How worldwide fuel costs are impacting on Amazon fees
This week will see a rise in Amazon delivery fees as escalating fuel costs and inflation around the world begin to have an impact on the online giant.
Amazon told third-party sellers on Wednesday that it will be adding a five percent surcharge to its delivery fees. The move will take effect this week, Thursday April 28, and be applied to US sellers using the Fulfilment by Amazon programme. Amazon has stressed that the move is not intended to be either permanent or impact on consumers directly, but it is still a significant development for the Sellers affected.
An Amazon statement read: “In 2022, we expected a return to normalcy as Covid-19 restrictions around the world eased, but fuel prices and inflation have presented further challenges.
“It’s still unclear if these inflationary costs will go up or down, or for how long they will persist.”
Thompson and Holt managing partner Stuart White explained: “The new fee will be added to the per-unit delivery cost, not the overall price of the product. It is estimated that the average rise will be 24 cents per package.
“It only applies to deliveries made by Amazon and not other postal companies, and is one of a number of moves the company has made to try and combat the worldwide ecumenic situation. Others have included raising the price of Amazon Prime earlier this year.
“The impact of this on Sellers shouldn’t be underestimated. Every business around the world is dealing with rising costs and the fundamental fact that people are going to have less money in coming months due to rising fuel and energy costs.
“We have already been contacted by Sellers worried about the consequences of this move, and whether it will simply be the first of several cost increases to come in the future. That is impossible to predict, but what this does show is that even an e-commerce giant like Amazon is not immune to what is going on all around the world at present.
“There was a recent survey of 3,500 Sellers across the world conducted by Jungle Scout, and that revealed that 64 percent felt that rising costs was the biggest concern for their business this year. It’s an issue that is impossible to avoid, and it is one that will squeeze the margins of most Sellers as they aim to maintain competitive pricing without handing it onto the consumer.
“Our advice to Sellers in the current market, especially in the short-term, is to be more diligent than ever in monitoring and assessing every cost associated with your business, and ensure your financial records and position are updated regularly.
“As Amazon has pointed out, the current situation may not be permanent and may change for the better at some point. But it could also worsen before that happens, and being across every element of your Amazon business will allow you to react accordingly whatever the situation is in front of you.”
If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.