Amazon seller fee cuts give merchants lower costs on millions of products, as Amazon and Flipkart use reduced commissions to attract sellers and grow sales beyond major cities.
Amazon and Flipkart are adjusting their commission structures as they compete for sellers and shoppers beyond India’s biggest metropolitan areas. The Amazon seller fee cuts focus heavily on lower-priced products, while Flipkart has also removed commissions for sellers in its fashion category.
The strategy reflects a shift toward markets where affordability can have a major effect on purchasing decisions. Non-metro online shopping grew from just over one-fifth of consumers in 2016 to nearly one-third in 2025.
Amazon and Flipkart Cut Fees to Reach Smaller Markets
According to NewsBytes, Amazon and Flipkart are cutting or waiving commissions across a wide range of products as they seek to expand their presence in India’s smaller cities and towns. The Amazon seller fee cuts are designed to attract more sellers while helping merchants reduce operating costs and offer more competitive prices.
The fee reductions have been implemented twice since last year for products priced below ₹1,000 across several categories, where lower-priced items make up a large share of purchases in Tier-2 and smaller markets. Flipkart also recently waived commissions entirely for sellers in the fashion category, adding to the pressure on marketplace fees.
For sellers, lower Amazon seller fees can reduce operating costs and make pricing products more competitive, while also encouraging smaller and local businesses to join online marketplaces. The Amazon fee reduction comes as ecommerce platforms place greater focus on non-metro markets, where online shopping has grown from just over one-fifth of consumers in 2016 to nearly one-third by 2025.
The changes also come as Amazon and Flipkart compete for greater sales volumes in smaller cities, where consumer preferences, shopping behavior, and price sensitivity differ from major metros. For businesses considering selling on Amazon, the fee changes highlight how marketplace commissions can affect operating costs, while an Amazon agency can help sellers assess how changes in marketplace costs may affect their overall strategy.
Amazon and Flipkart Shift Focus Beyond Major Cities
The competition is increasingly moving beyond India’s largest metropolitan areas as Amazon and Flipkart target sellers and shoppers in smaller cities. The Economic Times states that the latest Amazon seller fee cuts are part of a wider push to build sales in markets where shopping behavior, price sensitivity, and product preferences differ from major metros.
| Market Indicator | Reported Detail |
|---|---|
|
Non-metro online shoppers in 2016
|
Just over 20%
|
|
Non-metro online shoppers in 2025
|
Nearly one-third
|
|
Amazon new Prime sign-ups from Tier-2 and Tier-3 cities
|
More than 70%
|
|
Amazon and Flipkart seller fee cuts
|
Twice since last year
|
|
Flipkart fashion commissions
|
Removed entirely
|
The growth in non-metro shopping is also changing where marketplaces look for new sellers, with both companies increasing efforts to bring merchants from smaller towns onto their platforms. For sellers, lower Amazon seller fees can make it easier to price products competitively in markets where affordable products are important to shoppers.
Amazon reported that more than 70% of its new Prime sign-ups this year came from Tier-2 and Tier-3 cities, showing the growing importance of these markets to its business. At the same time, Flipkart has been onboarding sellers from cities including Azamgarh, Saharanpur, and Bhilwara as both platforms push further into smaller markets.
For merchants selling on Amazon, the broader shift could create more opportunities as marketplaces pursue higher transaction volumes outside major cities. The fee reductions may pressure platform profitability in the short term, but analysts expect increased sales volumes to support longer-term growth.
Amazon Expands Zero-Referral Fee Coverage
Amazon’s latest Amazon seller fee cuts expand its zero-referral fee policy from products priced below ₹300 to products priced under ₹1,000. The new structure took effect on March 16 and covers more than 125 million products, while Amazon also reduced some shipping charges.
The earlier zero-referral fee policy applied to roughly 12 million products priced below ₹300 and was followed by a 50% increase in new sellers joining Amazon India. The expanded program shows how Amazon seller fees are being adjusted to bring more merchants onto the marketplace, as reported by Reuters.
Amazon is also competing with Flipkart and Reliance Industries’ retail business, while quick-commerce platforms such as Blinkit and Swiggy Instamart are gaining market share in India. These competitive pressures make seller acquisition an important part of Amazon’s push to strengthen its position in the country.
Amazon said in December that it plans to invest more than $35 billion in India by 2030, with spending aimed at AI infrastructure, retail logistics, and small-business growth. For businesses selling on Amazon, the expanded fee structure comes as the company continues investing in the broader Indian ecommerce market.
