Amazon hits third-party sellers with 5% ‘fuel and inflation’ fees

Amazon is taking a step to offset its rising costs, announcing on Wednesday that it will add a 5% “fuel and inflation surcharge” to the fees it charges third-party sellers who use the giant’s fulfillment services of e-commerce.

The Seattle-based company said on its website that the additional fees, which take effect April 28, are “subject to change” and will apply to wearable and non-wearable items.

The latest fee hike follows one announced in November and took effect in January. Amazon did not immediately respond to a request for additional details about the recent move. But in a notice sent to vendors on Wednesday, the company said its costs have risen since the start of the COVID-19 pandemic due to increased hourly wages, hiring workers and construction of new warehouses.

He said he absorbed costs where possible and only increased fees to meet ongoing costs and to be competitive with other providers. Amazon’s competitors FedEx and UPS both have fuel surcharges.

“In 2022, we expected a return to normal as COVID-19 restrictions eased around the world, but fuel and inflation presented other challenges,” the company said in the statement. notice.

For 2021, Amazon reported profits of $33.4 billion on revenue of nearly $470 billion.

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Federal data released on Tuesday showed inflation jumped 8.5% in March, its fastest pace in over 40 years. Gasoline prices have climbed 48% over the past 12 months.

Although the company blames inflation and rising fuel costs for the surcharge, Stacy Mitchell, co-director of the anti-monopoly group Institute for Local Self-Reliance, criticized Wednesday’s announcement, saying Amazon was taking advantage of the moment .

“Amazon continues to increase its fees on sellers who must rely on its platform,” Mitchell said, adding that the new fees are a way “to take more money out of independent businesses’ pockets and put it into Amazon vaults”.

Amazon’s third-party marketplace, where independent merchants list millions of their products, is a big part of its business. It has around 2 million sellers and more than half of the products sold on come from these sellers.

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Last year, sellers paid Amazon about $103 billion in fees, which accounted for about 22% of the company’s revenue. The online retailer said the new fees will apply to products ordered before April 28 but shipped and delivered after that date. Amazon is also expected to release its earnings report for the first three months of this year on April 28.

Amazon has long faced accusations of undercutting merchants who sell on its platform by making “counterfeits” or very similar products, and boosting their presence on the site.

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