Amazon has added a five percent surcharge to sellers who have Fulfilment by Amazon US. This surcharge does not apply to sellers who do not use the service.
The move will result in the closure of many small businesses that sell on Amazon that have thin profit margins. Jeff Bezos founded the online giant in 1994 and currently serves as its executive chairman.
Amazon: “we are forced to add a 5% inflation surcharge and raise Prime prices”
Also Amazon: our profit tripled since pre-pandemic times, our founder is worth $190 billion (up $77B in the pandemic) and we just gave shareholders $10B in stock buybackshttps://t.co/iTPNT28RRj
— Dan Price (@DanPriceSeattle) April 15, 2022
Fulfillment by Amazon, or FBA, is a service that allows sellers of inventory to ship their products directly to Amazon warehouses across the country. They know that they placed an order on Amazon.com, and they receive an Amazon-branded box shortly after.
Why would an FBA seller choose self-fulfillment over FBA? Prime members pay $139 to get an FBA membership.
These are some statistics:
There are about 9.5 million Amazon Sellers worldwide.
73% of Amazon sellers use FBA.
Amazon’s 2021 net profit was $33.4 billion. This represents a 56.41% increase over the previous year.
It is obvious that Jeff Bezos and Amazon were not spared by this pandemic. Consider that FBA sellers must also pay additional fees.
— Siva Rajadurai (@sivadotblog) April 16, 2022
Amazon already charged Prime customers an extra $119 per month in February.
They raise fees on businesses and consumers when they have made huge profits in the past two years. The Nation’s February headline is
The dirty truth about inflation: Corporations are driving up prices and maximizing profits
Democrats fail to confront economic realities, and this could lead to them losing midterm elections.
Amazon is also accused of using third-party data to create rival products.
Amazon has been under scrutiny for antitrust violations and lawsuits over the years. This is because it has been accused of undercutting competition online. Amazon also stated in a July 2020 Congressional testimony that it doesn’t prefer its products to those made by third-party vendors.
We must not forget the increase in seller fees. Who are the victims? Small sellers who are struggling to survive will be the ones affected by the fees hikes. In the end, though, it will hurt you. Companies will pass the cost onto consumers and simply raise prices.
Shopping on Amazon is, without question, easy and convenient. But as so many of their moves in recent years show, this latest surcharge does seem intended to wipe out the little guy.