The news: Amazon is adding a 5% fuel and inflation surcharge for sellers who use its fulfillment services, per CNBC, following in the footsteps of companies like Uber, FedEx, and Instacart.
- The fee will go into effect April 28, and applies to all product types.
- The surcharge will cost sellers 24 cents per unit.
What this means: This measure is guaranteed to annoy sellers, who already face high fees for transacting on the marketplace.
- According to some estimates, Amazon’s current share of every merchant sale is 34%—a steep price to pay even before the surcharge is added in.
- An Amazon spokesperson noted to CNBC that surcharges are “a mechanism broadly used across supply chain providers.” However, unlike Uber and Instacart’s surcharge, which customers shoulder, merchants on Amazon’s platform must pay the fee, making it likely that they will pass the cost onto the consumer in the form of higher prices.
- But shoppers may not be willing to stomach price increases: Some Amazon merchants told Bloomberg they’ve had to accept lower profit margins on certain items because customers refused to pay more.
- Amazon’s third-party seller services netted the company $103.37 billion in sales in 2021, almost as much as Target’s total revenues for 2021 ($106 billion).