Amazon India has just made a huge announcement that’s set to shake up the e-commerce game for small and medium-sized businesses across the country. In a bold move
Amazon India has just made a huge announcement that’s set to shake up the e-commerce game for small and medium-sized businesses across the country. In a bold move to support local sellers, the giant retailer has decided to eliminate its referral fee on products priced below Rs 300. This means that millions of sellers will no longer have to pay a commission to Amazon when selling low-priced items. But what does this really mean for sellers, buyers, and the broader Indian e-commerce landscape? Let’s break it down.
The Big News: Starting April 7, 2025, Amazon India will waive its referral fees on products priced under Rs 300. This applies to over 1.2 crore items spread across 135+ categories. The move is expected to benefit countless sellers who have been struggling with the extra costs associated with listing affordable products on the platform. Let’s dive into why Amazon made this decision and what it could mean for the future of e-commerce in India.
Before we dig into the details of Amazon’s new policy, let’s quickly understand what referral fees are and why they matter to sellers.
Amazon charges referral fees to sellers as a commission for every sale they make through the platform. This fee ranges between 2% and 4% depending on the category of the product. While this commission can be manageable for higher-priced items, it can eat into the profit margins of sellers who list lower-priced goods, especially items priced under Rs 300.
This fee was always part of Amazon’s business model, helping the company maintain its platform and deliver services like customer support, logistics, and marketing. However, for smaller businesses selling low-cost products, these fees could sometimes discourage them from listing their items on Amazon.
Amazon’s decision to waive the referral fees for products priced below Rs 300 comes at a critical time when small and medium-sized businesses (SMBs) are under increasing pressure. Here’s why this move is so important:
Amazon has long touted its commitment to supporting small and medium-sized businesses in India. By eliminating the referral fee for lower-priced items, Amazon is making it easier for these sellers to compete without being burdened by extra costs. This decision is expected to give them more flexibility to lower prices, offer discounts, or simply make a better profit on their products.
In India, many local businesses rely on e-commerce platforms to reach a wider audience. By removing the referral fee, Amazon is making it more affordable for sellers to offer their products online, especially those operating in niche markets or selling low-cost consumer goods. This move can open the door for even more sellers to list their items on Amazon, making e-commerce accessible to businesses of all sizes.
For many small businesses, the referral fee on low-cost items could represent a significant chunk of their earnings. By eliminating these fees, Amazon is boosting profitability for sellers, enabling them to reinvest in their businesses, improve their offerings, and, ultimately, grow their operations. This could lead to an uptick in the number of small sellers choosing Amazon as their primary sales channel.
The zero-referral-fee policy will apply to products priced below Rs 300 across a staggering 135+ categories. In fact, over 1.2 crore products will fall under this new rule. Some of the categories likely to benefit the most include:
If your business falls under any of these categories, this change could mean a significant boost in profits without the overhead costs of paying Amazon’s referral fee.
This isn’t the first time Amazon has reduced fees for sellers. In September 2024, the company reduced seller fees for several categories by as much as 12%, in a bid to attract and retain more sellers on its platform. These reductions were part of Amazon’s broader strategy to make e-commerce more appealing to small businesses, especially in a market like India, where competition is fierce.
Now, with the elimination of referral fees for low-cost products, Amazon is doubling down on its efforts to support small businesses. This move signals that Amazon is committed to helping local entrepreneurs thrive, even in the face of rising competition from other platforms like Flipkart and Reliance’s JioMart.
The elimination of referral fees could also lead to lower prices for customers. Sellers may pass on the savings to buyers, making it more affordable for consumers to shop for low-cost products online. As a result, buyers could benefit from more competitive pricing, especially in categories like fashion, electronics, and home goods.
For sellers, this policy change is a massive win. Small businesses and startups who previously couldn’t afford to sell products under Rs 300 due to the referral fee will now have a more level playing field. This could lead to an increase in product diversity and greater competition on the platform, benefiting both sellers and customers.
India’s e-commerce market is filled with small local sellers who often find it challenging to compete with larger, more established businesses. Amazon’s new policy levels the playing field, making it easier for these local sellers to gain a foothold in the market and expand their customer base.
With this significant shift in Amazon’s fee structure, sellers across India should take advantage of this opportunity. Here are a few strategies to maximize this change:
Amazon India’s decision to eliminate the referral fee for products under Rs 300 is a game-changer for small and medium-sized businesses across the country. By removing this barrier, Amazon is making it easier for sellers to list affordable products, increase profitability, and offer better prices to customers. This move underscores Amazon’s commitment to supporting local businesses and making e-commerce more accessible to all.
For sellers, this is the perfect opportunity to expand your product range, improve your margins, and grow your business on one of India’s largest e-commerce platforms. For buyers, it means more competitive prices and a wider selection of affordable products.
With this bold move, Amazon has once again proven that it’s willing to go the extra mile to support the growth of India’s e-commerce ecosystem.
