Amazon adds 5% fuel, inflation surcharge for sellers


Amazon will begin charging sellers active on its platform an additional surcharge for fuel and inflation – a change implemented as the e-commerce giant and other major companies contend with surging operating costs.

The Seattle-based company said the 5% surcharge will take effect on April 28 and apply to sellers who use its “Fulfillment by Amazon” service.

The fee will likely contribute to higher prices for customers as sellers pass along the expense to the public.

Third-party sellers who use the program can store inventory at Amazon warehouses and use its shipping services. In a message to sellers, Amazon said the fee isn’t permanent and was “a mechanism broadly used across supply chain providers” – an apparent reference to other shipping services that have enacted similar fees.

“We have experienced significant cost increases and absorbed them, wherever possible, to reduce the impact on our selling partners,” Amazon said in the message, according to Reuters. “In 2022, we expected a return to normalcy as COVID-19 restrictions around the world eased, but fuel and inflation have presented further challenges.”

The surcharge could lead to higher prices for customers.
CQ-Roll Call, Inc via Getty Images

Businesses and American consumers alike are facing higher costs due to inflation – which surged 8.5% in March in what was the sharpest rate of increase since 1981. The gasoline price index rose 18.3% in March and is one of the key factors in the inflation surge.

Despite the surcharge, Amazon said its fulfillment program “continues to cost significantly less than alternatives.”

The company noted the fuel and inflation surcharge amounted to an average of 24 cents per unit – lower than surcharges implemented by UPS and FedEx, according to CNBC.

Fuel surcharges have become increasingly common among firms active in transportation or shipping services. Ride-sharing companies Uber and Lyft have each implemented gas fees in recent weeks to alleviate pressure on drivers.

Amazon trucks
Amazon said its fulfillment service is still cheaper than alternatives.
Bloomberg via Getty Images

Gas prices hit an all-time last month and are still hovering above $4 per gallon across the country, according to the latest data from AAA.

The steeping operating fees are just one source of pressure on Amazon and its partners. A nationwide labor shortage is adding to the pain for large and small businesses who are competing for workers with the national unemployment rate at just 3.6%.

Amazon has boosted its average starting hourly wage for warehouse workers to $18 per hour as part of its hiring effort. The company also reinstated a recruitment campaign for graduating high school students who are at least 18 years old, which was paused during the COVID-19 pandemic.

WIth Post wires



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