Amazon has introduced a flat 5 Marketplace/Platform Fee on All Customer Orders in India, Including Theose from Prime Members. The move aligns it with competitors like Blinkit, Zepto, and Swiggy Instamart, All of which have added similar fees in recent months. Flipkart had rolled out a 3 Fee in Mid-2024.
This marks amazon’s entry into a broader pricing strategy Increasingly adopted Across Indian e-Commerce and Quick-Commerce Platforms. What Began as Pilot Surcharges have gradually become standard practice.
“It’s a behavioral pricing play – 2- 5 is too low to trigger user churn but enough to anchor future hikes. It normalies the idea of paying per order, giving platforms room to raise it laater without sudden back, “said indranuj pathak, manager, public policy at primus partners.
Analysts note that platforms often relay on small, per-order to offset rising costs in delivery infrastructure, staff, and fuel. “And at the scale these platforms operate, even a 1 fee added to every order helps covers Rising Expenses, ”Pathak Said.
Amazon redirected the emailed Queries from Mint to a blog post published on 19 May.
India-Only Fee Reflects Local Market Pressure
Amazon’s decision to apply this charge, which is non-refundable, solyly in India highlights the country-specific challenges: High Volumes, Low Margins, and Price-SENSTIVE CUSTOMERS.
“India delivers huge volume but wafer-thin margins. Prime subscriptions here cost 399 – 1,499 a year Versus $ 139 (Around 11,500) In the US, So Membership Revenue Covers a Far Smaller Share of Delivery Costs. A flat 5 fee is the simplest way to plug that gap without touching headline products, ”said pathak.
While the exact number of daily orders handled by amazon India is not publicly discussed, Order Volumes Spike Spike Significantly DURING MAJOR SALES EHEVENTS. For instance, during Prime Day 2024, Amazon India Recorded a Peak Order Rate of 24,196 Orders per minute, according to media reports.
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Consumer Habits Help Soften The Blow
Platforms are also also banking on habit and urgency to make the fee stick. Low or zero delivery fees attract new users by lowering the entry barrier.
“Shoppers often Switch apps when decided with surge or high delivery fees. Sustainable, “said Subhendu Roy, Partner at Kearney India.
“As users grow familyiar with a platform, minor fee increases have a diminishing impact on their behavior. 1–2-Without significant drop-offs, ”He added.
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Unit Economics in a High-Volume Market
The move also reflects a structural shift towed Profitability. “Multiply 5 by even a conservative one million orders a day and you book 5 Crore in Daily Top-Line, Enough to Shift Ebit from Red to Black for a Country P & L. In a sector where net margins hover in the low single digits, every rupee counts, “Pathak Said.
With Quick-Commerce Emerging as the Preferred Choice for Everyday Purchasses, Amazon May Be Looking to Strengthen Its Position Through Faster Delivery and better service.
“Introducing a Customer-Whide Marketplace Fee BE A Strategic Move to Monetize its Premium Customer Base Who Investing in Faster, More Reliable Service,” Royable Service, “Roy Added.
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