Amazon announced on Wednesday that it will add a 5% “fuel and inflation surcharge” to the fees it charges third-party merchants that use the e-commerce giant’s fulfillment services to counteract rising costs.
The new levies will go into effect on April 28. But Amazon fuel and inflation surcharge are “subject to change”. It will apply to both apparel and non-apparel purchases, according to the Seattle-based company’s website.
The most recent fee increase follows one announced in November and implemented in January. Amazon didn’t immediately respond to a request for further details on the recent move. However, the company stated in a note sent to sellers on Wednesday that its costs had increased since the start of the COVID-19 outbreak. It was due to increases in hourly rates, the hire of additional staff, and the construction of more warehouses.
It said that it had absorbed costs whenever possible. Also, it only raised fees to cover fixed costs and remain competitive with other providers. Fuel costs are charged by Amazon competitors FedEx and UPS.
“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.
Inflation
Inflation rose 8.5 % in March, the fastest rate in more than 40 years, according to federal figures released Tuesday. In the last year, gasoline costs have risen by 48%.
Amazon is blaming the extra on inflation and rising gasoline costs. But Stacy Mitchell, co-director of the anti-monopoly group Institute for Local Self-Reliance, criticized the statement on Wednesday. Thereby, claiming Amazon was taking advantage of the situation.
“Amazon keeps increasing its fees on the sellers that have to depend on its platform,” Mitchell said, adding the new fees are a way “to take more money out of the pockets of independent businesses and put it into Amazon’s coffers.”
Amazon’s third-party marketplace, where independent merchants list millions of their products, accounts for a significant portion of its revenue. It has around 2 million sellers, and these sellers account for more than half of the items sold on Amazon.com.
Knock-offs
Sellers paid Amazon $103 billion in fees last year, accounting for nearly 22% of the company’s income. The increased fees will apply to anything ordered before April 28 but shipped and delivered after that date, according to the online store. On April 28, Amazon is likely to announce its profits report for the first three months of the year.
Amazon has long been accused of undercutting retailers on its platform by creating “knock-offs,” or remarkably identical products, and promoting them on the site.