Amazon is taking a step to offset its rising costs, announcing it will add a 5 per cent “fuel and inflation surcharge” to fees it charges third-party sellers who use the e-commerce giant's fulfillment services.
The Seattle-based company said on its website that the added fees, which take effect April 28, are “subject to change” and will apply to both apparel and non-apparel items.
Amazon didn't immediately respond to a request for further details on the move. But in a notice sent to sellers Wednesday, the company said its costs had gone up since the beginning of the Covid-19 pandemic due to increases in hourly wages, the hiring of workers, and the construction of more warehouses.
It said it had absorbed costs whenever possible, and only increased fees to address permanent costs and to be competitive with other providers. Amazon competitors FedEx and UPS both have fuel surcharges.
“In 2022, we expected a return to normalcy as Covid-19 restrictions around the world eased, but fuel and inflation have presented further challenges,” the company said in the notice. The latest fee hike follows one announced in November and which went into effect in January.
Federal data released Tuesday showed inflation jumped 8.5 per cent in March, its fastest pace in more than 40 years. Gasoline prices have rocketed 48 per cent in the past 12 months.
Amazon's third-party marketplace, where independent merchants list millions of their products, is a huge part of its business. It has about 2 million sellers, and more than half the goods sold on Amazon.com come from these sellers.
Last year, sellers paid Amazon about $103 billion in fees, which made up about 22 per cent 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 has long faced accusations of undercutting merchants that sell on its platform by making “knock-offs,” or very similar products, and boosting their presence on the site.