Operations

Understanding marketplace fees and commissions in India

The commission a marketplace quotes is rarely the full cost of selling there. Sellers who only look at the headline referral fee are often surprised when the payout lands. Here is how to see the real picture before you price a product.

The fees that stack up

• Referral / commission fee: a percentage of the sale price, and it varies a lot by category.
• Closing or fixed fee: a flat charge per order, often tiered by price band.
• Shipping / fulfilment fee: weight and distance based, or FBA fees if you use it.
• Storage fees: if you hold stock in the marketplace's warehouse.
• Advertising: not compulsory, but on competitive listings it is effectively part of the cost of visibility.
• Returns and RTO: the cost of the outbound and return leg on undelivered or returned orders.

Build a per-SKU margin sheet

For each product, subtract every one of those from your selling price, alongside your cost of goods. What remains is your true contribution margin — and it is often thinner than expected. Doing this per SKU tells you which products actually make money and which you are subsidising.

Why it matters for pricing and channel choice

Once you can see the real cost per channel, decisions get easier: which SKUs to push on which marketplace, where to run ads, and where your own store makes more sense. Our marketplace management service builds this view for every client, and a free audit will show you where margin is quietly leaking.