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Selling on Amazon and Flipkart: A Complete Guide for Indian Sellers

01The short answer Selling on Amazon and Flipkart Is Easy to Start and Hard to Do Profitably Amazon and Flipkart

Brand Chanakya Digital Marketing Services
⏱ 8 min read

TABLE OF CONTENTS

    Selling on Amazon and Flipkart guide for Indian brands and manufacturers
    01The short answer

    Selling on Amazon and Flipkart Is Easy to Start and Hard to Do Profitably

    Amazon and Flipkart can give an Indian manufacturer or brand national reach within weeks. Whether that reach makes money depends on product economics, operations and advertising discipline, not on getting listed.

    Most sellers who struggle on marketplaces did not fail at onboarding. They listed products whose price could not carry fees, freight, returns and advertising; they ran ads judged only by platform ROAS; they ran out of stock on their best SKUs while slow ones aged in a warehouse; or they did not reconcile settlements and never noticed money going missing. This guide is about avoiding those outcomes.

    It is written for manufacturers, retailers, brand owners and existing sellers planning for 2027. It first helps you decide whether marketplaces fit your economics, then covers the operating system: readiness, platform choice, listings, fulfilment, inventory, pricing, returns, settlements, advertising, account health, SKU decisions and a 12-month plan. For a step-by-step registration walkthrough, see our guide to selling on Amazon India and Flipkart seller registration guide.

    Key takeaways

    • ✓Zero referral or zero commission does not mean zero cost. Closing or fixed fees, shipping, collection, returns, packaging and advertising still apply, and GST applies to platform fees.
    • ✓Judge every SKU on contribution margin after advertising, not on revenue or platform-reported ROAS.
    • ✓Keep management fees, ad spend, platform charges and taxes in separate lines. TCS and TDS deducted by marketplaces are generally credits you can claim, which affect cash flow rather than being permanent costs; confirm with your accountant.
    • ✓Stockouts on winners and ageing stock on losers destroy more profit than most ad mistakes. Plan inventory by SKU.
    • ✓Revenue can grow while profit falls. Track TACOS and contribution margin monthly as you scale.
    • ✓Use a stop/fix/scale rule for each SKU so decisions are based on evidence rather than hope.
    02Planning context

    What Changed Recently, and What It Means for 2027

    We are writing in November 2026. Fee structures have moved a lot in the last 18 months, which makes old profit calculations unreliable.

    Referral and commission cuts for lower-priced products

    Amazon India announced in March 2026 that it was extending zero referral fees to more than 12.5 crore products priced under ₹1,000 across 1,800+ categories from 16 March 2026, alongside Easy Ship fee reductions for products under ₹300 (About Amazon India, March 2026). The announcement did not remove other fees, and eligibility depends on category and price. Flipkart was widely reported to have introduced zero commission for eligible products under ₹1,000 in late 2025 and, in July 2026, to have extended zero commission to fashion products at all price points (Outlook Business, July 2026). Confirm the current rate card for your category in Seller Hub before relying on these reports.

    Other fees can move the other way

    Fee schedules change in both directions. Sellers and third-party trackers have reported closing-fee changes on Amazon India during 2026; whatever the latest change is, the practical lesson is the same: rebuild your unit economics from the live fee schedule in Seller Central or Seller Hub at least every quarter, and whenever a platform announces changes.

    Tax deductions are smaller, and still affect cash

    The GST tax collected at source (TCS) that e-commerce operators deduct under Section 52 of the CGST Act was reduced to 0.5% of net taxable supplies from 10 July 2024 (CBIC Notification No. 15/2024-Central Tax; see GST Council FAQs on TCS for how the mechanism works). Income tax deducted at source by e-commerce operators fell to 0.1% from 1 October 2024 under the former Section 194-O; from 1 April 2026 the Income Tax Act, 2025 is in force, and practitioners map this deduction to its new TDS provisions (Income Tax Department). Both are explained in Section 12.

    Data protection for customer information

    If you contact marketplace customers outside the platform, use only what the platform permits and plan for India’s Digital Personal Data Protection Rules, whose main obligations are scheduled to apply from 13 May 2027. Marketplaces also restrict how sellers may use buyer data; follow their policies first.

    ₹1,000

    price band under which Amazon extended zero referral fees from 16 Mar 2026 (eligible categories)

    0.5%

    GST TCS rate on net taxable supplies via e-commerce operators since 10 Jul 2024

    0.1%

    e-commerce TDS rate since 1 Oct 2024 (claimable in your income tax return)

    03Fit check

    Is Selling on Amazon and Flipkart Right for Your Business?

    Marketplaces suit products that buyers search for, that ship economically, and whose margins can absorb fees, returns and advertising.

    Before listing, run a simple fit test. If most answers below are “no”, marketplaces may still be useful for visibility, but expect them to need more capital and time, or to work only for part of your range.

    Question Good sign Warning sign
    Do people search for this product on marketplaces? Clear search demand and competing listings with reviews Buyers need explanation or demonstration before buying
    Can the price carry costs? Gross margin leaves room for fees, freight, returns and ads Low price, heavy or fragile item, thin margin
    How do returns behave? Low return risk; clear sizing or specifications High return categories (fit, colour) without strong size guidance
    Can you supply consistently? Stable production, reliable packaging, predictable lead times Seasonal or irregular supply; frequent stockouts
    Do you control the brand? Registered trademark or application; you own the listing content Reselling others’ brands without authorisation
    Do you have working capital? Can fund inventory, ads and settlement delays for several months Need marketplace sales to fund next month’s production

    Table 1. Marketplace fit test.

    When marketplaces are a poor fit, at least for now

    Very low-price items where shipping is a large share of price, bulky goods with high damage risk, products needing installation or expert advice, and categories you cannot legally sell without licences you do not yet hold. In these cases, consider B2B channels, distributors, quick commerce for specific SKUs, your own website, or bundles that raise the order value. Our Amazon vs Flipkart vs quick commerce and Meesho vs Flipkart vs Amazon comparisons can help.

    A quick price-ceiling test (hypothetical)

    Before anything else, check whether the market price leaves room. Look up the price range of comparable listings with good ratings, take a realistic selling price, and remove GST. From that net figure subtract your landed cost, packaging, an estimate of platform fees and shipping from the live rate card, a return allowance and an advertising allowance. If the remainder is close to zero, or negative, the product is not marketplace-ready in its current form. You might change the pack size, specification or bundle, or use marketplaces only for visibility while selling profitably elsewhere. This ten-minute test prevents many expensive launches.

    04Readiness

    Readiness, Documentation, Category Eligibility, Brand Ownership and Onboarding

    Onboarding itself is quick. Being ready to operate is what takes preparation.

    Area What to prepare Why it matters
    Business and tax GSTIN, PAN, bank account in the business name, registered address, pickup or warehouse address Required for registration and settlements; mismatches delay payouts
    Category approvals Check whether your category is gated or needs documents (e.g. FSSAI for food, licences for certain health or regulated products, BIS where mandatory) Listing in restricted categories without approval can lead to removal
    Brand ownership Trademark registration or application; brand approval on each platform Unlocks brand tools such as enhanced content and brand ads, and helps protect listings
    Product compliance Labelling with legal metrology details, country of origin, MRP, manufacturer details; safety certifications where required Marketplaces and consumer law require accurate disclosures
    Content Product titles, attributes, images, size charts, specifications, videos Determines discoverability and conversion
    Operations Packaging spec, dispatch process, returns inspection, stock counts Drives account health and damage/return costs
    Finance SKU-level costing, fee model, settlement reconciliation process Prevents unprofitable listings and missed money

    Table 2. Readiness checklist. Requirements vary by category and change over time; confirm in Seller Central and Seller Hub.

    On Amazon, brand tools such as A+ content, Brand Stores and Sponsored Brands are generally linked to enrolment in Amazon Brand Registry, which requires a registered or applied-for trademark (Amazon Brand Services India). Flipkart has its own brand approval process. Check current eligibility before you promise yourself or a client access to these tools.

    Useful pointer

    Do your SKU costing before onboarding, not after the first settlement. Many sellers discover only after a month that a hero product loses money on every order.

    Onboarding sequence

    Step 1

    Prepare documents

    GSTIN, PAN, bank details, address proofs, trademark and category documents ready before you start.

    Step 2

    Register and verify

    Create the seller account, complete tax and bank verification, set pickup and return addresses.

    Step 3

    Brand and category approvals

    Apply for brand registration/approval and any gated categories.

    Step 4

    Catalogue

    Create or match listings; complete attributes, images and compliance fields.

    Step 5

    Go live with a pilot

    Activate a focused set of SKUs, test dispatch and returns, then expand.

    Diagram A. Typical onboarding sequence for Amazon or Flipkart. Exact steps and documents vary by platform and category.

    Category notes worth checking early

    Some categories need documents or certifications before you can list or before goods can legally be sold. Food products need FSSAI licensing and compliant labels. Many electrical goods, toys and certain other products fall under compulsory BIS certification orders. Cosmetics and Ayurvedic products have their own licensing rules, and some health and wellness claims are restricted. Platforms enforce these through category gating and listing checks, but the legal responsibility remains yours. If your product sits near a regulated category, confirm requirements with the relevant authority or a compliance adviser before you produce marketplace stock.

    05Platform choice

    Amazon vs Flipkart: Category Fit, Operating Requirements and Economics

    Both platforms are large and both can work. The better first choice depends on your category, price point, customer base and operational capacity.

    Factor Amazon India Flipkart How to decide
    Category strengths Broad across categories; strong in electronics, home, books, everyday essentials and brand-led categories Broad, with long-standing strength in electronics, fashion and value-focused categories Search both for your exact product: count listings, reviews and price ranges
    Brand tools Brand Registry unlocks A+ content, Brand Store, Sponsored Brands and analytics (eligibility applies) Brand approval and brand-level ad options in Flipkart Ads Check which tools you can actually access in your category
    Fulfilment options FBA, Easy Ship, Self Ship, Seller Flex Flipkart fulfilment (FBF), Smart Fulfilment and non-FBF/self-ship options Compare total cost per order including storage and returns
    Fee model Referral (with zero bands for eligible lower-price products), closing, weight handling/shipping, FBA fees, storage Commission (zero for eligible bands/categories), fixed fee, collection fee, shipping, reverse shipping Model each SKU on each platform from the live rate card
    Advertising Sponsored Products, Sponsored Brands, Sponsored Display Flipkart Ads product and brand formats Start with product-level search ads on both
    Operational strictness Account health metrics and policy enforcement Seller performance metrics, penalties for dispatch and cancellation failures Be ready to meet dispatch SLAs before scaling

    Table 3. Amazon vs Flipkart at a planning level. Features and rates change; verify current details on each seller portal.

    Many sellers start on one platform, get operations stable, then add the second. Others list on both from the start to compare demand. If you choose both, keep separate SKU-level P&Ls; a product can be profitable on one and unprofitable on the other because of different fees, return behaviour and ad costs. For more detail see Amazon vs Flipkart: which is best and where should you sell first.

    06Listings

    Listing Structure, Attributes, Images, Videos, A+ Content and Brand Stores

    A marketplace listing has two jobs: get found for the right searches and persuade the shopper who clicks.

    Structure that serves both jobs

    Title

    Brand, product type, key specification, size or quantity, and the main differentiator. Follow each category’s title rules; stuffing keywords can get listings suppressed.

    Attributes

    Fill every relevant attribute (material, size, colour, pack count, compatibility). Filters and search rely on them more than on description text.

    Images

    Main image on the required background; then scale, use, close-up of material, what’s in the box, and an infographic answering the top buyer questions.

    Bullets and description

    Benefits supported by specifications. Answer objections: size, compatibility, care, warranty.

    Video

    Short demonstration where the platform allows it: unboxing, use, size comparison.

    Variations

    Group sizes and colours correctly so reviews and rankings consolidate.

    Enhanced brand content

    A+ content (Amazon) and enhanced brand content options on Flipkart let brand owners add comparison charts, richer images and brand story modules. They tend to help most on considered purchases where shoppers compare options. Brand Stores give you a branded destination for ads and external links. Treat both as conversion tools: measure conversion rate before and after, not just whether they look attractive. See Amazon A+ content and Amazon Brand Store for detail.

    Common beliefBetter images will fix low sales.
    What usually happensImages help conversion, but a listing with no search visibility, an uncompetitive price or weak reviews will still struggle. Diagnose traffic, conversion and price separately.

    A worked listing example (hypothetical)

    Consider a fictional brand selling a stainless steel lunch box. A weak title might read “Best Lunch Box Steel Tiffin Leak Proof Office School Kids Men Women Hot”. It repeats generic words, mixes audiences and says nothing specific. A stronger version follows a simple pattern — Brand + product type + key specification + capacity/count + main differentiator — for example: “[Brand] Stainless Steel Lunch Box, 3 Containers, 900 ml Total, Leak-Resistant Lids, Insulated Bag Included”. The bullets then explain each claim: steel grade, which lids are leak-resistant and under what conditions, how to clean, what is in the box, and warranty. The image stack shows the open box with food for scale, each container with its capacity, the lid seal close-up, the bag, and a dimension diagram. Every claim in the listing must be true and provable; overstating features raises return rates and can trigger complaints.

    Image slot Purpose Common mistake
    1. Main image Win the click on the results page Cluttered props, text overlays where not allowed, wrong pack shown
    2. Scale / in use Show real size No reference object, so buyers misjudge size
    3. Key features Visualise the top 3 benefits Too much text in small fonts
    4. Specification / dimensions Answer technical questions Missing units or inconsistent with listing text
    5. What’s in the box Prevent ‘missing item’ returns Showing accessories that are not included
    6. Comparison or variant guide Help choose the right size/variant Comparing against named competitors

    Table A. A practical image stack. Follow each platform’s image policy for the main image.

    07Search and conversion

    Marketplace Search Visibility and Conversion Fundamentals

    Marketplace search engines want to show products shoppers will buy. Relevance gets you considered; sales performance keeps you visible.

    Neither Amazon nor Flipkart publishes its ranking formula. What sellers can control is well understood: relevance (title, attributes, backend search terms where available, correct category), availability (in stock, fast delivery promise), price competitiveness, conversion signals (reviews, ratings, content quality) and account performance.

    Lever What to check Typical fix
    Relevance Are you indexed for your main search terms? Is the category correct? Rewrite title and attributes; correct browse node or category
    Availability and delivery Stock levels, delivery promise vs competitors Replenish earlier; consider platform fulfilment for faster promises
    Price Your price vs similar listings with similar ratings Adjust price or pack size; bundle to change comparison
    Click-through Main image and title vs competitors on the results page Clearer main image; show pack size or key benefit
    Conversion Sessions vs orders in business reports Improve images, answer objections, fix size guidance, gather legitimate reviews
    Buy Box / featured offer Whether you win the featured offer on your own listing Fix price parity, stock, fulfilment speed and account metrics

    Table 4. Search and conversion levers.

    Track sessions, unit session percentage (conversion), and orders by SKU every week. If sessions are low, work on relevance and ads. If sessions are healthy but conversion is low, work on price, content and reviews. Mixing the two diagnoses wastes money.

    08Fulfilment

    Fulfilment Choices: FBA, Easy Ship, Self Ship, Seller Flex, FBF and Smart Fulfilment

    Fulfilment is a profit decision, not just a logistics one. It affects delivery speed, conversion, fees, returns and how much cash sits in inventory.

    Option Who stores and ships Strengths Watch-outs Best for
    Amazon FBA (Fulfilled by Amazon) Amazon warehouses store, pack, ship and handle many returns Faster delivery promises, Prime eligibility, less daily dispatch work Storage and fulfilment fees, inbound planning, long-term storage costs, less control over damaged returns Steady-selling SKUs with predictable demand
    Amazon Easy Ship You store and pack; Amazon’s logistics picks up and delivers Lower inventory commitment; Amazon handles delivery Dispatch deadlines; pickup reliability; your packaging quality matters Sellers with good in-house dispatch
    Amazon Self Ship You store, pack and ship through your own courier Full control; useful for bulky or special items Account health exposure to courier performance; tracking discipline Specialised or heavy products
    Amazon Seller Flex Your warehouse operated with Amazon’s systems Fulfilment speed from your own facility Eligibility and volume requirements Larger sellers with warehouse capacity
    Flipkart FBF (Fulfilled by Flipkart) Flipkart warehouses Faster delivery, assured badges, less dispatch work Storage and fulfilment fees; inventory placement Fast-moving SKUs
    Flipkart Smart Fulfilment You store; Flipkart-assisted packaging and logistics standards Middle ground between FBF and self-ship Programme rules and eligibility Sellers improving delivery speed without moving stock
    Flipkart non-FBF / self-ship You store and dispatch; Flipkart logistics usually delivers Control and lower inventory commitment Dispatch SLA penalties; packaging responsibility Sellers with reliable daily dispatch

    Table 5. Fulfilment options. Programme names, rules and fees change; confirm current terms on each seller portal.

    Compare options on total cost per delivered order: fulfilment or shipping fee, storage, packaging, labour, damage and loss, return handling, plus the effect on conversion. A platform warehouse may cost more per unit but sell more units because of faster delivery badges. Run a test on a few SKUs before moving your whole range. Our FBA vs FBM guide for Amazon India goes deeper on Amazon’s options.

    Useful pointer

    Sending stock to a platform warehouse moves cash out of your hands earlier. Include the inventory holding period in your cash planning, not just the fee per unit.

    Comparing total cost per delivered order (hypothetical)

    Imagine one SKU tested for a month under two methods. Under platform fulfilment, fees per order are higher and stock must be sent in advance, but faster delivery promises lift conversion from 8% to 10% of sessions. Under self-dispatch, fees are lower, but you pay for packing labour, local storage and some damage in transit, and conversion stays at 8%. If contribution per order is ₹40 lower under platform fulfilment but you sell 25% more orders from the same sessions and ad spend, total contribution may still be higher. Run the comparison on contribution in rupees per month, not on fee per order alone, and include the cash tied up in inventory sent to the platform.

    09Inventory

    Storage, Replenishment and Stockout Prevention

    Running out of stock on a winning SKU loses sales, ad momentum and often search position. Overstocking a slow SKU ties up cash and builds storage fees.

    A simple reorder rule

    Reorder point = average daily units sold × (supplier or production lead time + transit and inbound time) + safety stock. Safety stock covers uncertainty; a practical start is several days of sales, increased for SKUs with volatile demand or unreliable supply.

    Input Hypothetical value Calculation
    Average daily sales 12 units From the last 30–60 days, excluding sale-event spikes
    Production lead time 15 days Your factory or supplier
    Transit + warehouse receiving 7 days Dispatch to platform warehouse until available to sell
    Safety stock 8 days × 12 = 96 units Judgement based on variability
    Reorder point 12 × (15 + 7) + 96 = 360 units Place the next production order when stock reaches this level

    Table 6. Hypothetical reorder-point calculation.

    Weekly inventory routine

    • ✓Check days of cover (stock ÷ average daily sales) for every active SKU, by fulfilment location.
    • ✓Flag SKUs under your reorder point and those with more than your maximum days of cover.
    • ✓Plan inbound shipments around sale events, allowing for slower warehouse receiving at peak times.
    • ✓Check stranded, unfulfillable or reserved inventory and resolve it before it ages.
    • ✓Review ageing stock monthly and decide: promote, bundle, move to another channel, remove or liquidate.

    Planning stock for a sale event (hypothetical)

    Suppose a SKU sells 12 units a day normally and, in last year’s major sale, sold about three times its normal rate for five days. Expected event demand is roughly 12 × 3 × 5 = 180 units, plus normal demand for the inbound lead time before and after. If the platform warehouse typically takes longer to receive stock before big events, send inventory earlier than your usual cycle. After the event, demand often dips for a while; plan the post-event reorder from post-event sales, not from the peak, to avoid building ageing stock.

    Useful pointer

    Keep a separate column in your worksheet for ‘event uplift’ by SKU from previous years. It is one of the most useful inputs for next year’s stock plan and is lost if nobody records it.

    10Pricing

    Product Pricing and Discounts

    Marketplace pricing has to cover more costs than most sellers expect, and discounts reduce margin faster than they increase volume.

    Build price from the bottom: landed product cost, packaging, platform fees at that price band, shipping, expected return cost, target advertising cost per unit, and the contribution margin you need. Then compare with the market. If the market price cannot carry your costs, change the pack size, bundle, product specification or channel rather than hoping volume will fix it.

    Price bands matter

    Because fee structures now vary sharply by price band (for example, zero referral or commission below a threshold on eligible products), a small price change can move a SKU into a different fee band. Model prices just above and below each threshold. A ₹999 price and a ₹1,049 price can produce very different contributions.

    Discounts and deals

    • ✓Calculate the contribution per unit at the deal price before you opt in, including any deal fee.
    • ✓Estimate how many extra units the deal must sell just to earn the same contribution as at full price.
    • ✓Watch for post-deal effects: a lower reference price can make full price look expensive afterwards.
    • ✓Do not fund deals from margin you need for advertising, returns and overheads.

    Be honest in how discounts are presented. India’s Guidelines for Prevention and Regulation of Dark Patterns, 2023 identify practices such as false urgency and drip pricing as misleading (summary of the 2023 guidelines). Show real reference prices, real stock limits and the full price upfront. See also our Flipkart Lightning Deals guide.

    Testing prices around a fee threshold (hypothetical)

    Price (incl. GST) Fee band assumption What to compare
    ₹949 Below a zero-referral threshold (if eligible) Contribution per unit and conversion rate
    ₹999 Just below the threshold Same, plus whether the round price converts better
    ₹1,049 Just above; referral fee applies Does the extra ₹50 cover the new fee and keep conversion?

    Table F. Model contribution at each candidate price using the live rate card for your category; eligibility for zero-fee bands is category-specific.

    Run price changes long enough to see a stable conversion rate, and avoid changing price and ads at the same time, or you will not know which change caused the result.

    11Returns and settlements

    Returns, Damaged Stock, Disputes and Settlement Reconciliation

    Returns and settlement errors are where marketplace profit quietly leaks away. Sellers who reconcile carefully often recover money others write off.

    Returns and damaged stock

    Every return has a cost even when the product comes back sellable: reverse shipping, inspection, repackaging, and sometimes a fee. Damaged, used or wrong items returned by customers, and items damaged in a platform warehouse, may be eligible for claims or reimbursement under each platform’s policy, within strict time limits and with evidence. Set up a returns inspection process: photograph unboxing of returns, record the condition, and file claims promptly.

    • ✓Track return rate by SKU and return reason every month.
    • ✓Fix the cause: size charts, misleading images, packaging damage, quality issues, wrong variant shipped.
    • ✓Record unsellable returns separately and include their cost in SKU economics.
    • ✓Use the platform’s claim process for eligible lost or damaged items, within its deadlines.
    • ✓Review open disputes and claims weekly until resolved.

    Settlement reconciliation checklist

    A settlement report lists the orders, refunds, fees, taxes and adjustments behind each payout. Reconciliation means checking that what you received matches what you should have received.

    • ✓Match every shipped order in your system to an order line in the settlement report.
    • ✓Check fees per order against the current rate card for that SKU’s category, price band, weight and fulfilment method.
    • ✓Check weight and dimension charges; an incorrect recorded weight can overcharge every order.
    • ✓Match every refund to a returned item received back, or to an approved exception.
    • ✓Track reimbursements for lost or damaged inventory and customer-return issues.
    • ✓Record TCS and TDS deducted on each settlement and match them later to the GST and income tax portals.
    • ✓List unexplained differences, raise cases with seller support, and track them to closure.
    • ✓Reconcile total payouts with bank receipts every month.

    Troubleshooting settlement differences

    What you see Possible cause What to check
    Fees higher than expected on every order Recorded weight or dimensions higher than actual; wrong fee band Product dimensions in the catalogue; weight-handling charges per order
    Refund issued but item not received back Return in transit, lost in transit, or customer kept item Return tracking; platform’s return/claim rules and deadlines
    Item received back damaged or different Customer misuse, transit damage, wrong item returned Unboxing photos/video; file a claim within the allowed window
    Inventory count lower than records (platform warehouse) Lost or damaged in warehouse, receiving discrepancy Inventory reconciliation reports; reimbursement status
    Payout lower than order total Fees, TCS/TDS, refunds, reserve or adjustments Line-item settlement report; reserves or holds noted on the account
    Promotion or deal costs unexpected Deal fee or coupon cost charged Promotion settings and terms accepted

    Table B. Common settlement differences and checks. Claim windows and policies vary; read the current policy before relying on reimbursement.

    12Costs and taxes

    Separating Management Fees, Advertising Spend, Platform Charges and Taxes

    Mixing all marketplace deductions into one “commission” number hides what is actually happening. Keep four buckets separate.

    Bucket Examples How to treat it
    Platform charges Referral or commission, closing or fixed fee, shipping or weight handling, collection fee, fulfilment and storage fees, return fees Variable cost per order or per unit; GST is charged on these fees and registered sellers can usually claim it as input tax credit
    Advertising spend Sponsored Products, brand ads, display, deal or promotion fees where applicable Variable marketing cost; track separately by campaign and SKU
    Management fees Agency retainer, freelancer fees, software tools, in-house team cost Fixed or semi-fixed overhead; allocate across SKUs for net profit
    Taxes deducted or collected GST TCS (0.5% of net taxable supplies), income tax TDS (0.1% of gross amount) Generally credits against your tax liabilities, not permanent expenses; they affect cash flow timing

    Table 7. The four cost buckets. Confirm tax treatment for your business with your chartered accountant.

    Why TCS and TDS are not permanent costs (in normal circumstances)

    When a marketplace collects GST TCS, the amount is reported in its GSTR-8 return and, once you accept it on the GST portal, it is credited to your electronic cash ledger, where it can be used to pay GST liabilities. E-commerce TDS appears against your PAN in Form 26AS / AIS and is claimed as a credit when you file your income tax return. Neither is an expense in the way a referral fee is. They do, however, reduce cash received now, and the credit is available only if the operator deposits and reports it correctly and your details match.

    Item (hypothetical month) Amount Note
    Net taxable value of sales through the marketplace ₹10,00,000 After returns
    GST TCS at 0.5% ₹5,000 Credited to electronic cash ledger after acceptance
    Gross amount for TDS (illustrative) ₹11,80,000 Including GST, per the operator’s computation
    TDS at 0.1% ₹1,180 Claimable in the income tax return
    Cash held back this month ₹6,180 A timing effect, not a profit loss, if credits are claimed

    Table 8. Hypothetical illustration of TCS and TDS. Rates current as of November 2026; verify base amounts and treatment with your accountant.

    Accounting note

    Ask your accountant to book TCS and TDS to receivable or tax-credit accounts rather than to expenses, and to reconcile them quarterly with the GST portal and Form 26AS/AIS. Unreconciled credits are a common source of real losses.

    GST on marketplace fees

    Marketplaces charge GST (currently 18%) on their fees and invoice it to you. If you are GST-registered and the invoice carries your GSTIN, this GST is usually available as input tax credit, so it should not be counted as a cost in your unit economics. Build SKU models with fees excluding GST, and check monthly that fee invoices appear correctly in your GST records. If you are not able to claim input tax credit for some reason, include the GST on fees as a cost instead. The same logic applies to GST on advertising and agency fees.

    Output GST on your sales is not your revenue either. That is why the unit economics in the next section start from net revenue excluding GST. Many sellers overstate margins by comparing GST-inclusive selling prices with GST-exclusive costs.

    13Unit economics

    Unit Economics: Three Hypothetical Price and Margin Profiles

    Unit economics answer one question: after everything a sale costs, what does each unit contribute towards your overheads and profit?

    The three profiles below are invented to show the method. They deliberately use different price points, return rates and advertising intensity. The fee lines are placeholders, not current platform rates; always rebuild them from your own category, price band, weight and fulfilment method in the live rate card.

    Line (per unit) Formula A: Low-price household item B: Mid-price kitchen product C: Premium personal-care set
    Selling price (incl. 18% GST) Given ₹499 ₹1,499 ₹3,999
    Net revenue (ex-GST) Price ÷ 1.18 ₹423 ₹1,270 ₹3,389
    Landed product cost Given ₹150 ₹520 ₹1,400
    Packaging Given ₹15 ₹25 ₹60
    Referral / commission (illustrative %) Net revenue × assumed % ₹0 (0%) ₹127 (10%) ₹407 (12%)
    Closing / fixed fee (illustrative) Assumed ₹25 ₹40 ₹60
    Shipping / weight handling (illustrative) Assumed ₹60 ₹90 ₹130
    Expected return cost Return rate × (reverse shipping + unsellable share × product cost) ₹8 (8% returns) ₹25 (10% returns) ₹104 (15% returns)
    Advertising per unit Net revenue × TACOS assumption ₹63 (15%) ₹254 (20%) ₹847 (25%)
    Contribution per unit Net revenue − all lines above ₹101 ₹190 ₹382
    Contribution margin Contribution ÷ net revenue 23.9% 14.9% 11.3%

    Table 9. HYPOTHETICAL unit economics. Fee figures are placeholders chosen to show the method, not current Amazon or Flipkart rates. Platform fees are shown ex-GST; GST on fees is assumed recoverable as input tax credit. Replace every input with your own rate card and costs.

    Contribution margin after advertising, by hypothetical profile

    A
    23.9%
    B
    14.9%
    C
    11.3%

    Chart 1. Hypothetical, derived from Table 9. Units: % of net revenue (ex-GST). Note that the highest price does not produce the highest margin once returns and advertising scale with price.

    What the profiles show

    Profile A benefits from an assumed zero referral fee, but fixed and shipping costs are a large share of a low price, so small cost changes matter. Profile B is healthy only if advertising stays near the assumed level. Profile C has the largest rupee contribution per unit (₹382) but the lowest margin, because higher return rates and advertising intensity scale with price. In each case, the contribution must still cover fixed costs such as team or agency fees, photography and software before there is net profit.

    Break-even advertising

    Contribution before advertising ÷ net revenue gives your break-even TACOS: the share of revenue you can spend on ads before a SKU stops contributing anything. For Profile B, contribution before ads is ₹444 on ₹1,270 net revenue, so break-even TACOS is about 35%. Spending above that loses money on every unit, however good the platform ROAS looks.

    Break-even TACOS by hypothetical profile

    A
    38.9%
    B
    34.9%
    C
    36.3%

    Chart 4. Hypothetical, from Table 9. Formula: (contribution per unit + ad cost per unit) ÷ net revenue. Units: % of net revenue. Above this ad intensity, each unit loses money.

    14Growth trap

    How a Seller Can Grow Revenue While Losing Money

    Rising sales charts are reassuring. They can also hide a business that loses more money every month it grows.

    The scenario below starts with Profile B at a sensible advertising level. To grow, the seller bids on broader keywords, joins more deals and deepens discounts. Units rise more than fourfold. Each step looks reasonable in isolation, and platform ROAS may still look acceptable, but contribution per unit falls faster than volume rises.

    Month Units Avg discount TACOS Net revenue Ad spend Contribution Net after ₹60,000 fixed costs
    1 400 0% 15% ₹5,08,136 ₹76,220 ₹1,01,262 ₹41,262
    2 550 0% 20% ₹6,98,686 ₹1,39,737 ₹1,04,301 ₹44,301
    3 750 5% 26% ₹9,05,117 ₹2,35,330 ₹54,575 −₹5,425
    4 1,000 8% 31% ₹11,68,712 ₹3,62,301 −₹10,060 −₹70,060
    5 1,300 10% 36% ₹14,86,297 ₹5,35,067 −₹1,06,880 −₹1,66,880
    6 1,700 12% 40% ₹19,00,427 ₹7,60,171 −₹2,39,106 −₹2,99,106

    Table 10. HYPOTHETICAL scaling scenario using Profile B costs. Assumptions: deeper discounts and broader keywords raise TACOS as volume grows; fixed costs (team, agency, tools) ₹60,000 per month. Formula: net = units × contribution per unit − fixed costs.

    Net revenue by month (hypothetical)

    Month 1
    ₹5,08,136
    Month 2
    ₹6,98,686
    Month 3
    ₹9,05,117
    Month 4
    ₹11,68,712
    Month 5
    ₹14,86,297
    Month 6
    ₹19,00,427

    Chart 2. Hypothetical, from Table 10. Units: ₹ net revenue (ex-GST).

    Net result by month (hypothetical; bar length shows size, colour shows profit or loss)

    Month 1
    ₹41,262
    Month 2
    ₹44,301
    Month 3
    −₹5,425
    Month 4
    −₹70,060
    Month 5
    −₹1,66,880
    Month 6
    −₹2,99,106

    Chart 3. Hypothetical, from Table 10. Units: ₹ per month after fixed costs. Green = profit, red = loss. Revenue rises about fourfold while the business moves from profit to a growing loss.

    Warning signs

    • ✓TACOS rising month after month while organic sales share falls.
    • ✓Average selling price falling because of deeper or more frequent discounts.
    • ✓Return rate rising as you reach less-qualified shoppers.
    • ✓Inventory and receivables growing faster than bank balance.
    • ✓Reports celebrating revenue and ROAS but never showing contribution after ads.

    Decision rule

    Scale advertising only while contribution margin after ads stays above your target and TACOS is stable or falling. If either breaks, pause expansion and fix price, conversion or targeting first.

    How to reverse the trend

    If your own numbers look like Table 10, do not respond by cutting everything at once. First, separate campaigns by role and cut spend on broad terms that are above break-even ACOS while protecting the exact-match terms that still make money. Second, reduce discount depth and frequency, and test whether conversion actually falls. Third, check the return rate on newly acquired customers, because broader targeting often brings buyers who return more. Fourth, review fixed costs: as volume grows, team and tool costs should fall as a share of revenue; if they rise, the operating model needs attention. Re-run the SKU worksheet after each change so you can see which lever moved contribution.

    15Measurement

    ACOS, TACOS, ROAS, Contribution Margin and Cash Conversion

    Platform dashboards report advertising efficiency. Your business needs profit and cash. Use both sets of numbers together.

    Metric Formula What it tells you Common mistake
    ACOS (advertising cost of sales) Ad spend ÷ ad-attributed sales Efficiency of campaigns on the sales the platform attributes to them Treating a low ACOS as profit without knowing break-even ACOS
    ROAS (return on ad spend) Ad-attributed sales ÷ ad spend (= 1 ÷ ACOS) Same as ACOS, expressed as a multiple Comparing ROAS across products with very different margins
    TACOS (total ACOS) Ad spend ÷ total sales (ads + organic) How dependent the whole business is on advertising Ignoring it while scaling; rising TACOS often means ads are replacing organic sales
    Break-even ACOS Contribution before ads ÷ ad-attributed sales price (per unit) The maximum ACOS at which an ad sale still contributes zero Using one break-even for all SKUs
    Contribution margin (Net revenue − variable costs including ads) ÷ net revenue Whether each unit funds overheads and profit Calculating it before ads or before returns
    Cash conversion cycle Days of inventory + days to receive settlement − days of supplier credit How long cash is tied up per cycle Ignoring it until cash runs short during growth

    Table 11. Core marketplace metrics. Platforms attribute sales using their own windows and rules; treat attributed figures as estimates.

    Step 1

    Order placed

    Customer pays or chooses COD.

    Step 2

    Dispatch and delivery

    Your or the platform’s logistics; COD collected at the door.

    Step 3

    Return window

    Some orders return or are cancelled; refunds deducted.

    Step 4

    Settlement

    Platform pays out after deducting fees, TCS and TDS, on its settlement cycle.

    Step 5

    Reconcile and reinvest

    Match payout to orders; claim credits; fund the next production run.

    Diagram 1. Order-to-cash flow on a marketplace. Settlement timing varies by platform, programme and account.

    Cash conversion example (hypothetical)

    Suppose stock sits for 60 days on average before it sells (including time in transit and in the warehouse), settlements arrive about 10 days after delivery, and your supplier gives 30 days’ credit. Cash conversion cycle = 60 + 10 − 30 = 40 days. If monthly product purchases are ₹8 lakh, roughly ₹8 lakh × 40 ÷ 30 ≈ ₹10.7 lakh of working capital is tied up at any time. Doubling sales roughly doubles that requirement unless you shorten inventory days or extend supplier credit. Use your actual settlement cycle from your seller account; it varies by platform, programme and account standing.

    For ROAS fundamentals, see understanding ROAS.

    A one-page monthly dashboard

    Section Metrics
    Sales Net revenue (ex-GST), units, average selling price, organic share of sales
    Advertising Spend, ACOS by campaign type, TACOS, new-to-brand orders where available
    Profit Contribution after ads by SKU and in total; net after fixed costs
    Operations Days of cover, stockout days on top SKUs, return rate, account health status
    Cash Settlements received, open claims, TCS/TDS credits pending reconciliation, inventory value

    Table G. Monthly marketplace dashboard. Keep it to one page so decisions get made.

    Read the dashboard in the same order every month: profit first, then the drivers (price, ads, returns, stock), then cash. A month with record revenue and falling contribution is a warning, not a celebration.

    16Advertising

    Sponsored Advertising: Structure, Search Terms, Negatives, Creative Testing and Scaling

    Marketplace ads work best as a disciplined system: tight structure, weekly search-term review, and budgets that follow contribution, not just ROAS.

    A practical campaign structure

    Campaign type Purpose Notes
    Automatic / broad discovery Find search terms and placements you would not have guessed Keep budgets modest; harvest winning terms weekly
    Manual exact match on proven terms Control bids on terms that convert profitably Main profit engine once data exists
    Phrase or broad on category terms Controlled expansion Watch for irrelevant matches
    Product or category targeting Appear on competitor or complementary product pages Target products where your offer genuinely compares well
    Brand defense Protect your brand searches and product pages Usually low cost; prevents competitors capturing your demand
    Brand ads / video (where eligible) Awareness and range discovery Judge on new-to-brand customers and branded search growth, not only ACOS

    Table 12. Campaign structure for Amazon and Flipkart sponsored ads. Available formats and names vary by platform and eligibility.

    Search-term analysis and negative targeting

    • ✓Download the search-term report weekly at first, then fortnightly once stable.
    • ✓Move converting terms into exact-match campaigns with their own bids.
    • ✓Add terms with clicks but no orders, after a reasonable number of clicks you define, as negatives.
    • ✓Add irrelevant terms (wrong product, wrong size, competitor brands you cannot beat) as negatives immediately.
    • ✓Set bids per term from break-even ACOS for that SKU, not one bid for everything.

    Creative and listing tests

    Change one thing at a time — main image, title, price, coupon or A+ module — and compare conversion over a comparable period, allowing for seasonality. Where a platform offers built-in experiments for listing content, use them; otherwise keep a change log so you know what changed when.

    When to scale and when to pause

    Scale a campaign when it is below break-even ACOS with stable conversion and stock cover for at least your replenishment lead time. Pause or cut bids when a SKU is low on stock, when ACOS stays above break-even after fixes, or when the listing has a content or review problem that ads cannot overcome. Advertising a product that is about to go out of stock wastes money and can hurt organic ranking when it stops selling.

    See Amazon marketing services for how we approach Amazon advertising.

    Setting bids from break-even (hypothetical)

    Take Profile B from Section 13. Contribution before advertising is roughly ₹443 per unit on a net price of about ₹1,270, so break-even ACOS is about 35%. If you want ads to leave at least ₹150 contribution per unit, your target ACOS is (443 − 150) ÷ 1,270 ≈ 23%. If a keyword converts at 10% of clicks into orders, the maximum average cost per click that meets the target is roughly 1,270 × 23% × 10% ≈ ₹29. Bidding well above that on the keyword means paying for growth with margin. The arithmetic is simple, but it forces each bid decision to connect to a profit target.

    Input Value (hypothetical) Formula
    Net revenue per unit ₹1,270 Price ÷ 1.18
    Contribution before ads ₹443 From Table 9 (₹190 contribution + ₹254 ad cost)
    Break-even ACOS ≈35% 443 ÷ 1,270
    Target ACOS (keep ₹150/unit) ≈23% (443 − 150) ÷ 1,270
    Conversion rate (clicks to orders) 10% From your search-term data
    Maximum target CPC ≈₹29 1,270 × 23% × 10%

    Table C. Translating margin into bids. Replace every value with your own data.

    Launch phase versus steady state

    New listings have no sales history, so they often need more advertising support at first to gain visibility and early reviews. Set a launch budget and a time limit in advance (for example, a fixed number of weeks), accept a higher ACOS during that period, and define what success looks like at the end: conversion rate, organic rank for core terms, and reviews from genuine buyers. If those signals are not there by the deadline, more budget is unlikely to fix it.

    17External traffic

    External Traffic: When It Helps and How to Measure It

    Sending shoppers from Instagram, YouTube, Google or your own audience to your marketplace listing can help, but only if you can measure it and the economics work.

    External traffic helps most when you already have demand outside the marketplace (an audience, a brand people search for, creators who use your product) or when you launch a new product and need early sales velocity. It is less useful for unknown products in competitive categories, where paying for clicks outside the platform and then losing shoppers to competitors on the listing page can be expensive.

    • ✓Use the platform’s own attribution tools where available (Amazon offers attribution tagging for eligible brand owners; check availability in your account), or unique tagged links per source.
    • ✓Send traffic to a Brand Store or a single focused listing, not a search results page.
    • ✓Compare cost per order from external traffic with your marketplace ad cost per order.
    • ✓Watch for halo effects: increases in branded searches and organic sales during and after campaigns.
    • ✓Keep creator and influencer arrangements transparent and compliant with advertising disclosure guidelines.

    A simple economics check (hypothetical)

    If an Instagram campaign costs ₹30,000 and tagged links show 1,000 visits to your listing, with a 6% conversion rate that is 60 orders, or ₹500 per order. Compare that with Profile B’s contribution before advertising of about ₹443 per unit: on these numbers, the campaign loses money on the attributed orders alone. It might still be worth it if branded searches and organic sales rise measurably afterwards, but that has to be checked, not assumed.

    18Account health

    Account Health, Suppressed Listings, Disputes and Legitimate Review Practices

    Your seller account is the business asset. Protect it the way you would protect a factory licence.

    Account health

    Both platforms track seller performance: on Amazon through the Account Health dashboard (covering metrics such as order defects, cancellations, late dispatch and policy compliance), and on Flipkart through seller performance metrics, with penalties for dispatch and cancellation failures reported in 2026. Check the dashboards at least weekly, know the current targets for your account, and respond to notifications within the time given.

    Problem Common causes First response
    Suppressed or inactive listing Missing attributes, image policy issues, pricing errors, compliance documents, restricted keywords Read the exact reason in the listing quality or catalogue dashboard; fix and resubmit
    IP or authenticity complaint Listing on another brand’s catalogue, trademark misuse, unauthorized reselling Gather invoices and authorization; respond factually; take legal advice for serious claims
    Rising order defects Late dispatch, wrong items, damaged deliveries, poor customer responses Fix the operational cause; respond to customers quickly
    Customer A-to-z / dispute claims Delivery failures, item not as described Respond with evidence within deadlines; track patterns by SKU

    Table 13. Common account issues and first responses.

    Reviews: what is legitimate

    Marketplaces prohibit manipulating reviews, including paying for reviews, offering refunds or gifts in exchange for reviews, reviewing your own products, or asking only satisfied customers to review. Amazon has long prohibited incentivised reviews outside its own programmes such as Vine (Amazon). In India, the Bureau of Indian Standards published IS 19000:2022 on online consumer reviews, and consumer-protection rules treat fake reviews as misleading. Legitimate practices include:

    • ✓Using the platform’s own review-request features and programmes.
    • ✓Including a neutral, non-incentivised review request card in packaging where the platform’s policy allows it.
    • ✓Improving the product and listing based on negative review themes.
    • ✓Responding helpfully to customer questions and complaints through permitted channels.

    Fixing a suppressed listing: a short routine

    • ✓Open the listing quality or catalogue issues report and note the exact reason code or message.
    • ✓Fix the specific field (missing attribute, image, compliance document, price outside reference range).
    • ✓Check that variations and parent-child relationships are still correct.
    • ✓Resubmit and confirm the listing is active and searchable; search for it from a buyer’s view.
    • ✓Record the cause so the same error is not repeated across other SKUs.
    19SKU strategy

    SKU Selection, Bundles, Seasonal Planning and Inventory Ageing

    Most marketplace profit usually comes from a small number of SKUs. Manage the range deliberately.

    Choosing SKUs to launch

    Demand evidence

    Search results with established competitors and reviews, and a price band your costs can work in.

    Defensible difference

    Better specification, pack size, design or bundle that shoppers can see in the listing.

    Operational fit

    Ships economically, low damage risk, manageable return behaviour.

    Economics

    Positive contribution after realistic ads and returns at the expected market price.

    Bundles and pack sizes

    Bundles can raise order value so that fixed per-order fees and shipping become a smaller share of price, and they make price comparison harder. They work when the items are genuinely used together. Avoid bundles that simply hide a slow seller inside a fast one; they often raise return rates.

    Seasonal planning

    Plan stock, deals and ad budgets backwards from major sale events and your category’s seasonal peaks. Platform warehouses can take longer to receive stock before big events, so inbound dates matter. After the peak, check for leftover seasonal stock early, before storage costs build.

    Inventory ageing

    Review stock age by SKU each month. Ageing inventory costs storage, ties up cash and, in platform warehouses, may attract long-term storage charges under current policies. Options in order of preference: improve the listing and price, bundle, move to another channel, return to your own warehouse, liquidate, or dispose. Decide by comparing the cash you recover with the cost of each option.

    Example seasonal calendar for planning

    Period Typical demand pattern (varies by category) Planning action
    Festive season (roughly Sept–Nov) Major sale events; gifting and home categories peak Build stock early; pre-agree deal economics; increase brand ads
    Wedding season Gifting, apparel, kitchen and home Bundles and gift-ready packaging
    Summer Cooling, hydration, travel, kids’ holidays Inventory for heat-related categories
    Monsoon Rainwear, footwear, home care Packaging that resists moisture; delivery delays
    Back to school Stationery, bags, lunch boxes Launch or refresh relevant SKUs ahead of time

    Table D. Example seasonal patterns. Check your own category’s history and each platform’s announced sale calendar.

    20Worksheet

    A SKU Profitability Worksheet Structure

    A one-row-per-SKU worksheet turns scattered reports into decisions.

    Column What to enter Source
    SKU, platform, fulfilment method Identifier and how it is fulfilled Seller account
    Selling price and price band Current price incl. GST; fee band it falls in Listing; rate card
    Net revenue (ex-GST) Price ÷ (1 + GST rate) Calculated
    Landed product cost Material, conversion, inbound freight Costing
    Packaging Primary and shipping packaging Costing
    Platform fees (ex-GST) Referral/commission, closing/fixed, shipping/weight, collection, fulfilment, storage per unit Live rate card; settlement report
    Return rate and return cost Return % × (reverse shipping + unsellable share × cost + return fees) Return reports
    Ad spend per unit SKU ad spend ÷ total units sold (TACOS basis) Ad console
    Contribution per unit and % Net revenue − all variable costs Calculated
    Units per month and total contribution Units × contribution per unit Calculated
    Days of cover and stock age Stock ÷ daily sales; age buckets Inventory reports
    Decision Stop / fix / scale and the reason Monthly review

    Table 14. SKU profitability worksheet structure. Build it as a spreadsheet with one row per SKU per platform.

    Update fees from the settlement report rather than only from the rate card, because actual charges sometimes differ (for example, from recorded weights). Review the worksheet monthly with whoever manages ads and inventory, so pricing, advertising and stock decisions are made together.

    21Decisions

    The Stop / Fix / Scale Decision Tree, and When to Discontinue a SKU or Pause Ads

    Every SKU should earn its place. A clear rule saves months of hoping a poor performer will turn around.

    Step 1

    Is contribution after ads positive?

    If no, go to Fix. If yes, continue.

    Step 2

    Is contribution margin above your target?

    If no, Fix price, costs, returns or ad efficiency.

    Step 3

    Is TACOS stable or falling?

    If rising, Fix targeting or conversion before adding budget.

    Step 4

    Is stock cover enough for lead time?

    If no, slow spend and replenish before scaling.

    Step 5

    Scale

    Raise budgets gradually; recheck all four tests monthly.

    Diagram 2. Stop / fix / scale decision path for each SKU. Thresholds are yours to set from your margins.

    Decision Evidence Actions
    Scale Positive contribution after ads above target; stable TACOS; healthy conversion; stock cover Increase budgets in steps; expand exact-match terms; add placements; secure supply
    Fix Contribution low or negative but a clear cause exists: price band, listing, returns, bids, fulfilment cost Change one major lever at a time; set a review date (e.g. 4–8 weeks) and a target
    Pause ads Low stock; ACOS above break-even after optimisation; listing suppressed or rating problem Stop or cut ads while you fix the cause; keep the listing live if organic sales are profitable
    Stop / discontinue Negative contribution after fixes; structural cost problem; persistent high returns or quality issues; no realistic path to margin Stop reordering; sell through existing stock sensibly; remove or liquidate; record the lesson

    Table 15. Evidence-based stop / fix / scale criteria.

    Common beliefThis SKU just needs more ad budget to take off.
    What usually happensIf conversion, price or reviews are the problem, more budget buys more expensive clicks that still do not convert. Fix the listing or offer first, then test spend again.
    22Team choice

    Agency vs In-House Marketplace Management

    The right model depends on your SKU count, ad budget, internal skills and how much day-to-day operational work you want to keep.

    Model Works well when Risks
    In-house team Large catalogue, steady volume, budget for skilled staff, close link to operations Hiring and retaining specialists; knowledge leaves with people
    Agency Need specialist skills across listings, ads and analytics quickly; want structured reporting Misaligned incentives if judged only on revenue; needs strong data access and communication
    Hybrid In-house operations and inventory; agency for ads, content and analytics Unclear ownership unless responsibilities are written down
    Freelancer Small catalogue; specific tasks such as listings Limited coverage; continuity risk

    Table 16. Management models. See our detailed comparison of agency, in-house and freelancer options.

    Whatever you choose, keep ownership of the seller accounts, ad accounts, brand registry and data with your business, and agree on reports that show contribution margin and TACOS, not only revenue and ROAS. Our agency vs in-house vs freelancer guide and the true cost of DIY marketplace management go further.

    Questions to ask an agency

    • ✓Will you report contribution margin after ads by SKU, or only sales and ROAS?
    • ✓How do you decide bids and budgets, and how often will you review search terms?
    • ✓Who handles listings, account health issues, reconciliation and claims?
    • ✓What do you need from us each week (stock data, costs, approvals)?
    • ✓Who owns the accounts and content if we part ways?

    Typical division of responsibilities

    Usually agency or specialist Shared Usually the seller
    Listing optimisation, ad campaign management, search-term analysis, reporting dashboards, brand content creation SKU worksheet review, pricing decisions, deal participation, stop/fix/scale calls Product quality, costing, inventory and production, dispatch, packaging, returns inspection, account ownership and approvals

    Table E. Division of responsibilities. Agree it in writing; the exact split depends on the scope you choose.

    23Action plan

    The First 90 Days

    The first quarter should establish profitable basics on a focused set of SKUs, not maximum listings.

    Period Focus Key actions Measure
    Days 1–30 Readiness and economics Choose 5–15 launch SKUs; build the SKU worksheet with live fees; complete approvals and brand registration; create listings with full attributes, images and size or spec guidance; decide fulfilment method per SKU; set up settlement reconciliation Contribution per unit at expected price; listing quality scores
    Days 31–60 Launch and learn Start sponsored product campaigns with modest budgets; weekly search-term review and negatives; monitor conversion and returns; first reconciliation and claims Sessions, conversion, ACOS vs break-even, return reasons
    Days 61–90 Fix and focus Apply stop/fix/scale to every SKU; move proven terms to exact match; adjust prices around fee bands; plan replenishment; add A+ or brand content for winners TACOS, contribution after ads, days of cover, account health

    Table 17. First 90 days on Amazon and Flipkart. Adjust the SKU count to your capacity.

    Weekly 30-minute review agenda

    • ✓Top 10 SKUs: sales, conversion, stock cover — any risk of stockout in the next lead-time window?
    • ✓Advertising: spend vs plan, terms added as negatives, terms promoted to exact match.
    • ✓Account health and listing issues: anything new, anything overdue?
    • ✓Returns and customer issues: any new pattern by SKU?
    • ✓Decisions and owners for the coming week, recorded in one place.
    24Roadmap

    A 12-Month Operating Roadmap

    After the first 90 days, the work becomes a monthly rhythm with quarterly resets.

    Step 1

    Q1: Foundation

    Focused SKUs, economics, listings, fulfilment, reconciliation, first ads.

    Step 2

    Q2: Optimise

    Exact-match structure, brand content, returns fixes, second platform or more SKUs if economics work.

    Step 3

    Q3: Prepare for peaks

    Inventory build, deal economics, brand ads, external traffic tests.

    Step 4

    Q4: Review and reset

    Post-peak ageing clean-up, annual SKU review, fee and price reset, next-year plan.

    Diagram 3. 12-month operating roadmap. Quarters are relative to your start; align peak preparation with your category’s sale calendar.

    Rhythm Activities
    Weekly Ads search terms and bids; stock cover; account health; open cases and claims
    Monthly SKU worksheet update; settlement reconciliation; return analysis; stop/fix/scale decisions
    Quarterly Fee and price review against live rate cards; range review; channel mix; TCS/TDS credit reconciliation with your accountant

    Table 18. Operating rhythm.

    25Working with us

    How Brand Chanakya Helps Marketplace Sellers

    Marketplace growth is an operations and finance discipline as much as a marketing one. That is how we approach account management.

    Brand Chanakya provides Amazon account management, Flipkart account management, Amazon marketing services and Flipkart catalogue management, and broader end-to-end ecommerce management. The focus areas in this guide — listings and catalogue, visibility and advertising, measurement, and profitability discipline — are what we discuss with sellers when planning an engagement. Scope and pricing depend on your catalogue, platforms and goals, so we agree them after understanding your situation.

    We cannot promise sales figures or rankings, and an agency cannot fix a product whose costs exceed what the market will pay. What a good partner can do is make the numbers visible early, so you invest in SKUs that work and stop the ones that do not.

    For Amazon and Flipkart sellersDiscuss your marketplace operations with Brand ChanakyaShare your categories, SKU count, platforms and current challenges. We will suggest where to start.Contact Brand Chanakya →

    Or call +91 97832 07700 / +91 77270 81010. See also Amazon & Flipkart management services explained.

    26FAQs

    Frequently Asked Questions About Selling on Amazon and Flipkart

    Is it profitable to sell on Amazon and Flipkart in India?

    It can be, for products with marketplace demand and margins that cover fees, shipping, returns and advertising. Build SKU-level unit economics from the live rate card before listing, and judge results on contribution margin after ads.

    What are Amazon seller fees in India?

    Amazon charges a combination of referral fees (now zero for eligible products under ₹1,000 in many categories, per its March 2026 announcement), closing fees, shipping or weight handling fees and, for FBA, fulfilment and storage fees, with GST on fees. Rates depend on category, price, weight and programme; check sell.amazon.in and Seller Central for current figures.

    Does zero commission on Flipkart mean selling is free?

    No. Even where commission is zero, other charges such as fixed fees, collection fees, shipping and return-related fees can apply. Confirm your category’s current rate card in Seller Hub.

    Should I start with Amazon or Flipkart?

    Start where your category has strong demand and where your SKU economics work best. Many sellers start on one platform to stabilise operations, then add the second. Model both using live rate cards.

    Is TCS deducted by Amazon or Flipkart a cost?

    Generally no. GST TCS (0.5% of net taxable supplies) is credited to your electronic cash ledger once accepted, and e-commerce TDS (0.1%) is claimable in your income tax return. They affect cash flow timing. Confirm treatment with your accountant.

    What is a good ACOS?

    There is no universal good ACOS. Compare ACOS with each SKU’s break-even ACOS, which depends on its margin, and watch TACOS for the whole business.

    What is the difference between ACOS and TACOS?

    ACOS is ad spend divided by ad-attributed sales. TACOS is ad spend divided by total sales, including organic. TACOS shows how dependent your business is on advertising.

    Should I use FBA or Easy Ship?

    FBA can improve delivery speed and conversion but adds fulfilment and storage costs and moves inventory into Amazon’s warehouses. Easy Ship keeps stock with you. Compare total cost per delivered order and conversion on a few SKUs before switching.

    Can I get A+ content without a trademark?

    On Amazon, A+ content is generally available to brand owners enrolled in Brand Registry, which requires a registered or pending trademark. Check current eligibility in your account.

    How do I reduce returns?

    Track return reasons by SKU, then fix the cause: size charts, accurate images and descriptions, better packaging, quality control and correct variant mapping.

    How often should I reconcile settlements?

    At least monthly, with weekly checks for large sellers. Compare orders, fees, refunds and reimbursements against your records and the current rate card, and raise cases for differences.

    Can I ask customers for reviews?

    Yes, through the platform’s permitted tools and neutral requests. Do not offer money, discounts, refunds or gifts for reviews, and do not ask only happy customers. Review manipulation can lead to account action.

    When should I stop selling a SKU?

    When contribution after ads stays negative after reasonable fixes, return or quality problems persist, or the price the market accepts cannot cover your costs. Sell through remaining stock sensibly and record why.

    Should I hire an agency or build an in-house team?

    It depends on catalogue size, ad budget and skills available. Agencies bring specialist skills quickly; in-house teams stay closer to operations. Many sellers use a hybrid. Keep account ownership with your business either way.

    Disclaimer

    The information, figures, fee structures, tax rates and policy references in this guide have been compiled from various publicly available sources on the internet, including platform announcements, news reports and government websites. They are shared for general educational purposes only and may change without notice.

    All unit economics, scaling scenarios, calculations and fee lines shown here are hypothetical illustrations. They are not current Amazon or Flipkart rates and not Brand Chanakya client results.

    Fees, programmes and tax rules change often. Please verify the latest details in Amazon Seller Central, Flipkart Seller Hub and with your chartered accountant or legal adviser before making any business or financial decision.

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