Third Party Sellers on Amazon May Have To Shell Out An Additional Fee - Here's Why

Amazon.com Inc AMZN is introducing a new charge for merchants who decide against availing of the firm's logistics offerings, especially when Amazon stands on the brink of an antitrust lawsuit from the U.S. government.

Amazon is poised to impose a 2% fee on the many third-party sellers who manage their shipping, set to begin in October, Bloomberg reports. 

This comes in addition to the 15% commission these merchants shouldering to sell their goods on Amazon's extensive online marketplace.

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According to merchants, the fresh fee is Amazon's tactic to coerce them into adopting its logistics services. Amazon termed it essential to offset the operational costs of managing a different infrastructure and evaluating its performance.

The e-commerce behemoth has faced criticism for wielding excessive control over its vast network of around 2 million sellers. The looming antitrust case by the Federal Trade Commission (FTC) against Amazon further amplifies the unexpected timing of this new charge.

Over the past few years, Amazon's fees exacted from merchants have steadily increased. These funds have become pivotal for Amazon, significantly as revenue growth from its primary online ventures decelerates. 

The second quarter saw the seller services raking in $32.3 billion, marking an 18% uptick from the previous year. This sum even surpassed their lucrative cloud services earnings. 

Interestingly, in the last year, nearly half of each sale's cost was consumed by these seller fees, pressuring the profitability margins of the merchants.

Targeting merchants enrolled in Seller Fulfilled Prime, the new fee targets those who oversee their logistics while still brandishing the Amazon Prime emblem, a signifier of rapid delivery. 

Typically, these sellers sell more oversized items, like furniture, that don't integrate seamlessly into Amazon's highly mechanized warehouses.

One office furniture seller revealed that the impending fee could cost his firm around $1 million annually, nudging them to elevate their prices. Another expressed that the payment, given the short notice before the holiday season, would severely impact their bottom line.

In 2023, Amazon tapped AI to drive its logistics, including transportation, where customers search for products on Amazon and to figure out where to place its inventory.

Price Action: AMZN shares traded lower by 0.71% at $136.69 on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.