Amazon India Rolls Out Rs 5 Marketplace Fee: What Does It Mean For Prime Members And E-commerce Shoppers?

E-commerce giant Amazon has introduced a flat Rs 5 marketplace or platform fee on all of its customer orders in India.

What Does It Mean For Prime Members?

This decision also includes the prime members of Amazon.

Additionally, the move is aligned with Amazon's competitors like Blinkit, Zepto, and Swiggy Instamart, as all the other e-commerce platforms have also added a similar fee in recent months.

Flipkart also rolled out a Rs 3 fee in mid-2024.

What Does This Move Mean For Amazon?

This move indicates Amazon's entry into a broader pricing strategy increasingly adopted across Indian e-commerce and quick commerce platforms, changing pilot surcharges into a standard price.

E-commerce platforms typically rely on small, pre-order charges to offset rising costs in delivery infrastructure, staff, as well as fuel.

Additionally, Amazon has only applied this fee in India, which means that it is responding to the country-specific challenges such as high volumes, low margins, and price-sensitive customers.

Platforms are also dependent on habit and urgency of the consumers to make the fee stick. Low or zero delivery fees attract new users by lowering the entry barrier.

What Are The Exclusions For This Fee?

At launch, marketplace fee will not apply on the following orders:

• Gift card purchases—physical or digital
• Orders made on Amazon Business (B2B), Bazaar, Amazon Now and Amazon Fresh
• Digital purchases or payments such as mobile recharges, bill payments, travel/movie ticket bookings, insurance payments, Alexa skills, Fire TV apps, Prime Video movies purchase/rent, subscriptions such as Prime, digital products fulfilled through email, ex: software, apple store codes etc.
• In addition, for Pay on Delivery (POD) orders or prepaid orders with any offer processing fee, or exchange fee, the marketplace fee will not be charged as a separate line item, until further notice, through updated TnCs. Marketplace fee may be charged in combination with any other fees, in whole or partially.

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