Amazon and Flipkart have introduced changes to the rules regarding commissions and penalties for sellers listing products on their platforms, just before the start of the holiday season. These changes affect order cancellation fees, with Flipkart introducing penalties for late shipping and cancellations.
These innovations may impact small and medium online businesses. Ahead of the sales season, when a sharp increase in orders is expected on Amazon and Flipkart, sellers' operations will require greater caution due to the new rules from both e-commerce companies, which stipulate additional charges and fines for order cancellations or delays in shipping goods.
Amazon has changed the calculation mechanism for the order cancellation commission for Easy Ship and Self Ship sellers in India. The new rules came into effect on August 17, 2026. Previously, this commission was determined individually depending on the category and referral fees, but now it is calculated as a percentage of the order value.
Under the new rules, the cancellation commission will be 10 percent for orders valued under 10,000 rupees, 8 percent for orders from 10,001 to 50,000 rupees, 5 percent for orders from 50,001 to 100,000 rupees, and 2 percent for orders over 100,000 rupees. An 18 percent GST is also applied to this commission.
It is important to note that if the buyer cancels the order independently, no cancellation fee is charged to the seller. Fees are primarily applied in cases where the seller cancels the order on their own initiative. Furthermore, charges may be incurred if the seller does not ship the goods within the stipulated time and confirmation of this is not received, leading to automatic order cancellation.
Amazon Announces Commission Increase
In addition to changes in the cancellation commission, Amazon has announced an increase in the closing fee. According to the company, starting September 7, 2026, the closing fee will increase by 1 rupee for products valued up to 500 rupees and by 3 rupees for products valued above 500 rupees. This change applies to Fulfillment Center, Easy Ship, and Seller Flex channels. Amazon attributes this increase to rising fuel and logistics costs.
For its part, Flipkart has tightened rules related to order fulfillment for sellers. According to reports, the new system is effective from August 23, 2026. If a seller fails to hand over an order to Flipkart's logistics partner by the specified shipping date, they may be fined 30 rupees per shipment.
If a seller cancels an order after receiving it, a penalty of 60 rupees may be imposed. Moreover, if the order is canceled after missing the stipulated shipping deadline, the total penalty can reach 90 rupees. Thus, during the holiday season, sellers will need to pay closer attention to inventory management and the shipping system due to the increased volume of orders.
These changes have caused concern among many small and medium sellers. They argue that in e-commerce, order delays or cancellations are not always the seller's fault. Sometimes the problem is related to the late arrival of the pickup partner, logistics difficulties, or warehouse issues. Additional fines can increase costs for entrepreneurs operating on low margins.
Amazon asserts that these changes are aimed at ensuring a reliable delivery experience for customers and notes that seller-initiated cancellations occur in less than 1 percent of orders on Amazon.in. The company also states that protective measures exist for sellers in circumstances beyond their control.
Currently, these new rules do not directly impose fines on customers. Their impact is mainly on sellers trading on the platform. However, in the long term, if seller costs rise, this could affect prices, discounts, or product availability in certain categories. This will depend on whether entrepreneurs cover the increased costs themselves or incorporate them into the product price.
While customers expect fast delivery and minimal cancellations during the holiday season, sellers face the challenge of avoiding serious errors in inventory, packaging, and shipping amid high order pressure. The true test of the new Amazon and Flipkart rules will come during the upcoming holiday sales.