Online retail giant Amazon announced last Wednesday that it will slap its sellers with an additional 5% fuel and inflation surcharge. This is on top of the regular fees Amazon charges its third party sellers.
Amazon’s Fuel and Inflation Surcharge To Take Effect By April
Amazon’s fuel and inflation surcharge will take effect in about two weeks. However, the company issued a disclaimer that the terms are subject to change. This is part of the notice the online retailer gave to its sellers.
“The surcharge will apply to all product types, such as non-apparel, apparel, dangerous goods, and Small and Light items. The surcharge will apply to all units shipped from fulfillment centers starting April 28,” it wrote.
As inflation continues to rise, Amazon said that it will now offset its own costs bypassing some fees to its sellers. This in essence is what its fuel and inflation surcharge will accomplish.
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However, Amazon already collects fees from sellers who use fulfillment services (Fulfillment by Amazon).
Businesses pay to store their inventories in Amazon warehouses. They also pay to use the retailer’s supply chain and shipping operations.
No Idea How High or How Long Inflation Will Go
As of 2021, around 89% of Amazon’s two million sellers avail of the FBA. This is according to Jungle Scout, a product research software maker for Amazon sellers.
According to an Amazon spokesperson, fuel and inflation are posing post-COVID challenges. “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 spokesperson added that it remains unclear how long inflation will last, or whether costs will go up and down. Instead of a permanent fee, Amazon will issue a fuel and inflation surcharge for the first time.
For now, it will charge 24 cents for the surcharge. This is below the UPS fuel surcharge of 42 cents and FedEx’s fee of 49 cents as of March 1. Amazon also claimed that this surcharge is “a mechanism broadly used across supply chain providers.”
US Inflation Running Wild As March Numbers Hit 8.5%
Inflation remains a major headache in the US. Fresh from a 6.9% inflation rate in February, the Bureau of Labor Statistics reported that March inflation hit a record 8.5%.
This means that prices of common goods and services are 8.5% higher than they were 12 months ago. The March inflation rate is also the highest inflation rate recorded since December 1981.
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Watch the Associated Press news video reporting that according to critics, Amazon is using inflation as an excuse to hike fees:
What do you think of Amazon’s decision to slap a 5% fuel and inflation surcharge on its sellers? Will this be something that sellers would protest? Or, will this eventually pass on to buyers as well?
Let us know what you think. Share your thoughts in the comments section below.