Amazon’s fuel surcharge could raise prices for consumers

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An Amazon PrimeNow employee stacks shelves at a fulfillment center in New York in December 2016. Amazon announced on April 13 that it will now charge sellers a 5% fuel and inflation surcharge to offset the rising costs. The fees could mean higher prices for consumers.

PA

Amazon has announced that it will now charge sellers who use its fulfillment services a 5% fuel and inflation fee to offset rising costs.

the the surcharge is expected to come into effect on April 28according to CNBC, and “will apply to all types of products, such as non-apparel, apparel, dangerous goods, and small and lightweight items.”

“In 2022, we expected a back to normal as COVID-19 restrictions around the world, but fuel and inflation have presented new challenges,” Amazon said in a memo, according to CNN. “It is unclear whether these inflationary costs will rise or fall, or for how long they will persist.”

Amazon did not immediately respond to a request for comment from McClatchy News on April 14.

Charges will only apply to US sellers who use Amazon Fulfillment Serviceswho handles receiving, packaging, shipping, customer service and returns for them, according to the company’s website.

About 89% of Amazon sellers use the company’s fulfillment services, according to a jungle scout report, a product finder

“Consumers are going to lose,” Dan Brownsher, who runs Channel Key, a Las Vegas-based e-commerce consulting firm with more than 50 clients who sell products on Amazon, told Bloomberg. “Amazon has already increased the fees in January, sellers will therefore have to raise prices.

The company had already implemented a 5.2% fee hike in January, according to the outlet.

In 2021, vendors paid $103 billion in fees, which was about 22% of Amazon’s revenueaccording to the Associated Press.

“Amazon continues to raise its fees on sellers who have to rely on its platform to take more money out of independent businesses’ pockets and into Amazon’s coffers,” Stacy Mitchell, co-director of the anti-monopoly group Institute for Local Self-Reliance, AP said.

Last year, Amazon took 34% of each seller’s sale – up from 19% in 2014, according to Bloomberg, with sellers now saying they will have to raise prices to keep up.

The company said it absorbed the costs as much as possible, according to AP, and “only increased the fee to meet ongoing costs and to be competitive with other vendors.”

Cassandre Coyer is a McClatchy national real-time reporter covering the Southeast while based in Washington DC. She is an alumnus of Emerson College in Boston and joined McClatchy in 2022. Previously she has written for The Christian Science Monitor, RVA Mag, The Untitled Magazine and Suite.

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