Online commerce platforms Amazon and Flipkart have restructured cancellation fees ahead of the festival season in the country. According to a report by PTI, Amazon India has changed the manner in which it calculates order cancellation fees for sellers using its Easy Ship and Self Ship services. As per the notice on Amazon India’s seller forum, the change is effective from August 17. Similarly, Flipkart has also put in place a three-tier penalty structure for lapses in order fulfilment, effective August 23, 2026. The changes, sellers say, adds to the financial burden on small and medium enterprises already operating on thin margins, the report states.
What is Amazon’s Easy Ship and Self Ship services
Under Self Ship, a seller on Amazon packs and delivers the product themselves, using their own courier or delivery service. No Amazon logistics are involved in self ship.As explained in the PTI report, the cancellation fee was earlier based on category-specific referral charges. But after the new change, it will now be computed as a percentage of the order value.“Under the revised structure, sellers are charged 10% of the order value for orders below Rs 10,000, 8% for orders between Rs 10,001 and Rs 50,000, 5% for orders between Rs 50,001 and Rs 1,00,000, and 2% for orders above Rs 1,00,000, with an 18% goods and services tax levied in addition,” the report says.The cancellation fee is applicable both when a seller cancels an order for reasons other than a buyer’s request, and when an order is automatically cancelled because the seller does not ship and confirm the shipment within 24 hours of the estimated ship date.
Amazon to increase closing fees across its Fulfillment Center
Amazon is also increasing the closing fees across its Fulfillment Center, Easy Ship, and Seller Flex channels. According to the PTI report, the change will be effective from September 7, 2026.For those unaware, Amazon charges a closing fee every time a product is sold on its platform. The fee depends on the product’s price range and the fulfillment channel used by the seller. The fee will increase by Re 1 for products priced up to Rs 500 and by Rs 3 for products priced above Rs 500. Amazon said the increase is due to rising fuel and logistics costs.
What is Flipkart’s three-tier penalty structure
Flipkart has introduced a three-tier penalty system for sellers who fail to meet order fulfilment deadlines. The new policy came into effect on August 23, 2026. Under the new structure, sellers will be charged Rs 30 per shipment if an order is not ready for pickup by the committed Dispatch By Date (DBD). As stated in the PTI report, a seller cancellation, or an automatic cancellation after three missed dispatch deadlines, will attract a Rs 60 penalty per shipment. If an order is delayed and later cancelled, the penalty will rise to Rs 90 per shipment.Earlier, missing a DBD deadline could lead to a seller’s account being temporarily locked, which could have a bigger impact on their business. New sellers will not be covered by the policy for the first three months of their selling journey. People aware of the development told PTI that the new system aims to encourage better planning by sellers and improve the customer experience.
What sellers say
As cited in the PTI report, some sellers said that cancellations were at times caused by factors outside their control, such as delivery personnel failing to arrive for a scheduled pickup. They also questioned why cancellation fees should apply to the seller in such instances.Another seller said the difference in total fees between sellers using Amazon’s fulfilment network and those on Easy Ship could be as high as Rs 45 per unit on comparable orders, which the seller claims, creates an unfair competitive situation.The PTI report quotes Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), who said Indian online sellers recognise the need for timely fulfilment and high customer service standards, but that the recent increase in cancellation, dispatch and other seller penalties by major e-commerce marketplaces, particularly ahead of the festive season, was a matter of concern for MSMEs already facing thin margins and rising costs.“Sellers should not become the default financial shock absorbers of the e commerce ecosystem. Marketplaces must ensure transparent attribution of responsibility, reasonable and proportionate penalties, adequate advance notice of fee changes and a simple mechanism to challenge wrongful charges. The objective should be to improve fulfilment while making digital commerce more, not less, viable for small businesses,” Kumar added.