11 July 2026
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6 min read
Most sellers calculate margin as selling price minus cost price, look at the gap, and decide a product is worth running. Then the payout lands and it’s far smaller than expected. The gap between those two numbers is Amazon.in’s fee stack — and it’s bigger and more layered than most people account for. Here is the real math, with an example you can copy for your own products.
On a typical Easy Ship / self-ship order, Amazon.in deducts, in order: a referral fee (a category-dependent percentage of the full selling price, commonly 5–17%), a closing fee (a flat amount per unit that varies by price band), a shipping / weight-handling fee (based on weight and distance, or your own courier cost if you self-ship), and then GST at 18% charged on the fees themselves — not on your product, on Amazon’s commission. That last one is the line item people forget entirely.
Say you sell a product for ₹699 that costs you ₹250 landed (product + inbound shipping to you). Naive margin looks like ₹449, or 64%. Now the real deductions on a 12% referral category:
Total deductions: about ₹232. Your payout is roughly ₹467. Subtract your ₹250 cost and the real profit is ₹217 — a 31% net margin, not 64%. And that is before ad spend. Run ads at a ₹120 cost per order and you’re at ₹97 profit, a 14% margin — still fine, but a completely different business than the 64% you started with.
The fee stack is heavier, in percentage terms, on low-ticket items, because the closing fee and shipping are close to fixed while your selling price is small. A ₹299 product can lose 40–50% to fees before you buy a single click. This is why experienced sellers gravitate toward higher average order values or bundles: the same ₹35 closing fee and ₹66 shipping hurt far less against a ₹1,200 order. When you evaluate a product, model the full stack including GST-on-commission and your payment mode split (COD vs prepaid change the gateway and RTO math), and compare net margin across products — never the naive gap.
For every product, write down: selling price, referral % for that exact category, closing fee for the price band, real shipping cost, 18% GST on the sum of those fees, and payment/RTO cost. What’s left after your product cost is your true margin. DropStop computes this per-platform (Amazon, Meesho, Flipkart, and your own website) so you can see where the same product is actually worth selling, but the point stands even if you do it by hand in a sheet — just make sure GST-on-commission is a row in that sheet.
