Amazon Slams FBA Sellers With New 5% Fuel and Inflation Surcharge Effective April 28
Amazon has announced it will implement a 5% “fuel and inflation surcharge” on top of its current Fulfillment by Amazon (FBA) fulfillment fee per-unit rates which it just raised in January.
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“In 2022, we expected a return to normalcy as COVID-19 restrictions around the world eased, but fuel prices and inflation have presented further challenges,” the company said in its announcement.
This fee will apply to all third-party sellers using the company’s fulfillment service Amazon FBA and will go into effect on April 28. The company also clarified that this charge will be based on when the shipment leaves their fulfillment centers, not when the product was ordered.
For example, if an order is placed on April 26 but doesn’t ship out until April 28, the shipment will be hit with the new surcharge.
Amazon Breaks New Ground With Surcharge Scheme
Amazon covers fuel expenses for its contract delivery partners. It uses a cashback scheme through its Amazon Flex Rewards Debit Card for Flex drivers to help with fuel costs and recently doubled that amount.
So, the company has been taking a hit on fuel prices, and apparently, this has made its management rethink how it will handle this significant expense in its fee structure.
By announcing this fuel and inflation surcharge, Amazon broke new ground on how it adjusts its selling fees for economic conditions which in the logistics sector are usually tied to fuel costs.
In its notice to sellers, the company explained:
“It’s still unclear if these inflationary costs will go up or down, or for how long they will persist. Rather than a permanent fee change, we will be employing a fuel and inflation surcharge for the first time—a mechanism broadly used across supply chain providers.”
While Amazon says it didn’t want to make a permanent fee change, it’s also important to look at what it didn’t say, that this surcharge is temporary.
The company’s wording doesn’t suggest the fee will go away at some point in the future (even if that is unknown right now) and that may be a new reality Amazon FBA sellers have to digest.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.