Transfer Pricing for E-commerce & Retail
We provide transfer pricing consulting for online marketplaces, fulfilment businesses, retail companies, private-label sellers and technology-led commerce groups operating through related entities in India.
Platform economics create layered related-party transactions
E-commerce transfer pricing in India requires mapping which group entity performs which function—marketplace, fulfilment, marketing or technology—and then benchmarking commission rates, fulfilment margins and platform royalties separately for each.
Transfer pricing for e-commerce companies in India can involve several related entities within a single customer transaction. One company may operate the marketplace, another may provide warehousing and delivery, while an overseas entity owns the platform software, brand, algorithms or customer-facing technology.
Each entity must earn a return that reflects its actual functions, assets and risks. Applying one standard margin across the group can be difficult to defend where the marketplace entity performs strategic functions, the fulfilment company owns significant infrastructure, or the foreign technology owner controls valuable platform development.
Typical e-commerce structure
An India-facing marketplace earns seller commission or platform fees, a related fulfilment company provides storage and delivery services, and an overseas group company charges for platform technology, algorithms, brand rights or centralised support.
A reliable transfer pricing benchmarking study should test each transaction independently while keeping the overall business model consistent.
Where transfer pricing applies in e-commerce
Digital commerce groups commonly have related-party flows covering seller services, logistics, technology, marketing, data and product sourcing.
Marketplace Commission
Marketplace commission transfer pricing concerns the fee earned for connecting sellers with customers, listing products, processing orders, supporting payments and managing platform-related services. Rates may vary by product category, seller type and the range of services included.
Fulfilment and Logistics
Fulfilment services TP in India may cover warehousing, inventory handling, packaging, returns processing and last-mile delivery. Benchmarking should reflect infrastructure ownership, capacity utilisation, service levels and responsibility for loss or damage.
Digital Marketing Cost Allocation
Global search advertising, customer-acquisition campaigns, affiliate marketing and brand promotions may be allocated to the Indian entity. The allocation key should reflect the actual benefit received and exclude duplicated or shareholder-level expenditure.
Platform Technology Royalty
Platform technology royalty in India may arise where an Indian entity licences marketplace software, algorithms, recommendation engines, trademarks or other digital assets from a foreign group company. The fee should correspond with the rights and commercial benefits provided.
Payment and Data Services
Related entities may provide payment-processing support, fraud detection, customer analytics, cloud infrastructure, cybersecurity or customer-service systems. Charges should be supported by clear service descriptions, benefit evidence and appropriate allocation keys.
Private-Label Sourcing
E-commerce and retail groups may source private-label products from related manufacturers or procurement entities. Pricing should reflect manufacturing functions, product-development responsibilities, inventory risk, quality control and ownership of the private-label brand.
How e-commerce transactions are benchmarked
Method selection depends on the specific transaction, available market data and the functional profile of the tested entity.
TNMM
TNMM may be used for marketplace support, fulfilment or routine service entities where reliable gross-level comparables are unavailable. Operating margins are compared with functionally similar independent businesses.
CUP Method
CUP may be considered for marketplace commissions, technology royalties or platform fees where reliable third-party contracts or sufficiently comparable external agreements are available.
Cost Plus Method
CPM may be suitable for fulfilment, logistics, customer support, technology maintenance or back-office services where a reliable cost base and comparable gross mark-up can be identified.
Cost Allocation Keys
Shared marketing, technology and regional-service costs may be allocated using revenue, transactions, users, orders, storage volume or another driver linked to the benefit received.
A functional map before a pricing model
We begin by mapping the complete digital-commerce value chain, including seller acquisition, platform operation, order processing, warehousing, delivery, returns, payment support, customer service, marketing, data analysis and software development.
We then identify which entity controls the key commercial risks and owns or uses the relevant assets. This prevents routine support companies from being benchmarked against platform owners and ensures that fulfilment entities are compared with businesses performing similar operational functions.
Commission rates, fulfilment returns and technology charges are tested separately but reviewed together to confirm that the overall allocation of group profit remains consistent with the actual contributions of each entity.
Functional Mapping
Identify which entity controls marketplace, fulfilment, technology, marketing, data and customer-related functions.
Commission Benchmarking
Analyse seller commission and platform fees using comparable commercial arrangements and transaction-specific factors.
Fulfilment Margin Study
Benchmark warehouse, logistics and delivery returns using comparable service providers and suitable economic adjustments.
Regulatory Alignment
Keep transfer pricing documentation consistent with contracts, operational conduct and the group's India-facing marketplace model.
Our e-commerce transfer pricing services
We support marketplaces, retailers, fulfilment businesses and technology-led commerce groups from transaction planning through annual compliance and dispute resolution.
Benchmarking Study
Economic analysis of marketplace commissions, fulfilment margins, platform royalties, sourcing returns and related digital-commerce transactions.
TP Documentation and Form 3CEB
Annual Local File preparation and accountant-report coordination for marketplace, logistics, technology, marketing and service transactions.
Cost Allocation Advisory
Design and documentation of allocation keys for shared technology, customer acquisition, marketing, cloud, data and regional support costs.
Audit and Litigation Support
Technical submissions and representation support for commission, royalty, fulfilment and cost-allocation disputes involving complex platform structures.
Learn more about international transaction transfer pricing .
E-commerce Transfer Pricing Questions
Running a marketplace or fulfilment entity in India?
Get your commission structure, fulfilment margin and platform technology charges reviewed by our transfer pricing team.
Related: Transfer Pricing Benchmarking · International Transaction Transfer Pricing