Amazon Are Going To Have To Pay A 5% Fee Because Of Inflation And Higher Fuel Costs

People who sell on Amazon are going to have to pay a 5% fee because of inflation and higher fuel costs. There’s a good chance that products will get more expensive as a result.

Starting on April 28, Amazon will charge its online sellers a 5% fee. The company told Insider about the change on Wednesday.

Surcharge

Bloomberg first reported that sellers will be charged, not Amazon customers. It will likely raise prices across the board because sellers’ margins will be affected. Amazon’s decision is just the most recent example of rising costs because of rising fuel prices and rising prices.

A message from the Fulfillment by Amazon team to third-party sellers: “We know that changing fees can have an impact on your business, and our teams are working every day to make sure FBA stays a great value for the premium fulfillment and delivery service it provides.” The message was shared with Insider. As of 2020, Amazon hasn’t raised fulfillment rates as much as other carriers, and it hasn’t cost as much as other options.

The affected merchants are all in the United States

The affected merchants are all in the United States and use Fulfillment by Amazon, which is Amazon’s service for third-party sellers who want to store and deliver their goods. They charge $2.52 per unit for “the slowest standard shipping options,” and $14.08 per unit for two-day shipping options, says a spokesperson. These prices stay the same for these sellers. As a whole, third-party sales make up a big part of Amazon’s business, with sales of $30.3 billion in the company’s most recent fourth quarter. UPS has a fuel surcharge of $0.42 per unit, and FedEx has one that costs $0.49 per unit.

In a message to third-party sellers, Amazon said that it had “significantly invested in Amazon’s store and fulfillment operations to better serve you and our customers.” It also said that it had tried to absorb “significant cost increases.”

As COVID-19 restrictions around the world were eased in 2022, we thought things would go back to normal. But fuel and inflation have made things even more difficult for us. “We don’t know if these inflationary costs will go up or down, or for how long they will last, so instead of making a long-term fee change, we will be adding a fuel and inflation surcharge for the first time.”

Clients will “raise their prices along with this Amazon surcharge

An expert who works with third-party merchants told Insider that “the vast majority” of his clients will “raise their prices along with this Amazon surcharge.” He said that in most cases, that would lead to a “slight rise in prices” for people.

“It’s bad for customers, but it’s also bad for small businesses,” Elder said. “Costs have to be shared across the economy, even if the customers aren’t paying for them. They can only handle so much margin compression before their customers get hurt.”

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