What selling on Amazon India costs you per order
Build the real per-order cost of an Amazon India sale, including the deductions the fee table leaves out, and see which products should stay off the platform.
The margin that disappears between the listing and the settlement
The sum looks fine on paper. The product costs you a certain amount to land and it sells for a good deal more and the gap is the margin. Then the fortnightly settlement arrives and the gap has closed. Nobody has stolen anything. Four or five separate deductions have each taken a slice and no single one of them looked large enough to worry about.
Selling on a marketplace is not a discount on your retail price. It is a stack of per-order charges that behave differently at different price points. The only number worth knowing is what lands in your bank account per order after every one of them.
What the fee table excludes
Amazon's published fee schedule excludes several real costs. It excludes GST at 18% charged on the fees themselves. It excludes the cost of a return journey and the loss on an item that comes back unsellable. It excludes advertising. It excludes your packaging and your labour at the packing bench. None of those appear in a fee calculator and together they often exceed the fees.
The fees themselves come in layers. A referral fee is a percentage of the selling price and it varies by category. A closing fee is a flat charge that steps up by price band. A shipping or weight handling fee depends on the fulfilment route you pick. Fulfilment by Amazon adds pick and pack and storage. Self-shipping replaces that with your own courier bill and your own serviceability gaps.
The platform also collects statutory amounts on your behalf. Tax is collected at source on your net sales under GST and an income tax deduction applies to payments made by e-commerce operators. Both are deposited against your registration and set off against your own liability rather than being lost. The rates have been revised so confirm the current ones. A qualified chartered accountant should check how both apply to your business.
Which products should stay off the platform
The platform suits a product with existing search demand and real margin per unit. Something a buyer already knows how to want and can judge from photographs and a specification table.
It does not suit a low-value item. A product selling at two hundred rupees carries a closing fee and a weight fee that barely move with price so they consume a share of a small ticket that they would never consume on a larger one. Bulky goods of low value are worse because the weight band decides the fee and the buyer decides the price. Leave it alone also if your return rate runs high and your item cannot be resold after a return. In footwear and apparel the return leg plus one ruined unit can wipe out the profit on several good orders. As a rough filter a product whose gross margin is under about a third of its selling price will usually not survive a marketplace. And a product that needs explaining or demonstrating is better sold where you control the conversation.
How to build the number yourself
Take one real product and one real month. Start with the selling price. Subtract the referral fee for its category and the closing fee for its price band and the weight handling fee for its despatch weight. Add 18% GST on that subtotal of fees. Subtract your landed product cost and your packaging. You now have a gross contribution per order.
Then divide the month's advertising spend by the month's orders and subtract that too. Then divide the month's return losses by the month's orders and subtract that. What remains is contribution per order and it is frequently a third of what the first calculation suggested. Repeat it per product rather than for the catalogue as a whole because the averages hide the loss makers. Working out which listings deserve price changes and which deserve delisting is the substance of marketplace optimisation and the scope and rate are published on the service page.
What to watch and what will mislead you
Contribution per order after every deduction is the figure that matters and it should be read per product. Reconcile it against the settlement report rather than the dashboard so that fee corrections and return adjustments land in the right month.
Gross sales and units ordered are the flattering numbers. Both rise when you cut price or raise ad spend and both can rise in a month where you lost money on every order. A seller can grow turnover for a year on a catalogue that never made a rupee.
The common mistake
Most sellers price from the product cost upward using the referral percentage alone. Returns get treated as a rounding error and advertising gets treated as a growth experiment rather than as a cost of being visible. That last assumption is the expensive one. On a contested keyword an unadvertised listing is largely invisible so the advertising is not optional and belongs in the per-order cost from the start.
The result is a catalogue priced a little too low across the board. Nothing dramatic happens. The business simply works hard for a year and funds the growth out of its own margin.
This guide explains how something works. It is not legal, tax or financial advice, and rules change. Confirm anything regulatory with a qualified professional before you act on it.