Amazon adds 5% ‘fuel and inflation surcharge’ to seller fees

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

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

The latest rate hike follows one announced in November and took effect in January. Amazon did not immediately respond to a request for more details about the recent move. But in a message sent to sellers on Wednesday, the company said costs have risen since the onset of the COVID-19 pandemic due to increases in hourly wages, hiring workers and building more warehouses.

It said it had absorbed costs where possible and increased rates only to address permanent costs and to compete with other providers. Amazon competitors in the United States FedEx and UPS both have fuel surcharges.

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

U.S. federal data released Tuesday showed inflation in the country rose 8.5% in March, the fastest pace in more than 40 years. Gasoline prices have risen by 48% in the past 12 months.

While 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 for the merchants who rely on its platform,” said Ms. Mitchell, adding that the new fees are a way “to take more money out of the pockets of independent companies and put it into Amazon’s coffers.” fuses.” Amazon’s third-party marketplace, where independent merchants list millions of their products, is a big part of his business. It has about 2 million sellers and more than half of the goods sold on come from these sellers.

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 rates 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 been accused of undercutting sellers who sell on its platform by creating “knock-offs” or very similar products and increasing their presence on the site.

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