Tips to Sell Successfully on Amazon India in 2026

Validate Demand Before Investing

Don't guess what will sell. Use Amazon's Best Sellers Rank (BSR), review counts, and keyword research tools to identify products with consistent demand. Look for products with:

• BSR under 10,000 in your category
• At least 50+ reviews on top competitors
• Steady sales velocity (not just seasonal spikes)
• Profit margins of at least 30-40% after all fees

Calculate True Profitability

Amazon fees can eat into margins quickly. Calculate:

• Referral Fee: 5-15% depending on category
• FBA Fees: Storage + fulfillment charges
• Shipping Charges: If using FBM
• GST on Fees: 18% GST on Amazon's commission
• TCS: 1% TCS deduction by Amazon
• Returns & RTO: Factor in 5-10% return rate

Example: If you sell a product for ₹1,000, after Amazon fees (15%), FBA fees (₹50), GST on fees, and TCS, your net might be around ₹750-780. Ensure your cost is below ₹500-550 to maintain healthy margins.

Register for GST Early

If your annual turnover exceeds ₹20 lakhs (₹10 lakhs for North-Eastern states), GST registration is mandatory. Even if below threshold, consider registering if you plan to scale quickly. Benefits include:

• Input tax credit on purchases
• B2B sales eligibility
• Professional credibility

Understand TCS Implications

Amazon deducts TCS (Tax Collected at Source) at 0.5% CGST + 0.5% SGST = 1% total on your sales. This appears in your settlement reports. Key points:

• TCS is shown separately in Amazon settlement statements
• You can claim TCS credit in your income tax return
• Ensure your accounting system tracks TCS separately
• Reconcile TCS amounts between Amazon reports and Form 26AS

Optimize for Indian Buyers

Indian buyers search differently. Use:

• Hindi keywords where relevant (especially for regional products)
• Local product names and measurements
• High-quality images (minimum 1000x1000px)
• Clear product descriptions with bullet points
• Proper HSN codes for GST compliance

Competitive Pricing in High-Competition Marketplace

Pricing on Amazon India is dynamic. Strategies:

• Penetration Pricing: Start 5-10% below competitors to gain initial sales and reviews
• Value-Based Pricing: Price based on perceived value, not just cost
• Dynamic Pricing: Use repricing tools to stay competitive
• Bundle Pricing: Create product bundles for better margins

Important: Never price below your total cost (product + fees + GST + TCS + returns). Many new sellers lose money by ignoring hidden costs.

Product Line Expansion

When scaling, focus on:

• Complementary Products: Add products that customers buy together
• Private Label Expansion: Build your brand with multiple SKUs
• Seasonal Products: Plan for festival seasons (Diwali, Holi, etc.)
• Regional Variations: Adapt products for different Indian markets

Handle Multiple GSTINs Efficiently

If you operate warehouses in multiple states or have separate business verticals:

• Register separate GSTINs for each state (if required)
• Use ISD (Input Service Distributor) registration for centralized services
• Maintain separate accounts for each GSTIN
• File GSTR-6 monthly if registered as ISD
• Use automation tools to segregate orders by GSTIN automatically

[Read more: Multi-GSTIN Management Guide]

Optimize Inventory Levels

For scaling sellers:

• ABC Analysis: Focus on high-velocity products (A-items)
• Safety Stock: Maintain 2-3 weeks of inventory for top sellers
• FBA Inventory Limits: Monitor and optimize FBA storage limits
• Multi-Warehouse Strategy: Use Amazon's IXD program for faster delivery

Strategic Advertising

As competition increases, advertising becomes essential:

• Sponsored Products: Start with 5-10% of revenue
• Sponsored Brands: For brand building
• Display Ads: For retargeting
• Track ACoS (Advertising Cost of Sales): Aim for 20-30%

The Three-Leg Matching Challenge

Amazon transactions involve three separate legs:

1. Order Placement: Customer places order
2. Amazon Settlement: Amazon collects payment and deducts fees
3. Bank Remittance: Amazon transfers money to your bank

These three amounts rarely match perfectly due to:

• Returns processed after settlement
• Chargebacks and refunds
• Fee adjustments
• TCS deductions
• Timing differences

Settlement-based accounting reconciles actual Amazon settlement reports with bank remittances, ensuring accurate books. This is different from order-based accounting, which can lead to discrepancies.

Monthly GST Filing Requirements

As an Amazon seller, you must file:

• GSTR-1: Outward supplies (sales) - by 11th of next month
• GSTR-3B: Summary return with tax payment - by 20th of next month
• GSTR-9: Annual return - by 31st December

Key points:

• Classify products with correct HSN codes
• Separate B2B and B2C sales
• Account for IGST (inter-state) vs CGST/SGST (intra-state)
• Reconcile with GSTR-2A/2B for input tax credit

Understanding Amazon Fees and GST

Amazon charges various fees, and GST applies to these fees:

• Referral Fee: 5-15% + 18% GST
• FBA Fees: Fulfillment + storage + 18% GST
• Shipping Charges: If applicable + 18% GST
• Long-term Storage Fee: If inventory stays >365 days

These fees reduce your taxable value. Ensure your accounting system correctly allocates fees and GST on fees to appropriate expense accounts.

Audit-Ready Accounting

Maintain books that are:

• CA-Friendly: Ledger names and voucher formats match CA requirements
• Audit-Ready: Complete audit trail for all transactions
• Reconciled: Settlement reports match bank statements
• GST-Compliant: Accurate HSN codes, tax rates, and ITC claims
• Tally-Compatible: Exportable to Tally ERP 9 or TallyPrime

This becomes crucial during:

• Income tax audits
• GST audits
• Bank loan applications
• Investor due diligence

[Read more: GST Compliance Best Practices]

Using Both FBA and FBM

Many successful sellers use a hybrid approach:

• FBA for fast-moving, small products
• FBM for slow-moving or large items
• FBA for Prime-eligible products
• FBM for products with custom requirements

This requires managing inventory across both channels and separate accounting for FBA and FBM sales.

Smart Inventory Management

Effective inventory management prevents stockouts and overstocking:

• Forecast Demand: Use historical sales data and seasonality
• Safety Stock: Maintain 2-4 weeks of inventory for top sellers
• Reorder Points: Set alerts when inventory reaches reorder level
• FBA Storage Limits: Monitor and optimize to avoid storage fees
• Dead Stock Management: Clear slow-moving inventory through promotions

Handling Returns Efficiently

Returns are common on Amazon India (typically 5-10% of orders):

• RTO (Return to Origin): Track undelivered packages
• Return Reasons: Analyze why products are returned
• Refund Processing: Process refunds within 2 days
• Accounting for Returns: Issue credit notes in accounting
• Restocking: Quickly restock returned items if resellable

Accounting Note: Returns require credit note entries in your books. Settlement-based accounting automatically handles return adjustments when Amazon processes refunds.

Settlement Schedule

Amazon typically settles payments:

• Weekly: For most sellers (every Tuesday)
• Bi-weekly: For new sellers initially
• Reserve Period: 7-14 days hold for new sellers

Plan your cash flow considering:

• Time between order and settlement (7-14 days)
• Time between settlement and bank credit (1-2 days)
• Inventory purchase cycles
• GST payment deadlines (20th of each month)

Calculate Working Capital Needs

For Amazon selling, you need working capital for:

• Inventory: 30-60 days of inventory value
• Amazon Fees: Fees deducted from settlements
• GST Payments: Monthly GST liability
• Marketing: Advertising and promotions
• Returns Reserve: 5-10% for returns and refunds

Example: If you sell ₹10 lakhs monthly, you need approximately ₹15-20 lakhs working capital (inventory + GST + reserves).