After Flipkart, Amazon India expands zero referral fees as market leans toward zero-commission models

Amazon India unveiled a series of fee reductions for merchants on its platform, expanding a programme that eliminates referral fees to cover more than 12.5 crore products. The move follows a similar initiative by rival Flipkart, which waived seller commissions on goods under Rs 1,000 late last year. This follows a year of significant financial improvement for the company's marketplace operator and ongoing investments in AI to compete with emerging rivals.

The revised fee structure, which takes effect on March 16, 2026, applies to products priced under Rs 1,000 across more than 1,800 categories. Eligible merchandise includes apparel, electronics, homeware, pet accessories, and toys. This marks a more than tenfold expansion from the 1.2 crore products eligible for zero referral fees in 2025. According to the company, sellers could reduce their fee expenses by up to 70% under the new terms.

The initial fee elimination in 2025 targeted items priced under Rs 300 across 135 categories. That prior reduction, which took effect in April 2025, came at a time when incumbent ecommerce platforms were focusing on counter competition from zero-commission platforms like Meesho and the growing market share of quick commerce channels.

"Post the sub-300 change, we have seen close to a 50% growth in the monthly run rate of new sellers coming on board to Amazon," Amit Nanda, Director, Selling Partner Services, Amazon India shared with YourStory.

In November 2025, Flipkart extended its own zero-commission offering to products priced below Rs 1,000, which it stated would decrease the cost of doing business by about 30% for sellers in that bracket. Additionally, Flipkart transitioned its hyper-value platform, Shopsy, to a completely zero-commission model to target consumers in smaller towns.

In addition to cutting referral fees, Amazon is also adjusting its logistics costs by reducing Easy Ship fees by over 20% for items priced below Rs 300. The Easy Ship service allows merchants to maintain inventory at their own facilities while Amazon manages order pickup and delivery. Further, sellers dispatching multiple items in a single package will receive a discount exceeding 90% on selling fees for the second unit.

The company indicated that the fee revisions are intended to improve operational efficiency and profitability for small businesses and entrepreneurs, particularly those located in Tier II and III cities.

The latest fee restructuring comes after Amazon reported an 89% narrowing of its net loss to Rs 374.3 crore for the fiscal year ended March 31, 2025. During that same period, the marketplace operator's revenue climbed 19% year-on-year to Rs 30,139 crore.

"If a seller saves 70% and is now paying 30 rupees instead of 100, they choose where to invest that 70 rupees. They might invest in better product quality, packaging, advertising, or promotions. This leads to further scale advantages, making the Amazon flywheel work better," added Nanda.

As major ecommerce platforms recalibrate policies to lower basic selling costs, they are increasingly offering advanced technological and financial services to support sellers and generate alternative revenue.

To further attract small businesses, Amazon is expanding its technological offerings alongside its fee cuts. In December 2025, the company stated it will equip 15 million enterprises with artificial intelligence tools by 2030, rolling out capabilities such as automated listing creation, ad generation, and advanced seller analytics within its Seller Central platform.

Similarly, Flipkart has integrated an AI-led logistics network featuring automated sorting and machine-learning-based demand forecasting to improve delivery reliability, and recently launched an "Advertise Now, Pay Later" program to allow sellers to run campaigns without upfront payments.