In a major move to support small businesses and boost affordable e-commerce, Amazon India has removed referral fees on products priced below ₹1,000. This update came into effect on March 16, 2026, and is expected to significantly reduce the cost of selling for a large number of sellers across the platform.
This change is especially important in a price-sensitive market like India, where low-ticket products drive a major share of online purchases.
What Is the Amazon Referral Fee?
A referral fee is the commission Amazon charges sellers for each product sold on its marketplace. This fee varies by category and typically ranges between 5% to 15% of the product’s selling price.
For example:
If a seller lists a product for ₹800 and the referral fee is 10%, they would pay ₹80 as commission.
With the new update, this fee becomes ₹0 for products priced below ₹1,000.
Key Highlights of the New Policy
1. Zero Referral Fee for Products Under ₹1,000
Sellers will no longer pay referral fees on items priced below ₹1,000, directly improving margins or allowing more competitive pricing.
2. Applies Across Multiple Categories
The policy applies to a wide range of categories, especially those focused on everyday and affordable products such as fashion accessories, home essentials, and low-cost consumer goods.
3. Reduction in Shipping Costs (Selected Cases)
Amazon has also reduced Easy Ship logistics charges in certain cases, particularly for low-priced items (such as products below ₹300).
This further lowers the overall cost of selling, although savings may vary depending on product size, weight, and location.
4. Lower Overall Selling Costs
By removing referral fees and adjusting logistics charges, sellers can expect meaningful cost reductions, especially in high-volume, low-ticket categories.
Why Amazon Introduced This Change
This move is part of Amazon’s strategy to strengthen its position in India’s highly competitive and price-sensitive e-commerce market.
Key reasons include:
- Attracting more small businesses and first-time sellers
- Increasing the supply of affordable products
- Competing more aggressively with platforms like Meesho and Flipkart
- Encouraging higher transaction volume in low-price segments
What This Means for Sellers
This update creates a clear advantage for sellers dealing in products under ₹1,000.
Sellers can now:
- Increase profit margins by saving on commissions
- Lower product prices to improve competitiveness
- Test new products with reduced financial risk
- Scale faster in high-volume categories
For small manufacturers, local brands, and new entrepreneurs, this significantly reduces the barrier to entry.
Impact on India’s E-commerce Landscape
This policy could reshape how affordable products are sold online in India.
Expected outcomes:
- More sellers entering the marketplace
- Growth in low-ticket, high-volume product categories
- Increased competition among e-commerce platforms
- Better pricing and product variety for customers
India continues to be a key growth market for Amazon, and this move signals a stronger push toward expanding seller participation and affordability.
A Strong Opportunity for Growth
Amazon India’s decision to eliminate referral fees on products under ₹1,000 is a practical, seller-focused update.
For sellers, it’s not just about saving fees - it’s about:
- Pricing smarter
- Scaling faster
- Entering the market with lower risk
If used strategically, this policy can help sellers build volume, improve margins, and grow sustainably in one of the world’s fastest-growing e-commerce markets.
