Amazon imposes a surcharge on US sellers to offset rising inflation and fuel costs

Amazon is adding a 5 percent surcharge to its delivery costs in response to rising fuel costs and inflation, the company told third-party sellers on Wednesday.

The fee, which takes effect on April 28, will be applied to US merchants who use Amazon’s logistics network to deliver products, known as Fulfillment By Amazon. It is not intended to be permanent and will not be passed directly to the consumer.

The fee will be added to the unit shipping cost, not the total product price, a spokesperson said. For example, the cost of delivering a T-shirt would increase from $5.07 to $5.32. The average increase will be 24 cents per package.

While the company won’t disclose how many packages it ships, an estimate by logistics consultancy MWPVL suggested 3.25 billion packages were shipped from third-party sellers to U.S. customers through Fulfillment By Amazon by 2021.

The surcharge does not apply to deliveries by other companies, such as the US Postal Service or UPS.

In a message sent to sellers on Wednesday, Amazon said it had so far absorbed some of the increased costs of doing business, such as adding more than 750,000 new employees, raising wages and rapidly expanding its business. storage footprint.

“In 2022, we expected a return to normalcy as Covid-19 restrictions eased around the world, but fuel prices and inflation have presented further challenges,” the statement said.

“It’s still unclear whether these inflationary costs will rise or fall, and how long they will last.”

The move is one of several measures Amazon has taken to offset the rising costs of its logistics operation. In February, it said the price of its Prime membership program — where customers pay a monthly or annual fee for free delivery — would increase from $119 to $139 per year.

The change was made in part because of an increase in “wages and transportation costs” in its logistics network, the company said at the time.

The pandemic has heightened tension between Amazon and its millions of third-party sellers, whose products made up 56 percent of e-commerce store units sold in the most recent quarter.

“I just threw my hands in the air,” said Jason Boyce, chief executive of brand agency Avenue7Media. What’s next for these sellers? Amazon is currently in an insurmountable position to do what they want.”

During the early onset of the coronavirus outbreak, the company abruptly stopped accepting items in its warehouses that were deemed non-essential, such as cleaning supplies.

In a recent survey of 3,500 global Amazon sellers conducted by e-commerce software platform Jungle Scout, 64 percent said rising supply chain costs were the number one concern for their businesses in 2022.

But Mike Scheschuk, Jungle Scout’s chief marketing officer, added that the changes are unlikely to lead to price increases for in-store consumers. “Any time fees increase, a seller may consider passing the cost on to the customer, but many will decline to do so to maintain their competitive edge in the market,” he said.