Amazon to Impose New 2% Fee on Some Merchants
Amazon is reportedly set to impose a new fee on third-party sellers who do not use the company’s logistics services.
Starting in October, thousands of merchants who handle their own shipping will be required to pay a 2% fee on each sale in addition to the commission they already pay to sell products on Amazon’s platform, Bloomberg reported Wednesday (Aug. 16), citing company documents it viewed.
Amazon did not immediately reply to PYMNTS’ request for comment.
Company spokesperson Jonathan Hillson told Bloomberg: “We are excited to offer Seller Fulfilled Prime to sellers as a way to independently handle fulfillment of their products while also making those products available to Prime customers with fast, free delivery, great customer service and free returns.”
The latest fee has drawn criticism from sellers, particularly in light of a potential antitrust lawsuit against Amazon by the U.S. government, according to the report. The Federal Trade Commission (FTC) has been investigating Amazon for potential antitrust violations, and the timing of the new fee has caught many merchants and consultants off guard.
Many merchants believe the fee is a tactic to pressure them into using Amazon’s logistics services, rather than fulfilling orders independently, the report said.
Amazon, on the other hand, said the fee is necessary to cover the costs of maintaining a separate infrastructure and assessing its effectiveness, per the report.
The new fee specifically targets merchants who use Seller Fulfilled Prime, a service that allows them to handle logistics themselves while still displaying the Amazon Prime badge for expedited delivery, according to the report. These merchants often deal in bulkier items that are not well-suited for Amazon’s highly automated warehouses.
Merchants affected by the new fee are expressing concerns about the financial impact. Some interviewed by Bloomberg said it will significantly erode already slim profit margins, force them to raise prices, and require them to adjust inventory with short notice of only a few weeks, which poses a considerable challenge as the holiday shopping season approaches.
During Amazon’s quarterly earnings call Aug. 3, management noted third-party seller efforts and the initiative earlier this year to expand Buy with Prime. They said on the call that merchants in early trials who use Buy with Prime saw their shopper conversion increase by 25% on average.
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