Amazon Sellers Will Soon Have to Pay 5% More in Fees
Amazon is making it more expensive for third party sellers to continue selling on its online retail platform. The company announced last week that for the first time in company history it will charge sellers a 5% fuel and inflation surcharge.
The e-commerce giant said the new fee will be introduced on April 28. That means that Amazon will charge an average 24 cents more per unit it stores and ships through its Fulfillment by Amazon (FBA) service. The news was first reported by Bloomberg.
Sellers do not have to use FBA to sell on Amazon. But those who do use it get more priority and visibility for their products. They are also eligible for Amazon prime fast delivery. Around 89% of Amazon’s 2 million-plus sellers used FBA in 2021.
“We know that changing fees impacts your business, and our teams are working each and every day to ensure FBA remains a great value for the premium fulfillment and delivery service it provides,” said a message to third-party sellers. “Since 2020 and inclusive of this change, Amazon has increased fulfillment rates less than other carriers, and continues to cost significantly less than alternatives.”
“The surcharge will apply to all product types, such as non-apparel, apparel, dangerous goods, and Small and Light items,” the message stated.
Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance, an advocacy group for small independent businesses, said the new fee “has the potential to be problematic when it comes to antitrust issues. The frequent Amazon critic said the company took a 34% cut of each merchant’s sale on the site in 2021. That’s up from 19% in 2014.
Now, with the new fuel charge, Amazon will take an even bigger cut. In 2021, sellers paid Amazon about $103 billion in fees, which made up about 22% of Amazon’s revenue.
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That is the sort of thing that killed Ebay from it’s peak.
An inflation fee? Does that mean when inflation subsides they will remove it?
That will never be removed.