Most Indian sellers know Amazon charges fees. What most don't know is exactly how many there are, how they stack on top of each other, and what actually lands in their bank account after all of it. This guide breaks down every fee Amazon charges, with a complete worked example so you can build accurate margins before you list a single product.
The Six Types of Fees Amazon Charges
Amazon's fee structure isn't one charge - it's a stack of up to six separate deductions depending on how you fulfil and what you sell. Understanding each one individually is the only way to calculate your real margin.
The six fee types are: the referral fee, the closing fee, the weight handling fee (Easy Ship or FBA), the pick-and-pack fee (FBA only), the storage fee (FBA only), and GST on fees. You won't always pay all six - but you need to know when each applies.
The Referral Fee: Amazon's Commission
The referral fee is a percentage of the total selling price (including GST) that Amazon charges for every sale. It's the largest single fee on most orders. The rate varies by category - here are the most common ones for Indian sellers:
| Category | Referral Fee Rate | Fee on ₹999 Item | Minimum Fee |
|---|---|---|---|
| Home & Kitchen | 9% | ₹89.91 | ₹30 |
| Clothing & Accessories | 17% | ₹169.83 | ₹30 |
| Electronics | 8% | ₹79.92 | ₹30 |
| Books | 15% | ₹149.85 | ₹30 |
| Toys & Games | 9% | ₹89.91 | ₹30 |
| Sports & Fitness | 9% | ₹89.91 | ₹30 |
| Beauty & Personal Care | 15% | ₹149.85 | ₹30 |
| Grocery & Gourmet | 8% | ₹79.92 | ₹30 |
| Shoes & Handbags | 17% | ₹169.83 | ₹30 |
| Jewellery | 20% (up to ₹250 MRP) 5% (above ₹250 MRP) | Tiered | ₹30 |
The referral fee is calculated on the total order value including GST on the product - not just your base price. If your product has 18% GST, Amazon's referral fee is calculated on the GST-inclusive price. This inflates your effective commission rate compared to the percentage quoted.
The Closing Fee: The Flat Charge Nobody Talks About
The closing fee is a flat per-order charge that most sellers overlook because it isn't a percentage. It's deducted on every order, regardless of the selling price, and the amount depends on your product's price band and fulfilment method.
| Selling Price (MRP) | Easy Ship Closing Fee | Self-Ship Closing Fee | FBA Closing Fee |
|---|---|---|---|
| Up to ₹250 | ₹3 | ₹3 | ₹0 |
| ₹251 – ₹500 | ₹6 | ₹6 | ₹0 |
| ₹501 – ₹1,000 | ₹12 | ₹12 | ₹0 |
| ₹1,001 – ₹5,000 | ₹20 | ₹20 | ₹0 |
| Above ₹5,000 | ₹40 | ₹40 | ₹0 |
FBA sellers don't pay the closing fee - it's effectively absorbed into the FBA fee structure. For Easy Ship and Self-Ship sellers, this is a real deduction on every single order, and it hurts disproportionately on low-price products.
Weight Handling Fees: Easy Ship vs FBA
Weight handling is where Amazon charges for the logistics of getting your product to the customer. The structure differs significantly between Easy Ship and FBA, and getting it wrong is the single most common pricing error we see.
Easy Ship Weight Handling
Easy Ship fees are charged per shipment based on the dead weight or volumetric weight (whichever is higher) and the delivery zone (local, regional, or national).
| Weight Slab | Local Zone | Regional Zone | National Zone |
|---|---|---|---|
| Up to 500g | ₹32 | ₹41 | ₹55 |
| 501g – 1kg | ₹42 | ₹56 | ₹78 |
| 1kg – 2kg | ₹58 | ₹79 | ₹110 |
| 2kg – 3kg | ₹78 | ₹108 | ₹150 |
| Each additional 500g | +₹12 | +₹18 | +₹25 |
FBA Weight Handling
FBA fees work on size tiers (small, standard, oversize) and include both a weight handling component and a pick-and-pack fee. The advantage is a flat national rate - no zone surcharges.
| Size Tier | Weight | Pick & Pack Fee | Weight Handling (per 500g) |
|---|---|---|---|
| Small | Up to 250g | ₹17 | ₹14 |
| Standard | 251g – 1kg | ₹29 | ₹22 |
| Standard | 1kg – 5kg | ₹29 | ₹32 |
| Oversize | 5kg – 12kg | ₹59 | ₹42 |
| Heavy/Bulky | Above 12kg | ₹110 | ₹55 |
"We've audited dozens of accounts where sellers were self-shipping products under 500g nationally and paying ₹55 in Easy Ship fees - when FBA would have cost ₹31 all-in and given them Prime eligibility. The margin math almost always favours FBA for lightweight, fast-moving products."
FBA Storage Fees: The Hidden Cost of Slow-Moving Stock
FBA sellers pay a monthly storage fee based on the cubic space their inventory occupies in Amazon's fulfilment centres. The rate increases significantly for inventory that sits beyond 180 days.
| Storage Duration | Jan – Sep Rate | Oct – Dec Rate (Peak) |
|---|---|---|
| Up to 180 days | ₹19 per cubic foot/month | ₹24 per cubic foot/month |
| 181 – 365 days | ₹38 per cubic foot/month | ₹50 per cubic foot/month |
| Beyond 365 days (Long-term) | ₹150 per cubic foot/month - charged in February and August | |
Long-term storage fees are charged on units that have been in an Amazon fulfilment centre for more than 365 days. We've seen sellers sitting on ₹40,000 worth of slow-moving inventory accumulate ₹50,000+ in long-term storage fees over two years. Run a removal order for anything that's been in FBA for more than 9 months and isn't moving.
GST on Amazon Fees: The 18% Nobody Forgets, But Most Miscalculate
Amazon charges 18% GST on all its fees - referral, closing, weight handling, pick-and-pack, and storage. This is payable by you as the seller, and it's calculated on the pre-GST fee amount.
If you're GST-registered, you can claim this as input tax credit. If you're selling under composition scheme or are not GST-registered (only possible for products exempt from GST), you cannot claim it back - it becomes a hard cost. Always factor the 18% into your margin calculations, even if you plan to claim ITC.
Worked Example: A ₹999 Home Décor Item via Easy Ship
Let's put all of this together. A bamboo desk organiser, listed at ₹999, sold to a customer in a different state (regional zone), weighing 600g packed.
| Fee Component | Calculation | Amount |
|---|---|---|
| Selling Price | - | ₹999.00 |
| Referral Fee (Home & Kitchen, 9%) | 9% × ₹999 | −₹89.91 |
| Closing Fee (₹501–₹1,000 band) | Flat rate | −₹12.00 |
| Easy Ship Weight Handling (600g, Regional) | 501g–1kg, Regional | −₹56.00 |
| Subtotal Fees (pre-GST) | ₹89.91 + ₹12 + ₹56 | ₹157.91 |
| GST on Fees (18%) | 18% × ₹157.91 | −₹28.42 |
| TCS (Tax Collected at Source, 1%) | 1% × ₹999 | −₹9.99 |
| Net Payout to Seller | ₹999 − all deductions | ₹802.68 |
The Same Product via FBA
Now let's run the same product through FBA to see the comparison. The 600g product falls in the Standard FBA tier.
| Fee Component | Amount |
|---|---|
| Referral Fee (9%) | −₹89.91 |
| Closing Fee | ₹0 (FBA waived) |
| FBA Pick & Pack (Standard) | −₹29.00 |
| FBA Weight Handling (600g Standard) | −₹22.00 |
| GST on Fees (18%) | −₹25.37 |
| TCS (1%) | −₹9.99 |
| Net FBA Payout | ₹823.73 |
TCS, TDS, and Your Tax Reconciliation
Two more deductions appear in your Amazon payout statement that aren't "fees" in the traditional sense, but affect your net receipts:
- TCS (Tax Collected at Source): Amazon deducts 1% TCS on the net taxable sale value (selling price minus returns). This is deposited with the government on your behalf and appears in your Form 26AS - you can claim it as a credit when filing your income tax return.
- TDS (Tax Deducted at Source): Applicable only if your annual sales on Amazon exceed ₹50 lakh in a financial year. Amazon deducts 1% TDS in that case. Again, claimable as credit at filing.
Neither TCS nor TDS is a permanent cost - they're advance tax payments on your behalf. But they do affect your monthly cash flow, and many small sellers mistake them for fees they've lost permanently.
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