How will the Amazon fuel and inflation surcharge impact ecommerce marketers?
The rising costs of doing business is a huge pain point for many companies, but Amazon seems to be taking it head on. The company announced recently that they’re adding an extra 5% “fuel and inflation surcharge” onto their already steep fees third party sellers who use fulfillment services will have access too – this new charge applies only towards clothing items though so if your inventory includes any non-clothing products there’s no need worry!
Amazon has increased their fees in response to the Covid-19 pandemic. The company announced that it would be increasing hourly wages, hiring workers and constructing more warehouses following an increase of these costs because they are related with employees’ compensation as well as building projects which result from government requirements due at times like this where people need assistance getting medicine or food supplies quickly while also protecting themselves against infection.
Amazon has announced that they will be increasing their fees for shipping worldwide in an effort to stay competitive with other companies who charge fuel surcharges. The company said it expected these challenges would ease up by 2022 as restrictions on Covid-19 around the world loosened, but recent news about rising oil prices and inflation made things more difficult than ever before
Fees may go back down again soon though because there seems like no end in sight when you consider how much stuff people buy online every day.
Amazon is taking advantage of the moment. The surcharge for Amazon’s Prime service may be due to rising fuel costs, but Stacy Mitchell from Institute for Local Self-Reliance believes it could also have something do with inflation. The recent data released on Tuesday showed annual US inflation jumped past 8% and reached its fastest pace in more than 40 years – an increase she says can easily translate into higher prices at your local gas station too!
In a recent interview, Amazon seller Mitchell said that the company is increasing its fees on sellers who rely heavily of their platform. He claims this new charge will put more money away from small business owners’ pockets into those at amazon’s own expense; we’ll see how it goes when they release further details about what these changes entail soon enough!
The Amazon marketplace is a huge part of the company’s business. The independent sellers on this site have generated over $100 billion in revenue and account for 50% percent of all goods sold through amazon!
Last year, Amazon took in $103 billion from its customers and spent about 22% on fees. The online retailer said that new tax will be applied to products ordered before 28 April but shipped after this date, so if you want your order before then make sure it’s delivered by them.
The company has long faced accusations of undercutting merchants by creating knock-offs or very similar products and boosting their presence on the site.
July 6, 2022
About the Author:
Nick Uresin is the Founder and CEO of ArgoMetrix, a New York based software and consulting company established in 2013. Nick is an Entrepreneur, Electronics, Communications and Computer Science Engineer, who has a passion for problem solving with technology. Nick built an online retail company with annual revenues of over $10 million. He developed his vision to organize the knowledge and technology he developed to become a large Amazon Seller and provide it as a service to manufacturers and sellers of consumer products. Let's get social! Follow us and get ArgoMetrix's latest updates on Twitter, Facebook or LinkedIn.