E-commerce players slash seller fees for low-ticket items amid margin pressure, volume push

With a rising share of online shoppers from Tier-2 and -3 cities, low-ticket stock keeping units (SKUs) have become critical for growth.
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In a bid to boost volumes and retain sellers amid intensifying price-led competition, major e-commerce platforms are revising their commission structures — offering significantly lower or even zero seller fees on low-ticket items.

The move comes as e-commerce marketplaces face margin pressure, especially in categories with high return rates and low average order values (AOVs). With a rising share of online shoppers from Tier-2 and -3 cities, low-ticket stock keeping units (SKUs) have become critical for growth. However, traditional commission rates — typically ranging from 10-16 per cent — have long disincentivised sellers from operating in these segments.

Lowering seller fees is emerging as a key strategy to drive frequency, increase assortment, and compete with platforms like Meesho, which has popularised the zero-commission model in India. For sellers, especially small businesses and manufacturers, these fee revisions improve viability, allowing them to price more competitively while maintaining margins.

‘Damage control’

While the moves are positioned as seller-friendly, the real motivation may be more defensive, said Madhav Kasturia, Founder and CEO of Zippee, a quick-commerce logistics platform.

“Sellers were leaving; low-AOV was becoming unviable, and Meesho was eating up that segment. This is damage control, not generosity,” he said.

Kasturia warned that removing commissions doesn’t fix the economics. “Unless the platform is monetising somewhere else — ads, embedded credit, or fulfilment fees — this move just adds to the burn,” he said.

Walmart-backed fashion e-tailer Myntra has rolled out a revised seller fee structure, slashing commission rates to as low as 0–1 per cent for products priced under ₹500 in categories like western wear, sports apparel and innerwear, according to two sellers with direct knowledge of the matter.

This marks a sharp departure from its previous flat 15–16 per cent commission, and is aimed at improving affordability and order volume on budget fashion categories.

“The new structure will encourage sellers to reduce the selling price of their products on the platform, thereby driving up sales. Ultimately, Myntra wants to be known for its various price points, especially for apparel,” said one of the sellers.

Price-sensitive orders

Earlier this year, Amazon India introduced zero referral fees — its version of seller commissions — on over 1.2 crore low-value products (under ₹300) across 135 categories including fashion, beauty, grocery, kitchenware, and home essentials. These changes, described as Amazon’s most aggressive fee revision yet, are set to take effect from April 7, 2025.

Referral fees on Amazon earlier ranged from 2 per cent to 14.5 per cent, depending on category. The new pricing is expected to improve seller participation in low-AOV categories where pricing sensitivity is highest.

This shift also marks a broader change in platform monetisation models, moving from transaction-based earnings to an ecosystem of paid services.

“The commission is dead for budget products. Now platforms say: no commission, but pay for ads, fulfilment, early payouts. Monetise everything except the transaction,” Kasturia explained.

India’s e-commerce battleground is also looking at value-first scalability, and the zero-commission war has just begun.

Published on July 1, 2025