Selling on Amazon India looks straightforward: list a product, someone buys it, you ship it, get paid. But behind that sale lies a layer of fees and costs, referral fees, closing fees, shipping/fulfillment fees, GST, returns, etc. If you don’t understand them, your profit can vanish.
This article breaks down how to calculate your selling fees on Amazon India, step by step, and provides tools and practical tips so you can price your products profitably.
Why these fees matter
When you sell on Amazon India (via the marketplace model), Amazon charges you fees for the platform, fulfillment (if you opt in), and other services. According to Amazon’s Indian seller FAQ: “For each product sold, a referral fee is applicable which varies by product category and is calculated as a percentage of the total selling price of the product.”
If you ignore these fees when setting your price or calculating margins, you risk selling at a loss (even if your product cost is low). A good margin calculation helps you make decisions like: “Should I use Amazon Easy Ship or self-ship?” “What minimum margin do I need?” “Is the category too expensive to compete in?”
Key fee types on Amazon India
Here are the main fees you’ll face as an Indian seller on Amazon.
- Referral Fee (Commission / Marketplace Fee)
This is the primary fee: a percentage of your product’s selling price (including shipping, in many cases) that Amazon retains. For example, in India, the referral fee varies widely by category, from as low as ~2% to over 20% depending on price band and category.
Formula:Referral Fee = Selling Price × Referral Fee PercentageExample: If you sell a book for ₹450 and the category rate is 4.5%, then referral = ₹450 × 4.5% = ₹20.25 - Closing Fee / Fixed Fee
Some categories or price bands have a fixed “closing fee” or additional fixed cost on top of the referral fee. For example, there are fee slabs when using Easy Ship or FBA, depending on the item price. - Shipping / Fulfilment Fee / Weight Handling Fee
If you use Amazon’s fulfilment services (e.g., Easy Ship or FBA) then shipping and handling fees apply. Also, even if you self-ship, you’ll have logistics costs, which you should include in your margin calculation. - Storage Fees (for FBA / Fulfilment by Amazon)
If you store inventory in Amazon’s warehouses (FBA), you may incur storage charges (especially for bulky/slow-moving items). These are less obviously included in “selling fees” but directly impact your net profit. - GST / Taxes on Fees
Note that the fees you pay may have GST applied (or you may claim input tax credit), depending on your registration, etc. It’s important to factor tax treatment into your net margin. - Returns, Cancellations & Other Hidden Costs
If orders are returned, or you pay for removal of unsold inventory, damage charges etc, these also eat into your margin. While they’re not always labelled “fee” by Amazon, they are real costs.
Step-by-step: How to calculate your total Amazon selling fee
Here’s a process you can follow to estimate how much you’ll pay for a product sold, so you can determine your net margin.
Step 1: Determine your selling price
Decide the final price at which you intend to list your product (including shipping if you intend to charge it). Example: Suppose you plan to sell a gadget for ₹1,000.
Step 2: Identify the category & referral fee rate
Check which category your product falls into and find the applicable referral fee percentage. For instance, electronics categories often have lower percentages. According to a recent list, cameras, mobiles, etc have referral rates of ~5-12% depending on sub-category. Shiprocket
Let’s assumethe referral fee for this gadget category is 10 %.
Step 3: Calculate the referral fee
Referral Fee = ₹1,000 × 10% = ₹100
Step 4: Identify any fixed / closing fee
If there’s a fixed closing fee (say ₹30 for this price band), add that. Suppose the fixed fee is ₹30.
Step 5: Determine shipping/fulfilment cost
If you use Amazon Easy Ship, there might be a weight-based shipping fee, or if you self-ship, you need to estimate the courier cost. Suppose your fulfilment cost is ₹50.
Step 6: Apply GST / tax adjustments
Assume the fees are subject to GST (say 18%) to be borne by you, or you can claim input tax credit if registered — your accounting needs to account for this. Suppose GST on fees = ₹18 (18% of ₹100 + ₹30 + ₹50 = ₹180 total, GST ~ ₹32.4, but for simplicity use ₹18).
Step 7: Compute total fee & net proceeds
Total Fee = Referral Fee (₹100) + Fixed Fee (₹30) + Shipping/Fulfilment (₹50) + GST on fees (₹18) = ₹198
Net Proceeds from sale = Selling Price – Total Fee = ₹1,000 – ₹198 = ₹802
Step 8: Subtract your cost of goods & other costs
If your cost to procure the gadget is ₹600, then net profit = ₹802 – ₹600 = ₹202
Your margin = ₹202 / ₹1,000 = ~20.2%.
Example table for easy use
| Item Price | Referral % | Referral Fee | Fixed Fee | Shipping / Fulfilment | GST on Fees | Total Fee | Net Proceeds | Cost of Goods | Net Profit | Margin |
|---|---|---|---|---|---|---|---|---|---|---|
| ₹1,000 | 10% | ₹100 | ₹30 | ₹50 | ₹18 | ₹198 | ₹802 | ₹600 | ₹202 | 20.2% |
This gives you a framework to plug in your own numbers.
Using tools & calculators
Because fee schedules vary by category, price band, and fulfilment mode, it’s wise to use online calculators for accuracy. Several include:
- The Amazon India seller fees & pricing page.
- Third-party calculators: e.g., “Amazon India Seller Fees Calculator” by Digibells.
- General guidance on fee infrastructure.
These tools let you input product price, category, shipping mode, etc and estimate your fees quickly.
Special considerations for Indian sellers
Here are some India-specific issues to keep in mind:
- Category-specific referral rates: The referral fee is not uniform — some categories (books, media, jewellery) have special rates, and sometimes tiered by price band.
- Price bands matter: For example, on Amazon India, some categories charge 0% referral up to a certain price (for example, ≤ ₹300) and then escalate.
- Fulfilment mode choice: Choosing between self-ship and Amazon fulfilment (Easy Ship / FBA) can make a big difference in shipping and weight handling charges.
- GST input credit: If you are registered for GST, you may be able to offset GST on fees as input tax credit, which affects your real cost.
- Return rates & stock-age: The Indian market has high return rates in some categories and slow-moving inventory costs more (for FBA storage etc).
- Frequent fee changes: Amazon sometimes updates its commission structures (especially around festive seasons). For example, Amazon India adjusted some fee structures before the festival season.
- Currency & INR rounding: Fees are in Indian rupees; ensure you factor in local currency, bank transfer timelines, etc.
Tips to improve your margin
Once you know how to compute fees, consider these strategies:
- Negotiate better procurement costs: Lower your cost of goods, so your net profit cushion improves.
- Choose the right fulfilment mode: For heavy items, self-ship may cost less than FBA/Easy Ship.
- Sell in lower-fee categories: If feasible, focus on categories with lower referral percentages.
- Optimize product size/weight: lightweight, compact items cost less in shipping & fulfilment.
- Monitor inventory turnover: Slow-moving items in Amazon’s warehouses cost storage fees.
- Use accurate cost-of-goods: Don’t forget packaging, returns, and damaged stock cost.
- Use dynamic pricing: If fees increase (Amazon updates) or competitor pricing changes, adjust your margin accordingly.
- Track actual fees post-sale: Use Amazon’s monthly statement/settlement to compare actual vs estimated fee to refine your estimates. Amazon’s “Estimate your fee per unit sold” tool can help.
Frequently asked questions
Q: Does Amazon deduct fees from my payout automatically?
Yes — Amazon deducts referral fees (and other applicable fees) before disbursing funds to you in your settlement. The “earned” amount you see is after those deductions.
Q: If I increase shipping charges, can I reduce Amazon fees?
Partially. Amazon’s referral fee is usually a percentage of “total price (including shipping)” in some cases. Because shipping might increase the base, your fee may increase too. Always check category rules.
Q: What if I switch fulfilment methods mid‐way?
You’ll need to recalculate fees because fulfilment/shipping fees and storage charges will vary. Use calculators or Amazon’s tool to compare.
Q: Are there hidden fees I should watch out for?
Yes — storage fees, return processing fees, disposal or removal fees for unsold stock, “removal” fees, and penalties for non-compliance with Amazon policies. These are often less visible initially but can add up.
