Topline
Amazon said on Wednesday it is imposing a “fuel and inflation surcharge” of 5% on online sellers who use its fulfillment services for product storage and deliveries, effective April 28.
Amazon said on Wednesday it is imposing a “fuel and inflation surcharge” of 5%.
Key Facts
The surcharge will be applied to fees that merchants pay to store their products and have their products delivered to customers, and the surcharge is subject to change, according to its website.
Amazon said in a memo sent to sellers Wednesday that it tried to offset “significant cost increases” stemming from hiring 750,000 employees and raising wages for Amazon warehouse employees from $15 to $18 an hour, among others, before imposing the latest surcharge, Bloomberg reported.
Amazon generated 22% of its revenue, or $103 billion, from fees paid by third-party sellers last year, the New York Times reported.
Logistics consultancy MWPVL estimated Amazon shipped around 3.3 billion packages from sellers who use its fulfillment services to U.S. customers last year, the Financial Times reported.
Key Background
Inflation rose 8.5%—the fastest pace in four decades— in the 12 months ending in March, the Labor Department said Tuesday. Energy prices have jumped following Russia’s invasion of Ukraine that began in late February. The national average prices of gas came in at $4.083 a gallon as of Wednesday, according to the American Automobile Association. Several companies including ride-hailing apps Uber and Lyft and grocery delivery service Instacart have slapped additional fuel surcharges.
Tangent
To contain the spike in energy prices, President Joe Biden said Tuesday the Environmental Protection Agency will allow sales of gasoline that consist of 15% ethanol, or E15, between June and September, saying the blend is “about 10 cents a gallon cheaper.” Sales of E15 is banned in the summer due to concerns it creates more smog. The White House said in late March the United States will release 1 million barrels of oil per day from the Strategic Petroleum Reserve over six months, marking its largest-ever release, starting in May.
Further Reading
Amazon Adds 5% Fuel and Inflation Surcharge for Its Sellers (Bloomberg)
Inflation Hits 40-Year High—Spiking 8.5% In March As Ukraine Invasion Fuels Oil Prices (Forbes)
Lyft follows Uber in adding fuel surcharge for riders because of surging gas prices (CNBC)
Source: https://www.forbes.com/sites/lisakim/2022/04/13/amazon-adds-a-5-fuel-and-inflation-surcharge-for-sellers/