Amazon Cuts Seller Fees Amid Escalating Online Marketplace Fee War

Amazon India Expands Zero-Commission Policy

Amazon India has expanded its zero-commission policy to all products priced under ₹1,000, increasing the policy's impact 10 times to 12.5 crore products across various categories. The e-commerce firm's policy aims to support small sellers who operate from home or small units in a single city or area, constituting 70-80% of Amazon's 1.7 million seller base in India.

The zero-commission policy is expected to benefit small sellers, particularly those offering everyday consumables, such as atta additives, casual t-shirts, and seasonal goods. This move follows Amazon's previous reduction in seller fees and shipping costs for small sellers in the fiscal year 2025-2026.

Amazon's ₹5 marketplace fee, introduced in June 2025, applies to all orders across the platform and is paid by the customer at checkout. However, it is not applicable to orders from Amazon Bazaar, the company's dedicated zero-commission vertical, or to some items, such as gift cards and digital services.

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Meesho, Amazon's competitor, has also seen success by focusing on value retailers and value-conscious customers in small-town India and by making zero-commission models successful in these high-volume markets. However, analysts tracking Meesho say its business model still faces little competition from Amazon and Flipkart, which have also introduced zero-commission policies for products priced below ₹1,000.

Financial Performance

In the December 2025 quarter, Amazon Seller Services Pvt Ltd, the marketplace business of Amazon India, reported a 19% increase in revenues to ₹30,491 crore while losses shrank substantially to ₹374 crore. Meesho reported a nearly 32% year-on-year jump in revenues from operations to ₹3,518 crore in the same quarter, although losses ballooned to over ₹490 crore.