Amazon hiking third-party seller fulfillment fees for holiday season
Amazon's third-party marketplace accounts for more than half of the company's online sales
For the first time, Amazon is planning to hike its fulfillment fee for third-party sellers to help combat inflation during the holiday season.
The e-commerce behemoth will charge sellers in the United States and Canada an average fulfillment fee of 35 cents per item sold using Fulfillment by Amazon from Oct. 15 to Jan. 14.
"Our selling partners are incredibly important to us, and this is not a decision we made lightly. The entire industry sees increases in fulfillment and logistics costs during the holiday peak period due to the concentrated volume of shipments," Amazon explained in a Seller Central blog post Tuesday.
"We have previously absorbed these cost increases, but seasonal expenses are reaching new heights."
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMZN | AMAZON.COM INC. | 197.12 | -1.26 | -0.64% |
Amazon notes that its fulfillment fees during the peak period will remain an average of 30% less expensive for slower standard shipping methods than other major third-party logistics providers and an average of 70% less expensive than comparable two-day shipping alternatives.
In addition to fulfillment fees, third-party sellers are required to pay for a selling plan and referral fees, according to FBA's website.
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They may also be charged additional fees for long-term storage or optional programs like advertising or premium account services. For merchants using FBA, Amazon handles the process of picking, packing and shipping items.
Amazon's third-party marketplace accounts for more than half of the company's online sales. In its latest quarter, the company reported $27.4 billion in third-party services revenue. Overall revenue from its online stores fell 4% year-over-year during the quarter to $50.85 billion.
Amazon.com fulfillment center. Amazon is the largest internet-based retailer in the United States (iStock / iStock)
The latest hike comes after Amazon started charging sellers a 5% "fuel and inflation" surcharge in April. Earlier this month, the Labor Department reported that consumer prices rose 8.5% year over year in July, cooling slightly but still near the highest level in 40 years.
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In addition to Amazon, sending mail and shipping packages through the United States Postal Service could become more expensive during the holiday season. If approved by the Postal Regulatory Commission, a temporary price hike by USPS would go into effect at 12 a.m. CT Oct. 2 and remain in place until 12 a.m. CT Jan. 22.
The price increases, which would impact commercial and retail domestic competitive parcels sent through priority mail express (PME), priority mail (PM), first-class package service (FCPS), parcel select and USPS retail ground, could range from as low as 25 cents to as high as $6.50.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FDX | FEDEX CORP. | 299.90 | +4.58 | +1.55% |
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FedEx will add various surcharges between Sept. 5 and Jan. 15, ranging from as low as $1.50 per package to as high as $385 per package.
