Ahead of the festive shopping season, Amazon and Flipkart have changed their seller fee and penalty structures. However, sellers believe these changes may increase pressure on small and medium businesses. Many sellers already operate with limited profit margins and rising costs.
Amazon India shared a notice on its seller forum about changes for sellers using ‘Easy Ship’ and ‘Self Ship’ services. From August 17, 2026, Amazon changed the calculation method for order cancellation fees under these services.
Under Easy Ship, sellers store products, pack orders after receiving requests, and hand packages to Amazon pickup executives. The executives then manage shipping and timely delivery. Meanwhile, Self Ship allows sellers to pack and deliver products using their own courier services without Amazon logistics support.
Earlier, Amazon calculated cancellation charges through category-based referral fees. Now, the company will calculate charges according to the order value percentage.
Amazon increases cancellation and closing fees
According to the revised structure, Amazon will charge 10% for orders below ₹10,000. Orders between ₹10,001 and ₹50,000 will attract an 8% fee. Furthermore, orders between ₹50,001 and ₹1 lakh will carry a 5% charge. Orders above ₹1 lakh will face a 2% fee. Amazon will also apply an additional 18% GST on these charges. The fee applies when sellers cancel orders without buyer requests. It also applies when sellers fail to ship and confirm orders within 24 hours after the estimated shipping date.
Additionally, Amazon will increase closing fees from September 7, 2026. The revision will apply across Fulfillment Centre, Easy Ship, and Seller Flex channels.
For products priced up to ₹500, the closing fee will rise by ₹1. Products above ₹500 will see a ₹3 increase. Amazon attributed this change to higher fuel and logistics costs.
Amazon explains reason behind rule changes
An Amazon spokesperson said the company expects sellers to complete customer orders reliably. The spokesperson added that revised cancellation fees aim to encourage timely order fulfilment. Amazon stated that these charges apply only under specific conditions. The company said they apply when sellers cancel orders themselves. Amazon also said such orders account for less than 1% on Amazon.in.
The company added that it has measures to protect sellers when cancellations happen due to reasons beyond their control.
Flipkart introduces new penalty system for sellers
Meanwhile, Flipkart implemented a three-level penalty structure from August 23, 2026. The system targets mistakes related to order completion.
If sellers fail to prepare shipments by the Dispatch By Date (DBD), Flipkart will charge ₹30 per shipment. Seller-cancelled orders or orders cancelled after missing three dispatch deadlines will attract a ₹60 penalty.
Moreover, delayed shipments that later get cancelled will carry a ₹90 penalty per shipment.
Earlier, Flipkart could temporarily lock seller accounts for DBD violations. However, new sellers will remain outside this policy for their first three months.
The company aims to improve seller planning and customer experience through this system. Sellers with strong DBD compliance can receive benefits like faster payment settlements and free advertising credits.
MSMEs raise concerns over higher business costs
Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), said online sellers understand the need for timely deliveries and better customer service.
However, he highlighted concerns over increased cancellation, dispatch, and penalty charges before the festive season. He said MSMEs already face low margins and rising costs.
Kumar explained that every cancellation or delay does not happen because of sellers. Logistics challenges, platform issues, sudden demand increases, and customer-related reasons can also affect orders.
He suggested marketplaces should maintain transparent responsibility checks, fair penalties, advance communication about fee changes, and easy methods to challenge incorrect charges.
As festive demand increases, sellers will closely track how these revised rules impact their operations and costs.
