Sellers Beware: Amazon is Increasing Fees For The Holiday Season

Lakeland, Florida, USA - October 15, 2018:   Amazon Fulfillment Center and distribution warehouse.
JillianCain / Getty Images

Amazon is passing on some inflation-related price increases to its sellers this holiday season.

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“As we look ahead and prepare for the busy holiday shopping season, we expect greater utilization of our fulfillment network. Across the supply chain, this creates increased operating costs during this holiday peak period,” the company announced.

In turn, Amazon will introduce a holiday peak fulfillment fee from Oct. 15, 2022, to Jan. 14, 2023, which will be an average of 35 cents per item sold using U.S. and Canada Fulfillment By Amazon (FBA). The Amazon statement said that while “this is not a decision we made lightly,” the entire industry “sees increases in fulfillment and logistics costs during the holiday peak period due to the concentrated volume of shipments.”

“We have previously absorbed these cost increases, but seasonal expenses are reaching new heights. As a result, we decided that similar to other carriers, we will implement a holiday peak fulfillment fee that applies during a timebound period each year,” according to the statement.

The company added that even with the increase, its fulfillment fees during this peak period “will remain an average of 30% less expensive for slower standard shipping methods than other major third-party logistics providers, and an average of 70% less expensive than comparable two-day shipping alternatives.”

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CNBC reports that Amazon’s third-party marketplace is pivotal to its e-commerce business, representing more than half of online retail sales. In addition, numerous retailers turn to Amazon to rely on its global reach and enormous customer base.

Amazon has been banking on that fact, seeing revenue from commissions, fulfillment, shipping fees and other charges increase 13% in the second quarter from a year earlier to $27.4 billion, CNBC adds.

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While carriers such as UPS and FedEx announce surcharges during the holiday shopping season, it’s the first time Amazon hiked seller fees for the holidays.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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