Ecommerce sellers face rising costs in India ahead of festive season

India’s e-commerce landscape is shifting as major marketplaces, Flipkart and Amazon, implement new penalty and fee structures for third-party sellers. These changes, introduced just ahead of the high-volume festive shopping season, are creating financial friction for merchants already grappling with inflationary pressures.

Flipkart has introduced a flat ₹90 penalty for missed delivery deadlines and order cancellations, while Amazon has transitioned its cancellation fees from category-based charges to a percentage of order value. For sellers of high-ticket items like electronics, these costs can accumulate quickly. Amazon stated that these fees apply specifically to seller-initiated cancellations, which it claims represent a small fraction of overall transactions.

Industry representatives, such as the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), have raised concerns that these penalties place an undue burden on small and medium-sized enterprises (MSMEs). Sellers frequently report that delivery delays are often the result of courier failures rather than merchant error, making the blanket penalties a significant point of contention.

While market projections suggest robust growth in e-commerce gross merchandise value over the next two years, analysts note that these figures often overlook the rising operational costs faced by sellers. These costs, coupled with broader industry challenges in supply chains, may limit the ability of smaller brands to sustain thin profit margins during peak periods.