Amazon to Hike Third-Party Sellers Charges Again by Adding Holiday Fee

Amazon noted the holiday season increases fulfilment and logistics costs due to the volume of shipments being transported.

Amazon to Hike Third-Party Sellers Charges Again by Adding Holiday Fee

Photo Credit: Facebook/ Amazon

Amazon added a 5 percent “fuel and inflation” surcharge to offset rising gas costs and inflation in April

Highlights
  • This is the second fee hike imposed on merchants this year by Amazon
  • Merchants have to pay a fee to use Amazon's fulfillment services
  • Amazon said it previously absorbed logistics costs cost increases

Amazon is raising charges on third-party sellers again — this time adding a holiday fee for merchants who use the company's fulfillment services to pack and ship items to customers.

From October 15 to January 14, sellers will be hit with an average fee of $0.35 (roughly Rs. 20) per item sold using Amazon's fulfillment services in the US and Canada, according to a notice the company sent to merchants Tuesday.

It's the second fee hike imposed on merchants this year by the online retail behemoth. In April, the company added a 5 percent “fuel and inflation” surcharge to offset rising gas costs and inflation, which is running close to its highest level in four decades.

To use Amazon's fulfillment services, merchants already have to pay a fee that varies based on an item's size, weight or category.

In the notice sent Tuesday, Amazon noted the holiday season increases fulfillment and logistics costs due to the volume of shipments being transported. The company said it previously absorbed these cost increases. But seasonal expenses were now “reaching new heights," it said.

“Our selling partners are incredibly important to us, and this is not a decision we made lightly,” the company said.

CNBC first reported on the hike in fees.

Holiday pricing adjustments are not novel to Amazon. Last week, the US Postal Service said it filed a notice to implement a temporary price hike to cover extra handling costs during the holiday season.

But at Amazon, seller fees — and their repeated increases — are a subject of contention since the company controls a vast share of the e-commerce market. Critics argue the company's excessive fees could potentially lock out merchants from its marketplace.

“Corporations that have monopoly power tend to raise prices, and that's what we're seeing here,” said Stacy Mitchell, an Amazon critic and co-director for the anti-monopoly group Institute for Local Self-Reliance. “Amazon's dominance of the online market means that small businesses have little choice but to pay up.”

Last month, Amazon's Chief Financial Officer Brian Olsavsky said during a media call that third-party sellers represented 57 percent of total units sold on Amazon during the three-month period that ended June 30, the highest in the company's history.

The Seattle-based company's second-quarter earnings report also showed total revenue Amazon collects third-party sellers had jumped 13 percent compared to the prior year, while revenue from its own retail business had declined by 4 percent.


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