How marketplace fees eat into your profit
For most e-commerce sellers, the headline selling price is not the money that hits your bank account. Between referral fees, shipping, GST on fees, and TCS, a typical order on Amazon India loses 20–30% before you've even factored in your product cost.
Understanding the exact fee structure — by category, by platform, by fulfilment type — is the difference between growing profitably and unknowingly selling at a loss.
Amazon India fee structure (FY 2026-27)
Referral fee — a percentage of the selling price, varies by category:
| Category | Referral fee |
|---|---|
| Mobile Phones | 4% |
| Electronics, Computers | 6–8% |
| Clothing & Apparel | 10% |
| Home & Kitchen | 8% |
| Beauty & Personal Care | 8% |
| Jewelry | 5% (max ₹750) |
Closing fee — charged per order:
- ≤₹250: ₹5 · ₹251–499: ₹10 · ₹500–999: ₹20 · ₹1000–9999: ₹30 · ₹10,000+: ₹50
Shipping (Easy Ship):
- Local zone: ~₹35 base + ₹15 per additional 500g
- Regional/National: ₹65–80 base
GST on fees: 18% on all platform fees (referral + closing + shipping)
TCS: 1% of net sale — deducted at source, but recoverable in your ITR
Flipkart fee structure (FY 2026-27)
Similar structure: commission + platform fee + shipping. Clothing commissions go up to 15%. Flipkart Smart Fulfilment (FSF) rates are similar to Amazon Easy Ship.
Meesho fee structure (FY 2026-27)
Meesho's value proposition to sellers: zero shipping charge (Meesho handles logistics entirely) and lower commissions (0–12% in most categories). No TCS deduction. Ideal for value-segment products where margins are thin.
The TCS trap (and why it's recoverable)
Many new sellers see TCS deductions and assume it's a permanent cost. It's not. TCS is a prepayment of your income tax — the marketplace collects 1% on your behalf and deposits it with the government. You get full credit for this when filing your ITR.
Cash flow impact? Yes — you pay it monthly via marketplace deductions and recover it annually in your tax refund. Budget accordingly.
What margin do you actually need?
| Margin % | Verdict |
|---|---|
| < 5% | Danger zone — advertising, returns, and seasonality will wipe this out |
| 5–15% | Tight — sustainable only with volume and zero ad spend |
| 15–25% | Healthy — room for sponsored ads and some returns |
| > 25% | Excellent — room to grow, advertise, and weather returns |