In a strategic move to attract more sellers and customers, Amazon India has cut seller fees across 135 product categories for items priced under ₹300. The e-commerce giant rolled out this initiative on March 24, 2025, aiming to encourage the sale of low-value products while helping small businesses improve profitability.
This decision reflects Amazon’s commitment to support India’s micro-entrepreneurs and price-conscious consumers. At the same time, it intensifies competition with rivals like Flipkart, Meesho, and Reliance JioMart, all of which aggressively target India’s budget e-commerce segment.
Targeting the ₹300-and-Below Market
Amazon India executives closely studied consumer behavior and seller feedback before finalizing the fee cuts. They observed a consistent demand for low-priced products — items like mobile accessories, kitchen tools, stationery, and daily-use apparel — especially in Tier 2, 3, and rural towns.
However, many small sellers struggled to maintain viable margins due to high referral fees, fulfillment charges, and logistics costs. Amazon identified these challenges as bottlenecks that discouraged sellers from expanding their ₹300-and-below catalog.
To resolve the issue, the company reduced referral fees by up to 40% in specific categories. For instance, in mobile accessories, the fee dropped from 15% to 9%. In clothing and personal care products, the reduction ranged between 20% and 30%, depending on volume and sales performance.
Sellers who use Fulfillment by Amazon (FBA) will also benefit from discounted packaging and delivery charges on eligible SKUs. These combined benefits improve sellers’ net margins and incentivize them to list more affordable products on the platform.
Empowering Small Businesses and New Sellers
Amazon framed this decision as part of its long-term strategy to empower small and medium enterprises (SMEs). By reducing cost barriers, Amazon wants to encourage budding entrepreneurs, artisans, and first-time online sellers to join its marketplace.
In a statement, Manish Tiwary, Country Manager of Amazon India, emphasized the company’s goal: “We want to create a more inclusive ecosystem where sellers of all sizes can succeed. These fee changes directly benefit thousands of small businesses that serve everyday Indian consumers.”
To maximize impact, Amazon paired the fee cuts with a series of educational webinars, onboarding sessions, and toolkits. These initiatives guide new sellers through catalog creation, pricing strategies, and inventory management. Amazon has also launched region-specific seller support in Hindi, Tamil, and Telugu to expand outreach across linguistic zones.
Amazon claims that within 48 hours of announcing the changes, over 30,000 new SKUs under ₹300 went live on its platform. This figure highlights seller confidence in the revised cost structure.
A Calculated Move Against Rising Competition
Amazon didn’t make this decision in isolation. India’s e-commerce industry has become hypercompetitive, particularly in the budget shopping space. Platforms like Meesho and Flipkart’s Shopsy gained significant traction by offering ultra-low-priced goods with razor-thin seller commissions.
These platforms attracted a different seller profile — small-town resellers, home-based businesses, and wholesalers — who found Amazon’s earlier fee model expensive and complex. Amazon, long known for focusing on premium logistics and high-end products, recognized the need to evolve.
With this new fee structure, Amazon aims to reclaim market share in the low-margin, high-volume product category. It wants to send a clear signal: it supports sellers at every price point, not just those offering higher-ticket items.
Amazon’s internal strategy teams also believe that low-cost products increase customer stickiness. When buyers repeatedly find affordable, quality items on Amazon, they return for larger purchases as well. This behavior improves overall customer lifetime value.
Boosting Seller Retention and Catalog Growth
The fee reduction also seeks to reduce seller churn. Over the past two years, Amazon has seen an increase in seller dropouts, particularly among micro-sellers who list low-value items. Many cited high operating costs and low return on investment.
By making fee structures more seller-friendly, Amazon expects to stabilize its seller base and encourage catalog diversification. The company has introduced new tools that highlight best-selling low-value items, helping sellers identify demand trends and pricing sweet spots.
Sellers also receive predictive analytics showing their profit margins under the new fee regime. These tools simplify decision-making and allow sellers to optimize their listings.
Several existing sellers have responded positively to the change. Rajesh Jain, a Delhi-based seller who deals in kitchen gadgets, said, “Earlier, I avoided listing anything below ₹350 because I couldn’t make a profit. Now, I can add peelers, clips, and small tools without worrying about losses. It makes a huge difference.”
Logistics and Fulfillment Take Center Stage
To support this move, Amazon has also reworked its Smart Logistics Program for budget products. Smaller packages now qualify for lighter, cheaper shipping slabs. Amazon’s last-mile delivery teams also receive updated sorting instructions to batch low-cost items more efficiently, reducing overall delivery costs.
The company plans to expand its local seller hubs and use mini-fulfillment centers in cities like Jaipur, Coimbatore, and Guwahati. These micro-warehouses allow faster order processing for affordable items without straining Amazon’s primary fulfillment infrastructure.
Additionally, Amazon has introduced a pilot version of “Everyday Essentials Express,” a program that bundles low-cost daily-use items in one-day delivery zones. If the pilot succeeds, Amazon plans to scale it across 40 cities by the end of 2025.
Consumer Benefits and Shopping Trends
Consumers also stand to gain. Amazon believes the new structure will lead to a wider selection of affordable products, faster deliveries, and improved quality due to increased competition among sellers.
Many urban and semi-urban consumers often avoid buying low-cost items online due to high shipping charges or long delivery timelines. By making these purchases more cost-effective and convenient, Amazon hopes to change buyer behavior.
According to recent trends, customers increasingly search for sub-₹300 items during sale periods and festive seasons. The new fee policy allows Amazon to better serve this demand and position itself as the go-to platform for both premium and budget needs.
Early data from the company shows a 14% spike in searches for under-₹300 products since the announcement. Basket sizes have increased slightly, indicating that consumers prefer to club budget items together when they see better value.
Strategic Vision Beyond 2025
Amazon’s decision to lower fees comes as part of a larger transformation in its India strategy. The company no longer views India only as a market for premium growth. Instead, it acknowledges India’s complexity — a blend of aspirational consumers and value-driven shoppers.
Amazon has set its sights on becoming the largest e-commerce platform across all price points. Fee reductions, micro-fulfillment investments, vernacular support, and seller upskilling form the pillars of this new vision.
The company also plans to integrate AI-powered seller insights and launch regional brand partnerships to expand its low-cost catalog with trusted names in the local economy.
Final Thoughts
Amazon India’s move to reduce seller fees marks a bold and calculated step toward inclusivity, affordability, and long-term growth. It sends a powerful message: that even in a competitive landscape, strategic innovation and empathy toward sellers can unlock vast market potential.
By targeting the underserved ₹300-and-under category, Amazon not only opens doors for thousands of small businesses but also redefines e-commerce convenience for millions of Indians.