Amazon is hitting third-party sellers with a first-ever holiday fee hike to offset surging costs
- Amazon is hitting US and Canadian third-party sellers with a holiday fee hike.
- The fee averages to about 35 cents per item.
Inflation is alive and well within Amazon's e-commerce kingdom.
So much so that the mega-retailer has instituted its first-every holiday fee increase for third-party sellers that use the company's Fulfillment by Amazon service, which lets Amazon choose, pack and ship items.
CNBC first reported Tuesday that Amazon told sellers in an email that it will charge an additional 35 cents per item for products sold in the US and Canada beginning October 14 and running through January 14.
Amazon subsequently confirmed the sent email to Insider.
While 35 cents an item doesn't sound like much, it amounts to a vast sum when one considers, as CNBC pointed out, that Amazon's third-party marketplace accounts for nearly half of all online sales. The access to the Amazon system is an integral part for many merchants that get a majority — or sometimes all — of their revenue through Fulfillment by Amazon.
Unfortunately for those sellers, the new holiday fee hike is another ratcheting-up of costs put in place by Amazon to cover higher expenses. In April, Amazon hit US sellers with a 5% fuel and inflation surcharge.
Amazon CEO Andy Jassy told CNBC in April, "At a certain point, you can't keep absorbing all those costs and run a business that's economic."
An Amazon spokesperson pointed out that such holiday-fee fulfillment fees are an "industry-wide practice" and have been for many years, noting that both FedEx and the US Postal Service have already announced similar fees for the holiday season.
As July's consumer price index report showed, inflation, while off its early-summer highs, is still very much a thing, with prices rising 8.5% from a year earlier. The fall in gas prices has been the big saviour, but they are still 44% higher than a year earlier.
Some economists are hopeful that supply-chain issues are closer to being resolved and that the drop in world commodity prices will eventually result in a fall in food prices.
- Culinary odyssey: Exploring Kochi's 10 famous cuisines
- Scientists have finally figured out what happened to the lost continent ‘Argoland’ that went missing 155 million years ago
- Revamp your health in 2024: 10 Essential food habits for a better life
- Consistent inflows push small-cap funds AUM past Rs 2 lakh cr mark in Nov
- Ola Electric aims to raise nearly Rs 5,800 cr via IPO, to file DRHP