Amazon.com Inc. packages sit in entrance of a FedEx Corp. supply truck in New York.
Christopher Lee | Bloomberg | Getty Images
In its newest effort to deal with hovering inflation, Amazon is planning to raise fulfillment fees throughout the vacation season, passing off a few of its elevated prices to the thousands and thousands of retailers who depend on the website to promote their merchandise.
Starting Oct. 15, and working by Jan. 14, third-party sellers who use Fulfillment by Amazon, or FBA, can have to pay 35 cents per merchandise offered in the U.S. or Canada, the firm mentioned Tuesday in an e mail to sellers. For retailers utilizing FBA, Amazon handles the technique of selecting, packing and delivery gadgets.
The vacation payment comes on prime of present prices that sellers pay for utilizing FBA companies. Those prices fluctuate relying on an merchandise’s dimension, class and weight.
Amazon mentioned it is implementing an added vacation surcharge for the first time as “expenses are reaching new heights,” making it tougher for the firm to take in prices tied to the peak procuring season.
“Our selling partners are incredibly important to us, and this is not a decision we made lightly,” Amazon mentioned in the e mail.
Amazon’s third-party market has grow to be the centerpiece of its dominant e-commerce enterprise, because it now accounts for greater than half of on-line retail gross sales. Because of Amazon’s international attain and big buyer base, many retailers depend on the firm for the majority, and in some instances the entirety, of their enterprise.
Amazon has been cashing in on that leverage. Revenue from third-party seller companies, which incorporates commissions collected by Amazon, fulfillment, delivery fees and different prices, rose 13% in the second quarter from a yr earlier to $27.4 billion. Amazon’s whole ecommerce income declined 4% throughout the identical interval.
Sellers fees have already been going up this yr as Amazon manages by larger prices tied to inflation, provide chain constraints and the struggle in Ukraine. Amazon’s bills additionally jumped due to speedy hiring in warehouses to meet a pandemic-driven surge in e-commerce demand.
“At a certain point, you can’t keep absorbing all those costs and run a business that’s economic,” CEO Andy Jassy told CNBC in an interview in April.
Major carriers like UPS and FedEx usually announce surcharges throughout the vacation procuring season. Last week, the U.S. Postal Service requested a brief value hike for the holidays to assist cowl further dealing with prices.