Amazon and Flipkart have revised their seller fee and penalty structures ahead of India's upcoming festive shopping season. The changes are focused on order cancellations, delayed dispatches and other fulfilment related issues and are expected to place greater emphasis on timely order processing by sellers.

The revisions come at an important time for India's e commerce industry. The festive season generally brings a significant increase in online shopping, with millions of customers placing orders across categories such as electronics, fashion, home appliances and consumer products. Higher order volumes also create additional pressure on sellers and logistics networks.

According to information issued to sellers, Amazon changed its cancellation fee structure for sellers using its Easy Ship and Self Ship services with effect from August 17, 2026. Under the revised system, the cancellation charge is calculated as a percentage of the order value rather than being linked to category specific referral fees.

For orders valued below Rs 10,000, the cancellation charge is 10 percent of the order value. Orders between Rs 10,001 and Rs 50,000 attract an 8 percent charge. For orders between Rs 50,001 and Rs 1 lakh, the rate is 5 percent, while orders above Rs 1 lakh carry a 2 percent charge. An applicable Goods and Services Tax is charged separately on the fee.

The revised Amazon policy applies when a seller cancels an order for reasons other than a customer requested cancellation. The charge can also apply when an order is automatically cancelled because the seller does not ship and confirm the order within the specified time after the estimated shipping date.

Amazon has also announced an increase in closing fees across some of its fulfilment channels from September 7, 2026. The company has attributed the increase to higher fuel and logistics costs. The closing fee is expected to rise by Rs 1 for products priced up to Rs 500 and by Rs 3 for products priced above Rs 500 across the affected fulfilment channels.

Flipkart has taken a different approach by introducing a three tier penalty structure for seller fulfilment failures. The new system came into effect on August 23, 2026.

Under the revised Flipkart structure, a shipment that is not made ready for pickup by the committed Dispatch By Date can attract a penalty of Rs 30 per shipment. A seller cancellation or an automatic cancellation following three missed dispatch deadlines can attract a Rs 60 penalty. If an order is delayed and subsequently cancelled, the penalty can rise to Rs 90 per shipment.

The new rules are intended to encourage sellers to maintain better fulfilment standards during a period when order volumes are expected to increase. Timely dispatch is particularly important during major online sales because delays can affect customer satisfaction, delivery schedules and inventory management.

Flipkart's policy also reportedly provides certain benefits to sellers that maintain strong compliance with dispatch requirements. These can include faster settlement of payments and advertising credits, according to reports. New sellers may receive an exemption from the penalty structure during their first three months on the platform.

The changes have nevertheless generated concerns among sections of the seller community. Small and medium businesses often operate with relatively narrow profit margins, meaning additional cancellation fees and penalties could increase their operating costs.

Seller representatives have argued that not every cancellation or delay is necessarily within a seller's control. Logistics problems, inventory issues and customer initiated changes can sometimes affect the fulfilment process. Sellers are therefore watching how the revised policies are implemented during the high volume festive period.

For Amazon, the new cancellation fee structure places greater emphasis on the value of an order. This means the financial impact of a cancellation can vary considerably depending on the product's selling price.

For example, under the new percentage based structure, a seller cancelling a qualifying order worth Rs 5,000 could face a cancellation charge of Rs 500 before applicable taxes. A qualifying order worth Rs 20,000 would carry an 8 percent charge, equivalent to Rs 1,600 before taxes.

The policy therefore makes accurate inventory management increasingly important for sellers. Sellers may need to monitor stock levels more closely and ensure that products listed as available are actually ready for dispatch.

The festive shopping season is one of the most important periods for Indian online retailers. Platforms typically see a sharp increase in customer traffic and transactions during major sales campaigns. This makes reliable fulfilment particularly important because a large number of delayed or cancelled orders could affect both customers and sellers.

The latest changes also reflect the broader competition among India's major e commerce platforms. Amazon and Flipkart are seeking to improve delivery reliability while competing aggressively for customers and sellers.

For customers, the revised policies are primarily aimed at improving the reliability of order fulfilment. If sellers are able to maintain accurate inventory and dispatch products on time, customers could benefit from fewer cancellations and delivery delays.

However, it remains unclear whether increased seller costs could indirectly influence product pricing. Sellers facing higher operational expenses may reassess their pricing, margins or promotional strategies, particularly during the festive period.

The changes also highlight the importance of seller performance standards in modern online marketplaces. E commerce platforms depend on thousands of independent sellers, logistics providers and fulfilment centres to complete an order successfully. A failure at any stage can affect the customer's overall experience.

Amazon's revised cancellation system and Flipkart's penalty structure therefore represent different methods of encouraging sellers to improve fulfilment performance. Amazon has linked its cancellation charge to order value, while Flipkart has introduced fixed penalties based on the type and frequency of fulfilment failures.

The policies are likely to receive increased attention as India's festive shopping season approaches. Sellers will need to understand the revised terms, monitor their dispatch deadlines and ensure that inventory information remains accurate.

Customers, meanwhile, are unlikely to see these penalties directly because they are primarily directed at marketplace sellers. The main objective is to improve the reliability of orders placed through the platforms.

The revised structures also demonstrate how e commerce companies are attempting to balance customer experience with the operational challenges faced by sellers. Faster delivery and fewer cancellations are important for customers, but sellers must also manage inventory, logistics and costs effectively.

As festive sales approach, the performance of these policies will be closely watched by sellers and industry observers. If the measures successfully reduce cancellations and dispatch delays, platforms could see improvements in customer satisfaction and fulfilment efficiency.

At the same time, concerns about increased costs could continue, particularly among smaller sellers with limited margins. The coming festive shopping season will therefore provide an important test of whether stricter fulfilment policies can improve reliability without placing excessive financial pressure on marketplace sellers.

Overall, Amazon and Flipkart's latest policy changes mark a significant shift in seller management ahead of the festive season. Sellers should carefully review the applicable fee and penalty rules and ensure that their inventory, dispatch and order management systems are prepared for the expected increase in demand.

Key Changes

Amazon cancellation charges now depend on order value.

Amazon charges range from 2 percent to 10 percent for qualifying seller cancellations.

Amazon closing fees are scheduled to increase from September 7, 2026.

Flipkart has introduced penalties of Rs 30, Rs 60 and Rs 90 for different fulfilment failures.

The revised policies are being implemented ahead of the festive shopping season.