Here's How Amazon Passed On Rising Fuel Costs, Inflation To Its Sellers

  • Amazon.com Inc AMZN introduced a 5% surcharge to its delivery fees to shift the burden of the rising fuel costs and inflation, the Financial Times reports based on Amazon’s third-party sellers.
  • Amazon will add the fee to the per-unit delivery cost implying the cost to deliver a T-shirt would rise from $5.07 to $5.32, up by $0.24 per package.
  • The fee, effective April 28, will be applied to U.S. sellers using Amazon’s logistics network to deliver products, known as Fulfillment By Amazon. 
  • The fee will neither be permanent nor will it be passed on to consumers directly. 
  • The third-party seller products accounted for 56% of units sold on Amazon in the most recent quarter, FT notes.
  • MWPVL suggested that Amazon send 3.25 billion packages from third-party sellers to U.S. customers via Fulfillment in 2021.
  • Experts do not see the third-party sellers passing the incremental costs to the customers at the risk of hindering their competitiveness.
  • Previously, Amazon hiked the annual price of its Prime membership from $119 to $139 to offset the rise in wages and transportation costs in its logistics network.
  • Price Action: AMZN shares traded lower by 0.09% at $3,108 premarket on the last check Thursday.
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