Amazon to Add ‘Inflation Surcharge’ for Merchants That Use Its Shipping Services

Don’t be surprised if prices for goods on Amazon go up slightly in the coming weeks. Inflation and rising fuel costs are causing the company to add a 5% surcharge on fees for merchants that use Amazon’s shipping services to send their products. 

The news was first reported by Bloomberg, which viewed a copy of an email Amazon is preparing to send to affected merchants. “In 2022, we expected a return to normalcy as Covid-19 restrictions around the world eased, but fuel and inflation have presented further challenges,” it says.

“It’s still unclear if these inflationary costs will go up or down, or for how long they will persist. Rather than a permanent fee change, we will be employing a fuel and inflation surcharge for the first time —a mechanism broadly used across supply chain providers,” the email adds.

The company has also quietly announced an upcoming “fuel and inflation surcharge” for businesses on a help page, which was spotted by merchants. The e-commerce giant is applying the 5% fee for US sellers, who use the Fulfillment by Amazon (FBA) service, starting on April 28.  

(sellercentral.amazon.com)

“The surcharge will apply to all product types, such as non-apparel, apparel, dangerous foods, and Small and Light items,” Amazon wrote in the notice, which also says that the “surcharge is subject to change.”

According to the current FBA fee structure, merchants can end up spending $2.35 to over $6 or more per shipped product, depending on the weight and size of the item. So in many cases, the inflation surcharge should only amount to 10 to 30 cents per unit. Nevertheless, many sellers are already starting to complain on the company’s forums.

“We will have to do less FBA then. We’re getting squeezed from every direction right now, and something has to give,” wrote one merchant. “Likely what this means is that lower margin items, which is about half of what we sell on Amazon, will be removed from Amazon.”

“How do you expect us to do FBA, then?” wrote another. “The fees were already too high. I’m already paying Fulfillment fee about $5 for an item that I sell for $9. Not even talking about other expenses.”

The surcharge arrives as the US Labor Department reported that inflation surged in March to 8.5% year over year, due to sharp increases in the costs for fuel, housing, and food.  

Amazon did not immediately respond to a request for comment. But in February, the company also increased the price for an Amazon Prime membership from $119 to $139 per year, citing the need to pay for rising wages and higher transportation costs.

The news coincides with a strike on Etsy, where sellers are protesting increased transaction fees.