Amazon, Flipkart Introduce Seller Penalties Before Festive Season

Amazon and Flipkart have introduced new penalties for sellers who fail to meet order fulfillment and dispatch deadlines, with the changes taking effect in mid-August, just before India's peak festive shopping season.

Under Amazon's revised policy, cancellation fees are now tied to the order value. Sellers will incur a fee of 10% for orders below ₹10,000, with decreasing percentages for higher-value orders, plus an 18% Goods and Services Tax (GST). These fees apply to orders handled through Easy Ship and Self Ship, where sellers manage their own inventory and packaging. The platform may also auto-cancel an order and charge the seller if dispatch is not confirmed within 24 hours of the estimated ship date.

Flipkart's new penalties are linked to dispatch timelines. Sellers will face a ₹30 charge for missing the dispatch-by date, ₹60 for cancelling an order after receipt, and ₹90 if both conditions are met. These measures aim to enforce timely fulfillment during periods of high order volume.

The introduction of these penalties follows previous reductions in seller fees by both platforms. Notably, these new charges were communicated through seller portal notices rather than public announcements. The move has raised concerns among sellers regarding increased costs and risks, with trade bodies criticizing the unilateral nature of the policy changes, which they argue can disadvantage small and medium-sized businesses operating on these e-commerce platforms.