Every new seller runs the same maths in their head: buy at ₹250, sell at ₹799, pocket the difference. Then the first settlement lands and the number is a fraction of what they expected. If you have read our complete guide to selling online in India, you already know Amazon is the platform most sellers start with. This piece is about what it actually costs to stay there.
Below, we break down every one of the Amazon India seller fees that sit between your selling price and your bank account, then run three per-unit P&L examples so you can see where the money goes. No brochure numbers. Just the stuff that shows up in your payment report.
Why the “Selling Price Minus Product Cost” Math Is Wrong
Amazon does not charge you one fee. It charges you five or six small ones, and each looks harmless on its own. A 12% referral fee here, a ₹20 closing fee there, ₹70 for shipping. Stack them up with returns and ad spend, and 35–50% of your selling price can disappear before you even count what you paid your supplier.
The sellers who survive past year one are the ones who price with the full stack in mind from day one.
The Amazon India Seller Fees Charged on Every Order
1. Referral Fee (The Commission)
This is Amazon’s cut of the sale, charged as a percentage of the total selling price, including GST. It varies widely by category and price band:
- Low-margin categories like some electronics and large appliances sit in the low single digits to around 9%.
- Home, kitchen and beauty usually fall between 8% and 15%.
- Fashion and accessories can run higher, especially above certain price points.
- Products under ₹300 in many categories now carry zero referral fee, a change Amazon rolled out in 2025 to compete with Meesho.
Check your exact category rate on Seller Central before you finalise pricing. A two-point difference on a ₹1,000 product is ₹20 per unit, which adds up fast at scale.
2. Closing Fee
A flat fee per item sold, based on price band and fulfilment method. It is small, typically in the ₹5 to ₹60 range, but it hits low-priced products the hardest. On a ₹199 item, a ₹20 closing fee is already 10% of your price.
3. Shipping or Weight Handling Fee
If you use Easy Ship or FBA, Amazon charges for delivery based on the weight (or volumetric weight, whichever is higher) and the distance: local, regional or national. A 500g parcel going across the country costs noticeably more than one going within your city.
The trap: volumetric weight. Ship a light but bulky pillow in an oversized carton and you will pay for air.
4. GST on Amazon’s Fees
Amazon adds 18% GST on every fee it charges you. If you are GST-registered (and you must be to sell on Amazon in most categories), you can claim this back as input tax credit. So it is a cash-flow cost rather than a true expense, but only if your filings are clean.
5. TCS and TDS Deductions
Amazon deducts 0.5% TCS under GST and 0.1% TDS under Section 194-O from your payouts. Neither is a cost; both are credits you can claim. But they lock up working capital, and a lot of first-time sellers mistake them for extra fees.
FBA Fees: What You Pay for Amazon to Handle Everything
Fulfilled by Amazon gets you the Prime badge, faster delivery and usually better conversion. It also comes with its own set of charges:
- Pick and pack fee: charged per unit for picking your item off the shelf and packing it.
- Weight handling fee: the shipping cost, charged by weight and distance.
- Monthly storage fee: charged per cubic foot of space your inventory occupies.
- Long-term storage fee: an extra charge on stock sitting in the warehouse too long. This is where slow sellers bleed.
- Removal and disposal fees: if you want dead stock back or destroyed, you pay for that too.
- Inbound shipping: getting stock to Amazon’s fulfilment centre is on you, whether through Amazon’s partnered carrier or your own.
FBA works beautifully for small, fast-moving, non-fragile products. It works terribly for bulky, seasonal or slow items. One overstocked Diwali SKU can eat three months of profit in storage fees by February.
The Costs Nobody Puts in the Fee Calculator
Returns
Amazon’s fee calculator does not model returns. Your P&L has to.
When a customer returns an item, you typically lose the forward shipping, pay for reverse shipping, and eat a refund processing charge. And that is if the product comes back in sellable condition. Used, damaged or swapped products are common enough in fashion and electronics that you need a write-off allowance.
Rough return rates sellers report:
- Home and kitchen: 3–8%
- Electronics accessories: 6–12%
- Apparel and footwear: 20–35%, sometimes higher
If you sell apparel and have not priced in a 25% return rate, your margins are fiction.
Advertising
Organic visibility on Amazon India is shrinking. The first screen of most search results is heavily sponsored, and new listings with zero reviews rarely rank without paid support.
The metric to watch is TACoS (total ad spend as a percentage of total sales), not just ACoS. Many established sellers in competitive categories run a TACoS of 8–15%. New launches often spend 20–30% in the first two or three months just to get traction and reviews.
Packaging, Rejected Stock and Your Own Time
Poly bags, cartons, labels, bubble wrap: budget ₹10–₹25 per unit. Add products that fail quality checks at the fulfilment centre, account suspensions while you fix a listing issue, and the hours spent on reconciliation. None of it appears on an invoice from Amazon, but all of it is real.
If you are still deciding between marketplaces, our Amazon India vs Flipkart vs Meesho seller comparison lays out how the fee structures stack up against each other.
Real P&L Examples: Three Products, Three Very Different Outcomes
All figures are per unit sold and shown excluding GST, since GST collected from the buyer is passed on to the government and GST paid on purchases and fees comes back as input credit. Fee values are realistic approximations. Amazon revises its rate card several times a year, so plug your own numbers into Seller Central’s revenue calculator.
Example 1: Stainless Steel Water Bottle (Easy Ship)
| Line Item | Amount (₹) |
|---|---|
| Selling price (incl. 18% GST) | 799 |
| Net sale value (excl. GST) | 677 |
| Referral fee (~12%) | −96 |
| Closing fee | −20 |
| Easy Ship shipping (~750g, regional) | −75 |
| Product cost (landed) | −260 |
| Packaging | −15 |
| Returns allowance (~6% rate) | −9 |
| Advertising (10% TACoS) | −80 |
| Net profit per unit | 122 |
That is roughly a 15% margin on the selling price. Healthy, but notice that Amazon’s fees plus ads (₹271) are larger than the product cost itself.
Example 2: Cotton Kurti (Easy Ship)
| Line Item | Amount (₹) |
|---|---|
| Selling price (incl. 5% GST) | 699 |
| Net sale value (excl. GST) | 666 |
| Referral fee (~15%) | −105 |
| Closing fee | −20 |
| Shipping (~400g, national) | −65 |
| Product cost (landed) | −240 |
| Packaging | −12 |
| Returns allowance (~25% rate) | −47 |
| Advertising (12% TACoS) | −84 |
| Net profit per unit | 93 |
About 13% margin. Now push the return rate to 35%, which is common in ethnic wear during wedding season, and the returns line almost doubles to around ₹75. Profit falls to roughly ₹65 per unit. One bad size chart can wipe out a third of your margin.
Example 3: Bluetooth Neckband (FBA)
| Line Item | Amount (₹) |
|---|---|
| Selling price (incl. 18% GST) | 1,499 |
| Net sale value (excl. GST) | 1,270 |
| Referral fee (~9%) | −135 |
| Closing fee (FBA) | −40 |
| FBA pick, pack and weight handling | −80 |
| Storage (~60 days average) | −6 |
| Inbound shipping to fulfilment centre | −15 |
| Product cost (landed) | −560 |
| Packaging | −20 |
| Returns allowance (~8% rate) | −17 |
| Advertising (15% TACoS) | −225 |
| Net profit per unit | 172 |
Around 11.5% margin, and the biggest cost after the product itself is advertising. Electronics is a crowded, ad-driven category. Cut TACoS from 15% to 10% as reviews build and profit jumps to about ₹247 per unit. That single lever matters more than any fee negotiation.
What These Numbers Actually Tell You
- Amazon takes 25–35% of your net sale value once you add referral, closing and shipping fees. Plan for it.
- Ads are the swing factor. The difference between a profitable SKU and a loss-maker is often just five points of TACoS.
- Returns decide fashion margins. Accurate size charts and honest photos are profit tools, not nice-to-haves.
- Low price points are brutal. Below ₹300, fixed fees and shipping eat a huge share even with zero referral fee.
- FBA storage is quiet but dangerous. Send small, frequent shipments instead of one large one.
How to Protect Your Margins on Amazon India
- Build a per-SKU P&L sheet before listing, with returns and ads included. If the number does not work at 15% TACoS, it probably will not work at all.
- Audit your settlement reports monthly. Wrong weight slabs and incorrect fee charges happen more often than you would think, and Amazon does reimburse valid claims.
- Measure and photograph your packed product. Getting the dimensions right can drop you into a cheaper shipping slab.
- Bundle low-priced items. A pack of three at ₹549 carries the fixed costs far better than one at ₹199.
- Reconcile TCS and TDS every quarter so those credits actually come back to you.
- Kill slow SKUs early. Liquidate dead stock before long-term storage fees kick in.
The Bottom Line
Selling on Amazon India can be genuinely profitable, but the margin lives in the details, not in the headline commission rate. Expect Amazon’s fees to take a quarter to a third of your net revenue, add returns and advertising on top, and price accordingly. Sellers who treat those as fixed costs from day one build businesses. Sellers who treat them as surprises usually do not last a year.
It is also worth keeping an eye on how the wider market is shifting. Many brands that left marketplaces to go direct are now returning, and understanding why so many D2C brands are moving back to marketplaces will help you decide how much of your business Amazon should carry.
Run your own numbers, trust the settlement report over the dashboard, and never price a product without knowing what it really costs to sell.
