Why Your Amazon or Flipkart Revenue Never Matches Your Bank Account

Almost every new marketplace seller goes through the same shock. The Seller Central dashboard shows a healthy revenue number at the end of the month. The bank account tells a completely different story. The gap is not a glitch — it is the sum of a dozen different deductions that platforms apply before they settle your earnings.

Understanding each deduction is not just an accounting exercise. It is the only way to know whether your business is actually profitable.

Marketplace Commission (Referral Fee)

Every sale on Amazon or Flipkart attracts a referral fee — a percentage of the selling price that the platform keeps as its cut for providing the marketplace. On Amazon India, referral fees range from 2% (some electronics accessories) to 35% (jewellery, beauty). On Flipkart, the range is similar: roughly 3% to 30% depending on category.

The critical thing most sellers miss: the referral fee is calculated on the total amount paid by the buyer, including GST — not on your net price. So if you list at ₹1,000 and the buyer pays ₹1,180 (including 18% GST), the referral fee is calculated on ₹1,180, not ₹1,000. That extra ₹32 on a 15% referral fee category compounds across thousands of orders.

GST TCS: The Deduction Most Sellers Forget

Under the GST framework, e-commerce operators are required to collect Tax Collected at Source (TCS) at 1% of the net taxable value of every transaction they process on behalf of a seller. Amazon and Flipkart deduct this automatically before settlement.

This 1% is not lost money — you can claim it as a credit when you file your GST returns each month. But it does create a cash flow impact: the money leaves your settlement immediately but only comes back when you reconcile your GSTR-2B and claim the credit. Many small sellers do not claim it at all, which means they are effectively gifting 1% of their revenue to the government every month.

Returns and Reverse Logistics

Returns on Indian marketplaces run at 15–30% in categories like apparel, electronics, and footwear. Each return triggers a reverse logistics cost that is either deducted directly from your settlement or charged as a line item in your monthly statement. On top of that, some categories attract a restocking fee deduction — the platform charges you a percentage for receiving back the product.

The return itself also voids the revenue from that order. So a ₹2,000 order that gets returned means you lose ₹2,000 in settlement, pay reverse logistics of ₹60–120, and potentially receive the product back in unsellable condition. A 20% return rate in apparel can effectively turn a profitable GMV number into an operating loss.

Fulfilment and Storage Fees (FBA / Flipkart Assured)

If you use Fulfilment by Amazon (FBA) or Flipkart Assured (FA), fulfilment fees are deducted per shipment based on the size and weight of the product. These fees include pick and pack, first-mile logistics, and last-mile delivery. Storage fees are charged monthly for inventory sitting in the warehouse — and they increase significantly during peak season (October–January) when warehouses are full.

Sellers using FBA or FA often underestimate storage fees because they load inventory in bulk before a sale event and then find that slow-moving units accrue storage charges for months afterward. A product with a high referral fee plus FBA fulfilment plus 60 days of storage can have total platform costs exceeding 40% of its selling price.

COD Handling Charges

Cash-on-delivery still accounts for roughly 50–60% of orders in many Indian product categories. Platforms charge a COD handling fee — typically 1.5–2% of the order value — for collecting cash and remitting it to you. Additionally, COD settlements are delayed by 7–14 days compared to prepaid orders, which creates a working capital gap that compounds at volume.

For a seller doing ₹20 lakh per month with 60% COD penetration, the COD handling fee alone can be ₹18,000–24,000 monthly. That is a cost that does not show up on the platform GMV dashboard but hits the settlement directly.

Advertising Spend

Amazon Sponsored Products and Flipkart PLA (Product Listing Ads) are separate billing systems. Your ad costs are either deducted from your settlement balance or charged to a separate credit line, depending on your account setup. Either way, they do not appear in your order-level revenue view — they live in the advertising console with their own reporting.

Most sellers track GMV and ad spend in separate places and never put them in the same row. The result is a wildly optimistic view of profitability. A product with a 35% margin that spends 15% of revenue on ads has a 20% real margin — before all the other deductions above.

How to Build a True Settlement Reconciliation

Download your settlement reports from each platform monthly. These CSV files contain every transaction: orders, returns, refunds, fees, advertising charges, TCS deductions, and COD remittances. Map every line to a category: revenue, commission, fulfilment, returns, advertising, TCS, COD fees.

Once categorised, your true net settlement should match your bank deposit within rounding differences. The gap analysis — the difference between gross revenue and net settlement — tells you your effective platform cost percentage. If it is above 30%, your pricing probably needs revisiting before you scale further.