Amazon India has introduced one of its biggest changes for marketplace sellers by eliminating referral fees on products priced under ₹1,000. The move is designed to support small businesses and entrepreneurs selling on the platform while encouraging more merchants to list affordable products.
The policy will take effect from March 16, 2026, and is expected to benefit millions of sellers across the country.
What Is a Referral Fee?
A referral fee is the commission Amazon charges sellers for each product sold on its marketplace. This fee usually varies by category and typically ranges between 2% and 20% of the product price.
By removing this commission on lower-priced items, Amazon is significantly reducing the cost of doing business on its platform. Sellers can either increase their profit margins or offer more competitive prices to customers.
Which Products Are Covered?
The updated policy will apply to more than 12.5 crore products priced below ₹1,000 across over 1,800 categories. These include everyday consumer goods such as:
- Clothing and footwear
- Home and kitchen items
- Fashion jewellery and accessories
- Electronics accessories like earphones
- Toys and household essentials
The scale of the programme represents a major expansion from earlier initiatives that waived referral fees only on products priced below ₹300.
Additional Cost Benefits for Sellers
Apart from eliminating referral fees, Amazon is also making other changes to reduce selling costs:
- Lower shipping fees on some low-value products
- Simplified cost structures for sellers
- Greater incentives to list affordable products
These adjustments could allow sellers to save up to 70% in overall marketplace fees on certain items, improving profitability in the highly competitive e-commerce sector.
Why Amazon Is Making This Move
India’s e-commerce market has become increasingly competitive, with rivals such as Flipkart, Meesho and quick-commerce platforms attracting price-sensitive consumers.
By reducing seller fees, Amazon hopes to:
- Attract more sellers to its platform
- Increase the number of affordable products available
- Encourage higher sales volumes
- Strengthen its position in India’s growing online retail market.
Impact on Small Businesses
The policy is particularly beneficial for small businesses, startups and sellers from tier-2 and tier-3 cities, many of whom depend on online marketplaces to reach customers nationwide. Lower fees can help them offer competitive pricing while maintaining healthy profit margins.
As India’s online shopping ecosystem continues to expand, initiatives like zero referral fees could help boost seller participation and accelerate growth in the country’s digital commerce sector.
