Flex models. A closing fee is a fixed charge levied on a seller for each item sold and is separate from referral and fulfilment fees.
| Product Price | Closing Fee Increase |
|---|---|
| Up to ₹500 | ₹1 |
| Above ₹500 | ₹3 |
| Effective date | September 7, 2026 |
| Applicable models | Fulfilment Center, Easy Ship, Seller Flex |
For high-volume sellers, even a small increase in per-order charges can affect overall margins during the festive season, when order volumes can rise sharply.
Flipkart Introduces Penalties Up to ₹90
Walmart-owned Flipkart has also changed its seller-cancellation policy. The revised structure became effective on August 23, according to people familiar with the development.
Unlike Amazon’s percentage-based cancellation model, Flipkart is using fixed penalties based on the seller’s action and whether the agreed dispatch deadline is missed.
Flipkart Penalty Structure
| Seller Action | Penalty |
|---|---|
| Fails to hand over order by dispatch-by date | ₹30 |
| Cancels an order after receiving it | ₹60 |
| Misses dispatch deadline and subsequently cancels | ₹90 |
The highest penalty applies when a seller both misses the agreed dispatch deadline and subsequently cancels the order.
The structure places particular emphasis on timely handover to Flipkart’s logistics network, which becomes especially important during high-volume shopping periods.
Amazon and Flipkart Take Different Approaches
Although both platforms have revised seller economics, their approaches are different.
Amazon has linked cancellation costs directly to order value, meaning the financial impact increases or decreases with the size of the transaction. Flipkart, by contrast, has introduced fixed penalties tied to specific seller behaviors.
AMAZON
Order Value
↓
Cancellation
↓
Percentage-Based Fee
2% ─────────────── 10%
FLIPKART
Seller Action
↓
Dispatch / Cancellation
↓
Fixed Penalty
₹30 → ₹60 → ₹90
The common objective is greater seller discipline. Both platforms are seeking to reduce cancellations and delays that can undermine customer experience during periods when order volumes are particularly high.
Seller Costs Come Under Greater Focus
The latest changes need to be viewed against a broader evolution in marketplace fee structures.
Amazon reduced several seller costs earlier in 2026. From March 16, the company expanded zero referral fees to products priced up to ₹1,000 across more than 1,800 categories, covering over 12.5 crore products. It also reduced Easy Ship fees for products priced below ₹300 and lowered referral fees in selected higher-value categories.
This means the latest increases should not be interpreted as a blanket increase across every Amazon seller fee. Instead, the company is changing specific components of its fee structure while maintaining or expanding reductions in other areas.
Amazon’s 2026 Seller-Fee Changes
| Fee Area | 2026 Change |
|---|---|
| Zero referral fee | Expanded to products up to ₹1,000 |
| Products covered | More than 12.5 crore |
| Categories covered | 1,800+ |
| Easy Ship products below ₹300 | Fee reduction |
| High-demand categories above ₹1,000 | Referral fees reduced by 4%–9.5% |
| Cancellation fees | New graded structure |
| Closing fees | Increase from September 7 |
Amazon said its March changes were intended to help sellers price more competitively and save on fulfilment costs. The company also reported 50% year-on-year growth in new sellers joining Amazon India.
Festive Season Makes Seller Discipline More Important
India’s festive season is one of the most important periods for online retailers and marketplace sellers. Demand typically increases across electronics, fashion, home products, beauty, appliances, gifts and other consumer categories.
During these periods, the cost of a seller cancellation or dispatch failure can extend beyond the individual transaction. A cancelled order can affect customer satisfaction, delivery commitments and the platform’s overall service metrics.
That makes fulfilment reliability particularly important for Amazon and Flipkart as they compete for shoppers.
FESTIVE-SEASON ORDER CYCLE
Higher Customer Demand
↓
More Orders
↓
Greater Seller Fulfilment Pressure
↓
Higher Risk of Delays / Cancellations
↓
Platform Penalties
↓
Stronger Seller Discipline
↓
More Reliable Customer Experience
The new penalties are therefore partly an operational measure. Platforms have an incentive to ensure that the large number of orders generated during promotional events can move through their logistics networks without excessive cancellations or delays.
Small Sellers Could Feel the Impact More
The impact of the revised structures will vary by seller.
For large merchants operating at significant volumes, fixed charges such as ₹30 or ₹60 may be manageable on individual orders but could become substantial when multiplied across thousands of transactions. For smaller sellers with thinner margins, percentage-based cancellation fees could have a larger effect on profitability.
Amazon’s structure also creates different incentives depending on product price. A seller of lower-value products faces a higher percentage penalty for cancellation, while sellers of expensive products face a lower percentage rate.
This could encourage sellers to improve inventory accuracy, order processing and dispatch management before the festive rush begins.
Inventory Management Becomes More Important
One of the biggest practical implications is the need for sellers to maintain accurate inventory.
A marketplace seller may cancel an order because a product is out of stock, incorrectly listed or unavailable at the expected fulfilment location. Under the revised structures, such operational failures can now translate more directly into financial penalties.
Sellers therefore have an incentive to:
- Maintain accurate inventory records
- Update product availability quickly
- Confirm orders promptly
- Meet dispatch-by dates
- Improve warehouse coordination
- Monitor marketplace notifications
- Reduce avoidable cancellations
For sellers using multiple marketplaces, synchronizing inventory across Amazon, Flipkart and other channels could become increasingly important.
Logistics Partners Are Also Part of the Equation
The revised rules are closely connected with marketplace logistics.
Amazon’s cancellation policy covers sellers using Easy Ship and Self Ship, while Flipkart’s penalty system specifically references handing over orders to its logistics partner by the agreed dispatch-by date.
This means seller performance is being measured not only by whether an order is accepted but also by how quickly it moves into the delivery network.
The approach can help marketplaces plan warehouse and delivery capacity more effectively during peak periods.
Potential Impact on Product Prices
Higher seller costs do not automatically mean higher consumer prices. Sellers have several options, including absorbing the additional cost, reducing promotional discounts, improving operational efficiency or passing some of the expense on to customers.
The impact will likely vary according to product category and competitive intensity.
For highly competitive products, sellers may have limited ability to increase prices because shoppers can easily compare offers across marketplaces. In less competitive categories, some additional costs could eventually be reflected in selling prices.
Amazon and Flipkart Are Competing Beyond Discounts
The fee changes also highlight how India’s e-commerce competition is becoming increasingly focused on marketplace economics and fulfilment quality.
Platforms compete not only through customer discounts but also through seller acquisition, logistics speed, inventory availability and reliability. A marketplace that can provide consistent delivery during peak demand can strengthen customer loyalty even when prices are similar.
At the same time, seller fees are an important part of the economics of marketplace operations. Platforms need to balance attractive seller terms with the cost of maintaining logistics infrastructure, technology and customer service.
The Bigger Picture
Amazon and Flipkart’s latest seller-fee revisions show how India’s e-commerce platforms are tightening operational standards ahead of the festive shopping season. Amazon’s percentage-based cancellation charges and upcoming closing-fee increase, together with Flipkart’s fixed penalties of up to ₹90, put greater financial emphasis on inventory accuracy, timely dispatch and order fulfillment.
The changes also illustrate that marketplace fee strategies are becoming more complex rather than simply moving in one direction. Amazon has simultaneously expanded zero referral fees and reduced several seller costs while increasing selected cancellation and closing charges. For sellers, the key issue will therefore be the total cost of selling across the platform rather than any single fee.
Looking Ahead
The immediate test for the revised structures will come during the festive shopping period, when order volumes rise and sellers face greater pressure to maintain inventory and delivery commitments. Sellers will need to account for cancellation penalties, closing fees and other marketplace charges when setting prices and planning inventory, particularly for products with low margins.
Over the longer term, Amazon and Flipkart’s approach could push sellers toward more disciplined fulfilment operations while also influencing how merchants allocate inventory between competing marketplaces. The balance between lower seller acquisition costs, higher operational penalties and strong festive-season demand will determine whether the new structures improve marketplace efficiency without placing excessive pressure on merchants.
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