Amazon has become the latest company to reportedly raising its fees in order to contend with rising costs and global inflation.
The plans to increase Fulfillment by Amazon (FBA) seller fees during the holiday season, this is a move that will affect millions of traders who rely on the ecommerce giant to extend the reach of their brands to worldwide audiences.
For the three-month period spanning October 15, 2022 through January 14, 2023, third-party sellers will pay a hefty $0.35 fee for every item picked, packed, and shipped by FBA in the US and Canada.
Amazon fee rises
According to CNBC (opens in new tab), this temporary fee does not replace the existing costs, which vary by the size, category, and weight of items, further adding to the pressures that small businesses face during a particularly challenging period of the year.
An extract from an email sent to FBA merchants notes the decision comes as “expenses are reaching new heights.”
“Our selling partners are incredibly important to us, and this is not a decision we made lightly,” it adds.
Third-party sellers are a huge part of Amazon’s operations, with related revenue from streams like commission, fulfillment, and shipping fees up 13% year-on-year in Q2, to the sum of $27.4 billion.
This isn’t the first time Amazon has raised its fees, with the pandemic surge and the Russia-Ukraine war being just two of the factors to blame.
With other companies like UPS, FedEx, and the US Postal Service all hinting at holiday season price hikes, much like those of third-party merchants, Amazon’s own profit margins are feeling the strain.
In an interview with CNBC earlier this year, CEO Andy Jassy explained that “at a certain point, you can’t keep absorbing all those costs and run a business that’s economic.”