Amazon Extends Zero Referral Fee to Boost Low-Cost Online Sales

Amazon India has extended its zero referral fee for products priced below ₹1,000 until December 31, following a similar move by Flipkart. The referral fee, which usually ranges from 2% to 16.5% depending on the category, was earlier waived only until November 30. The step aims to support small sellers and encourage higher sales during the winter season.

Flipkart recently rolled out a zero-commission model for items under ₹1,000 and removed commissions entirely on its Shopsy platform. It has also reduced seller return fees by ₹35, potentially lowering operational costs by up to 30%. These changes are part of a broader competition strategy against value-focused platforms like Meesho, which earns mainly through ads and logistics charges.

If sellers pass on the benefits, consumers could see lower prices, boosting demand from urban, tier-1, tier-2, and smaller-town markets. Amazon had earlier cut referral fees for products priced under ₹300 to help small businesses, while Flipkart aims to attract middle-class shoppers and expand its product selection. A BofA Securities note highlights that Meesho caters to mass-market users, Amazon attracts premium buyers, and Flipkart targets urban consumers.

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