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Amazon increases fees for small businesses

1-minute read

Sam Bromley

5 May 2022

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Some businesses that use Amazon to sell their products will be hit with an increase in fees from 12 May.

The increase will apply to businesses that use the Fulfilment by Amazon service.

Amazon is the latest online platform to increase its fees. Etsy sellers organised a ‘strike’ in April in protest against that platform’s new transaction fees, which increased from 5 per cent to 6.5 per cent.

Amazon increases fees to combat inflation

Fulfilment fees for Amazon’s Fulfilment by Amazon service are increasing by 4.3 per cent. In the UK, this will mean an average increase of 10p a unit.

The Fulfilment by Amazon service allows sellers to use Amazon’s warehouses to store stock. When a customer buys from the seller, Amazon then ships the product. The service means the customer can take advantage of faster delivery through Amazon Prime.

Amazon is calling the fee increase a ‘fuel and inflation surcharge’ designed to tackle rising costs following the coronavirus pandemic.

In a letter to sellers that use Fulfilment by Amazon, the company says that it’s created a surcharge because it’s not sure how long inflation will continue. This means that the surcharge may not be permanent.

Bumper profits for Amazon

In April 2021, the BBC reported that Amazon’s profits tripled during the pandemic, which drove many shoppers online.

Andy Jassy, Amazon’s global chief executive, said of the fee increase: “At a certain point, you can’t keep absorbing all those costs and run a business that’s economic.”

In 2020, Amazon passed on the government’s digital sales tax to sellers by increasing fees by two per cent.

Do you use Fulfilment by Amazon? Let us know in the comments below.

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