Amazon India FBA in 2025: Opportunities and Issues Every Seller Must Know
Fulfilment by Amazon (FBA) is one of the biggest growth drivers for e-commerce sellers in India. By handling storage, packaging, and shipping, Amazon India FBA offers sellers the opportunity to scale quickly while providing customers with Prime-level service.
But here’s the catch: Amazon India FBA isn’t always smooth sailing. Sellers in India often face hidden costs, inventory challenges, reconciliation headaches, and cash flow crunches. If you’re selling on Amazon India or planning to use Amazon India FBA in 2025, this blog breaks down how FBA works, the common FBA issues sellers face, and how to stay profitable despite the hurdles.
TL;DR
FBA = storage, packing, and delivery by Amazon India in exchange for fees.
Key Benefits: faster Prime delivery, wider reach, better customer trust.
Top Issues Sellers Face in Amazon India FBA:
High & complex fee structure (storage, pick-pack, weight handling).
Inventory damages, lost units, and poor reimbursement.
Delayed payments, cash flow lockups.
Return abuse & high return handling charges.
Limited control over branding and customer communication.
What Sellers Should Do:
Monitor fees closely and reconcile Amazon India FBA payments.
Use multi-channel fulfilment strategies.
Keep safety stock outside Amazon India FCs.
Track reimbursements, SAFE-T claims, and return patterns.
Regularly reprice, optimise listings, and plan festive sales around fee hikes.
Quick Reference – What We’ll Cover
What is Amazon India FBA?
How FBA works in India – Step by Step
Why Sellers Choose Amazon India FBA
The Complete Fee Structure in 2025
Major FBA Issues Faced by Sellers in Amazon India
Hidden Fees & Cost Escalations
Inventory Mismanagement & Lost Units
Return Abuse & Reverse Logistics
Delayed Payments & Reconciliation Gaps
Lack of Control Over Branding
Merits vs Demerits of Amazon India FBA for Sellers
Practical Strategies to Reduce FBA Pain Points
What Sellers Should Do in 2025
The Bottomline
1. What is Amazon India FBA?
Fulfilment by Amazon (FBA) is a service where Amazon India stores your inventory in its fulfilment centres (FCs). Once a customer orders your product, Amazon India FBA handles:
Picking and packing.
Shipping to the customer (often Prime delivery).
Customer service and returns.
For sellers, this means fewer headaches in logistics, but a greater dependency on Amazon India, which can lead to certain FBA issues if not closely monitored.
2. How FBA Works – Step by Step
You send products to an Amazon India Fulfilment Centre.
Amazon India FBA stores them in their warehouses.
Customer places an order.
Amazon India FBA packs & ships the order directly.
Amazon India FBA manages returns and refunds if customers send products back.
You get paid after deducting FBA fees, storage charges, and commissions.
3. Why Sellers Choose Amazon India FBA
Prime Badge Advantage: Products fulfilled by Amazon India FBA automatically get the Prime logo, boosting conversion rates.
Pan-India Reach: Sellers can reach customers in Tier-2/3 cities where delivery networks are strong.
Operational Ease: No need to manage your own warehouse or delivery partners.
Customer Trust: Faster delivery + hassle-free returns increase repeat orders.
4. The Complete Fee Structure in 2025
Using Amazon India FBA isn’t free — sellers pay multiple fees, such as:
Storage Fees: Monthly fee per cubic foot of space used.
Pick & Pack Fees: Charged per unit packed.
Weight Handling Fees: Based on weight slabs (recently revised).
Referral Fees: Amazon India’s commission on each sale.
Removal / Disposal Fees: Charged when you want to pull stock back.
Returns Processing Fee: Charged on customer returns.
Hidden costs like long-term storage fees and mislabeled product penalties can silently eat into margins, a common FBA issue for Indian sellers.
Data Snapshot (Amazon India 2025):
Average pick & pack fee: ₹17 for standard size.
Weight handling slabs: ₹5 per additional kg after 1 kg, ₹2 per additional 5 kg after 5 kg (capped at 20 kg).
Storage charges spike during Q4 festive months by 1.5–2x due to high demand at FCs.
A seller moving 10,000 units monthly could spend over ₹2 lakh just in Amazon India FBA handling and storage — making reconciliation critical to avoid unnoticed revenue leakage.
5. Major FBA Issues Faced by Sellers in Amazon India
Amazon India FBA offers sellers several strong advantages, but also comes with notable challenges. On the positive side, the coveted Prime badge significantly boosts sales, while Amazon’s faster delivery network and pan-India reach expand market access. Sellers benefit from not needing to maintain their own warehouses, enjoy stronger customer trust due to Amazon’s credibility, and can rely on Amazon India’s customer service to handle buyer queries. However, these merits are balanced by critical drawbacks. FBA fees remain high and continue to rise, eating into margins. Inventory risks such as damages or missing stock are common, and sellers often face return abuse along with extra handling charges. Payments are also deducted upfront, creating cash flow lock-ins that strain working capital. Finally, while FBA ensures scale, it limits branding opportunities and long-term customer retention, making sellers dependent on Amazon’s ecosystem rather than their own.
a) Hidden Fees & Cost Escalations
Amazon India revises FBA fee structures frequently. Sellers discover rising storage fees during festive seasons or sudden weight-handling hikes. These unpredictable costs can shrink margins overnight, one of the biggest Amazon India FBA issues.
b) Inventory Mismanagement & Lost Units
Cases of damaged, misplaced, or unaccounted inventory are common. While Amazon India FBA reimburses some losses, claims are complex and often rejected without proper documentation.
This is where tools like Rekonsile help sellers by showing shipped vs received inventory and highlighting stock mismatches quickly — reducing the chances of losing money due to Amazon India FBA inventory issues.
c) Return Abuse & Reverse Logistics
High returns (especially in fashion, electronics, and accessories) burden sellers with:
Return handling charges.
Non-sellable damaged products.
Customers are abusing “free return” policies.
According to seller community reports, Amazon India’s FBA return rate in apparel can exceed 25%, and each return can cost sellers ₹50–₹200 in hidden fees and lost value.
d) Delayed Payments & Reconciliation Gaps
Even though Amazon India FBA pays sellers every 7–14 days, deductions for fees, TCS, penalties, and returns often lead to payment mismatches. Sellers frequently report discrepancies that require detailed Amazon India FBA reconciliation.
A seller moving ₹1 crore in monthly sales may face ₹5–10 lakh worth of mismatches unless payments are systematically tracked. Rekonsile simplifies this by automating reconciliation, helping sellers spot gaps instantly.
e) Lack of Control Over Branding
Since Amazon India FBA handles packaging, sellers can’t personalise unboxing experiences. Customer relationships belong to Amazon India, not the seller, making it harder to build long-term loyalty.
6. Merits vs Demerits of Amazon India FBA
Amazon India FBA offers sellers several strong advantages but also comes with notable challenges. On the positive side, the coveted Prime badge significantly boosts sales, while Amazon’s faster delivery network and pan-India reach expand market access. Sellers benefit from not needing to maintain their own warehouses, enjoy stronger customer trust due to Amazon’s credibility, and can rely on Amazon India’s customer service to handle buyer queries. However, these merits are balanced by critical drawbacks. FBA fees remain high and continue to rise, eating into margins. Inventory risks such as damages or missing stock are common, and sellers often face return abuse along with extra handling charges. Payments are also deducted upfront, creating cash flow lock-ins that strain working capital. Finally, while FBA ensures scale, it limits branding opportunities and long-term customer retention, making sellers dependent on Amazon’s ecosystem rather than their own.
7. Practical Strategies to Reduce FBA Pain Points
Reconcile Every Payout: Regularly check invoices, TCS, and fee deductions in Amazon India FBA statements.
Maintain Backup Stock: Keep some inventory in your own warehouse to avoid over-dependence.
Optimise Product Selection: Avoid low-margin items in FBA; focus on high-volume, fast-moving SKUs.
Track Returns & File SAFE-T Claims: Always document damages and raise claims promptly.
Multi-Channel Fulfilment (MCF): Use Amazon India FBA + third-party logistics for other channels.
Leverage Packaging Savings: Pass reduced logistics costs to customers as offers like “Free Shipping.”
Review Listings Frequently: Update pricing and keywords to stay competitive.
Use Tech Tools: Platforms like Rekonsile provide real-time FBA inventory health, helping sellers know exactly which SKUs are at risk of ageing fees, damages, or low stock.
8. What Sellers Should Do in 2025
Recalculate Margins: Factor in revised Amazon India FBA fees for 2025.
Automate Reconciliation: Use tools (like Rekonsile) to spot fee mismatches quickly.
Plan for Festive Spikes: Stock up early but avoid over-stocking to escape long-term storage fees.
Improve Product Quality: Reduce returns by focusing on better QC and detailed product descriptions.
Keep Flexible Pricing: Use coupons and time-bound discounts instead of permanent markdowns.
Explore Hybrid Models: Balance Amazon India FBA with FBM (Fulfilment by Merchant) for control and cost savings.
9. The Bottomline
Amazon India FBA remains a powerful growth lever for e-commerce sellers. The Prime badge, operational convenience, and customer trust it brings are unmatched. But the system comes with challenges: rising fees, inventory issues, return abuse, and payment mismatches — all common FBA issues in India.
For 2025, the smartest sellers on Amazon India will:
Stay vigilant with reconciliation.
Diversify fulfilment methods.
Anticipate festive season demand while managing costs.
Ultimately, Amazon India FBA is not a “set and forget” solution. It can multiply your sales, but only if you keep a close eye on profitability. With tools like Rekonsile, tracking your shipped/received inventory and highlighting FBA inventory health, sellers can protect their margins and make smarter decisions.
Sellers who track their numbers, adapt quickly, and build resilient systems will continue to thrive on Amazon India despite the hurdles.
