Amazon Introduces Fuel And Inflation Surcharges

Amazon has repeatedly raised its fees for sellers who have to rely on its platform.

To offset rising costs, on 13 April, e-commerce giant Amazon announced an additional 5% "fuel and inflation surcharge" on top of existing fees for third-party sellers using its logistics services.

The Seattle-based company said on its website that the additional charge, which will take effect on 28 April, will apply to both apparel and non-apparel categories and is "subject to change".

The new fee comes on the heels of an increase announced by Amazon in November last year, which took effect in January this year. Amazon did not respond directly to requests for details of the latest charges. However, in a notice sent to sellers on 13 April, Amazon said its costs had risen since the start of the new crown epidemic due to an increase in hourly rates, staff recruitment and new warehouse facilities.

Amazon said it was already absorbing costs as best it could and that the increase was to address permanent costs and to remain competitive. Both its rivals FedEx and UPS have already started imposing fuel surcharges.

In that notice, Amazon wrote: "In 2022, we expect to return to normalcy as the global lifting of the New Crown epidemic restrictions, however, fuel and inflation present further challenges."

Federal data released on April 12 showed that US inflation soared to 8.5 per cent in March, the largest increase in more than 40 years. Fuel prices have soared 48 per cent in the past 12 months.

Although Amazon blamed the extra charges on inflation and rising fuel costs, Tessie Mitchell, co-director of the Institute for Local Self-Reliance, an anti-trust group, criticised this, saying Amazon was taking the opportunity to raise prices.

Mitchell said, "For sellers who have to rely on its platform, Amazon has repeatedly raised its fees." He added that the new levies are designed to "put money in independent merchants' pockets and into Amazon's own pockets."

Amazon's third-party marketplaces make up a very large proportion of the company's business, with around two million independent merchants selling millions of items on the platform and accounting for more than half of Amazon.com's total sales.

Last year, these sellers paid Amazon about $103 billion, or about 22 per cent of the company's revenue. The online retailer said the new rates will apply to products pre-ordered before April 28 but shipped and delivered after that date. Amazon will also release its earnings report for the first three months of the year on April 28.

Amazon has long been criticised for curbing merchants on its platform and boosting its share of the site through "spike" campaigns or the launch of its own copycat products