Amazon is the latest company to reportedly raise its fees to combat rising costs and global inflation.
Plans to increase Fulfillment by Amazon (FBA) seller fees for the holiday season are a move that will affect millions of merchants who rely on electronic commerce giant to extend the reach of its brands to a global audience.
During the three-month period from October 15, 2022 to January 14, 2023, third-party sellers will pay a significant fee of $0.35 for each item picked, packed and shipped by FBA in the US and Canada.
Amazon’s fees are rising
In accordance with CNBC (opens in a new tab)this temporary charge does not replace existing costs, which vary according to the size, category and weight of items, further adding to the pressures faced by small businesses at a particularly challenging time of year.
An excerpt from an email sent to FBA merchants notes that the decision comes as “costs reach new heights.”
“Our sales partners are incredibly important to us, and we did not take this decision lightly,” the statement added.
Third-party sellers are a big part of Amazon’s operations, with related revenue from streams like commission, fulfillment and shipping fees rising 13% year-over-year in Q2 to $27.4 billion.
This isn’t the first time Amazon has raised fees, with the spike in the pandemic and the Russian-Ukrainian war being just two factors to blame.
With other companies such as UPS, FedEx and the US Postal Service hinting at price increases for the holiday season, as well as third-party merchants, Amazon’s own bottom line is feeling the strain.
In an interview with CNBC earlier this year, CEO Andy Jassy explained that “at a certain point, you can’t continue to absorb all these costs and run an economic business.”