Amazon to Add 5% Fuel & Inflation Charge For Sellers – Will That Impact Your Cost?
With the U.S. inflation rate accelerating to 8.5% in March — the highest since December of 1981 — and energy prices increasing 32% as Russia’s invasion of Ukraine pushed crude oil prices higher, Amazon has announced it will begin levying a 5% “fuel and inflation surcharge” to sellers.
This is the first time in the e-commerce king’s history that it has charged sellers a surcharge of this kind, and it applies to all product types, including “non-apparel, apparel, dangerous goods and Small and Light items,” according to a notice to sellers. The new tax will begin April 28, the same week Amazon is expected to report its earnings from the first three months of 2022.
The 5% “fuel and inflation surcharge” only applies to third-party merchants who use Fulfillment by Amazon (FBA) services. Merchants who use the FBA service — which stores, packs and ships their goods — already pay seller fees. In November, Amazon announced FBA fees were going up “to partially offset the higher permanent operating costs we face going forward.”
Sellers that do not use FBA will not be impacted.
In a company memo issued to CNN, Amazon wrote, “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 is unclear if these inflationary costs will go up or down, or for how long they will persist, so 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.”
Amazon has over 2 million sellers and approximately 90% of them use its FBA service. In financial circles, the smart money is on sellers passing this new surcharge on to their customers.
However, Jon Elder, CEO and founder of Black Label Advisor, told Business Insider it should only be a “slight increase in prices” for consumers.
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