Home » Amazon Adds Fuel and Inflation Surcharge for Sellers

Amazon Adds Fuel and Inflation Surcharge for Sellers

Facing rising costs, Amazon said on Wednesday that it was adding its first “fuel and inflation surcharge” to the fees it charges sellers whose inventory it warehouses and delivers to customers, according to an announcement on its website.

The surcharge, which averages 5 percent of the current fulfillment fees, will take effect on April 28.

In an email to sellers, the company said that as its costs had risen, including increased wages for workers and the construction of more warehouses, it had “absorbed them, wherever possible, to reduce the impact on our selling partners,” but that it had not anticipated the current spike in costs.

Federal data released on Tuesday showed that inflation hit 8.5 percent in March, the fastest 12-month pace since 1981. Gasoline was up 48 percent from a year earlier.

Amazon had announced fee increases in November that went into effect in January. On Wednesday, it told sellers that was not enough.

“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 company told sellers.

The company called a fuel surcharge a “mechanism broadly used across supply chain providers.” FedEx and UPS both have fuel surcharges pegged to fuel cost indexes.

Most items that customers buy off Amazon are sold by third-party sellers, who pay Amazon a referral fee for each sale and an additional fulfillment fee if they use Amazon’s warehousing and delivery services. While sellers do not need to use Amazon’s fulfillment services, it is the primary way the products are eligible for a Prime label, which promises fast shipping to customers and is a key driver of sales.

Sellers paid Amazon $103 billion in fees last year, about 22 percent of the company’s revenue.

Bloomberg News reported the surcharge earlier on Wednesday, before the announcement.

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