The four Amazon fees that decide whether your product is actually profitable
Most sellers model the referral fee and stop. There are three more deductions plus GST on all of them — and for an unregistered seller, that last one is pure cost.
A product sells for ₹999 on Amazon. It costs you ₹500. Many sellers see ₹499 and assume a comfortable margin. The settlement lands closer to ₹250, and after product cost the real profit is often under ₹100.
The four deductions
1. Referral fee
A percentage of the total selling price, set by category and often by price band within a category. It ranges from around 2% to over 20%. This is the fee everyone knows about.
2. Closing fee
A flat charge per order that varies by price band and fulfilment channel. Small on a high-value order, painful on a low-value one — which is why cheap products are so much harder to make work.
3. Shipping or weight handling fee
Charged by weight and distance zone. A heavy item shipped across the country can cost more to deliver than the referral fee takes.
4. FBA fees, if you use Fulfilment by Amazon
Pick and pack charges on top of storage. FBA buys you Prime eligibility and better conversion, but it is not free.
The fifth deduction people forget
Amazon charges 18% GST on its own fees. If your fees total ₹200, you actually pay ₹236.
Here is what matters: if you are GST registered, that ₹36 comes back as input tax credit, so it is not a real cost. If you are not registered, you absorb every rupee of it. For a thin-margin product, that difference alone can decide viability.
Returns cost more than the refund
Amazon refunds the referral fee on a returned order. It generally does not refund shipping and handling. The unit may come back damaged or unsellable. A 10% return rate in apparel is normal and it does far more damage to your annual profit than most sellers model.
Know your break-even listing price
Before you join a sale event or match a competitor, you need the price at which the order earns exactly nothing. Below it, every additional unit sold makes the loss larger — volume actively hurts you.
Check your rate card, not your memory
Referral percentages change, and they differ by category and price band. Pull the current figures from Seller Central rather than relying on what was true last year.
Run the numbers properly
The Amazon Seller Profit Calculator applies all four fees plus GST, handles registered and unregistered sellers differently, factors in your return rate, and gives you the break-even listing price to keep in front of you during a price war.