As of April 28, Amazon is applying a 5% surcharge to all third-party sellers to offset its rising costs. The stated purpose of this is to cover the increased fuel and inflation prices.
To offset the costs of inflation and a spike in gas prices, Amazon is applying a 5% surcharge to shipping for the 2 million third-party sellers that make up half of the sales on the platform. The surcharge is set to apply to all apparel and non-apparel items and affects all sellers that utilize shipping through Amazon such as Fulfillment by Amazon users (FBA).
In a notice sent to sellers in the middle of last month, Amazon stated that costs were rising due to increases in hourly wages, hiring 750,000 new workers, and construction of additional warehouses. Since the start of the pandemic, Amazon has increased the number of fulfillment centers by 30%.
“In 2022, we expected a return to normalcy as COVID-19 restrictions around the world eased, but fuel and inflation have presented further challenges,” said Amazon in the notice.
According to federal data, inflation has increased to 8.5% this year. This is compounded by an increase in gas prices by 48% over the last 12 months.
This fee hike follows another 5.2% fee that took effect in January and a year in which Amazon collected approximately $103 billion in fees that made up approximately 22% of its revenue.
According to research done by the Institute for Local Self-Reliance, ILSR, a small business advocacy group, Amazon’s fees have increased by 15% since 2014. Stacy Mitchell, the co-executive director of the group, criticized the new fee, stating antitrust concerns.
With the rising fees, some sellers are concerned they will be forced to raise prices, passing the cost of the fee on to the consumer.
“We absolutely will need to raise prices,” Molson Hart of Viahart Toy Co which sells on Amazon, told Bloomberg. “Some sellers cannot because customers are not accepting the new higher prices.”
Amazon announced that these fees would apply to all products ordered before April 28 that were scheduled to ship afterward. On the same day, Amazon released its earnings report for the first quarter of the year. Said report showed that Amazon reported its revenue increased by 7%, the slowest quarter since 2001.
We here at Anata are watching the situation closely, and encourage sellers to contact us for help handling the ever-changing landscape of the Amazon Marketplace.
What do you think of the new Amazon seller fees?