Amazon Price Hikes Likely With New Fuel-Related Surcharge for Merchants

Don’t be surprised if you see price increases on Amazon in the coming weeks. The company is preparing to impose a temporary fuel-related surcharge on third-party merchants.

In a forum post, Amazon announced it’s adding a “3.5% fuel and logistics-related surcharge” on top of the fulfillment fees paid by its sellers. The announcement implies that rising fuel costs from the US-Iran war are to blame; the average price of a gallon of gas in the country now stands at $4, up from $2.99 a month ago. 

“Elevated costs in fulfillment and logistics have increased the cost of operating across the industry,” Amazon says. “We have absorbed these increased costs so far. However, similar to other major carriers, when costs remain elevated, we implement temporary surcharges on our fulfillment fees to recover a portion of the actual cost increases we are experiencing.”

The new fee takes effect on April 17 for the US and Canada, as well as for merchants shipping products to Canada, Mexico, and Brazil. Amazon argues that the extra charge is “meaningfully lower than surcharges applied by other major carriers.” Last week, the US Postal Service announced an 8% increase in postage prices, citing the rising transportation costs.

The announcement notes: “The surcharge will be calculated on your fulfillment fees, not on the sale price of your items. On average, this equates to $0.17 per unit for US FBA (Fulfillment by Amazon) or CAD $0.26 per unit for Canada FBA, though this will vary based on your item’s size and dimensions.”

Still, this also means the new fee will hit every kind of product. “Small fee changes do not stay small when scaled across an entire catalog,” wrote e-commerce strategist Julia Malachowski.

Tom Cochrane, CEO of e-commerce marketing agency Eleviam, added: “Average hit: $0.17 per unit. Sounds small. It’s not. If you’re shipping 10,000 units/month, that’s $1,700 in new costs.”

The new fee doesn’t bode well for product pricing on Amazon, given that the memory shortage has already been triggering price hikes for electronics. On Reddit, merchants mentioned needing to raise prices while also expressing concern that the surcharge would become permanent since Amazon didn’t say how long the new fee would remain in place. 

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