Amazon adds a fuel and inflation surcharge to the fees it charges sellers

Facing rising costs, Amazon said Wednesday it was adding its first “fuel and inflation surcharge” to the fees it charges sellers whose inventory it warehouses and delivers to customers, according to an announcement on its website.

The surcharge, which averages 5% of the current fulfillment fees, will take effect April 28.

In an email to sellers, the company said that as its costs have risen, including increased wages for workers and building more warehouses, it has “absorbed them, wherever possible, to reduce the impact on our selling partners” but that it had not anticipated the current spike in costs.

New federal data released Tuesday showed inflation hit 8.5% in March, the fastest 12-month pace since 1981. Gasoline was up 48% annually.

The company had announced fee increases in November that went into effect in January. On Wednesday, it told sellers that was not enough.

“In 2022, we expected a return to normalcy as COVID-19 restrictions around the world eased, but fuel and inflation have presented further challenges,” Amazon told sellers.

The company called a fuel surcharge a “mechanism broadly used across supply chain providers.” Fedex and UPS have fuel surcharges pegged to fuel cost indexes.

The majority of items customers buy off Amazon are sold by third-party sellers, who pay Amazon a referral fee for each sale and an additional fulfillment fee if they use the company’s warehousing and delivery services. While sellers do not need to use Amazon’s fulfillment services, it is the primary way the products are eligible for a “Prime” label, which promises fast shipping to customers and is a key driver of sales.

Sellers paid Amazon $103 billion in fees last year, about 22% of the company’s overall revenue.

Bloomberg News first reported the surcharge Wednesday morning, before the public announcement.