Amazon imposing fee on sellers who ship products themselves

BLOOMBERG

Amazon.com Inc is imposing a new fee on merchants who don’t use the company’s logistics services, a change many of these sellers consider coercive and surprising since the US government is poised to file an antitrust lawsuit against the e-commerce giant.
Thousands of third-party merchants who ship products via Amazon’s Seller Fulfilled Prime program will start paying a 2% fee on each sale in October, according to documents reviewed by Bloomberg. That’s on top of the commission — usually 15% — that merchants already pay Amazon to sell products on the popular web store.
Several merchants interviewed by Bloomberg interpreted the new fee as an attempt to pressure them into using Amazon’s logistics services rather than fulfilling orders themselves.
The company didn’t explain to sellers why the levy was required, but told Bloomberg it will help cover the costs of running a separate infrastructure and measuring its effectiveness.
Amazon has been accused of having too much power over the some 2 million merchants who use its platform, which captures about 37.6% of all online spending in the US, according to Insider Intelligence, or about six times more than its closest online competitor Walmart Inc. The Federal Trade Commission (FTC) is in the final stages of preparing an antitrust case against Amazon, and the timing of the new fee took some merchants and consultants by surprise.
“We’re sitting here waiting for the FTC to take action against Amazon for antitrust issues, and this fee shows Amazon is not scared at all,” said Jason Boyce, whose Avenue7Media helps about 100 businesses sell products online.
In recent years, Amazon has been ratcheting up fees on merchants, who typically pay for advertising and logistics to help maximise their sales. The business has become increasingly important to the company as sales growth in the core online operation slows. Seller services generated $32.3 billion in the second quarter, up 18% from the same period a year earlier and more than the profitable cloud services business. Last year, for the first time, seller fees began gobbling up about half the cost of each sale, making it harder for merchants to make a profit.
Amazon launched Seller Fulfilled Prime in 2015 as a way to expand inventory without overloading its fulfillment centres. It closed enrollment in the program a few years later saying merchants were having difficulty meeting Amazon’s delivery standards. Amazon in June announced it would again open enrollment for Seller Fulfilled Prime, a move the company saw as a way to appease regulators investigating it for antitrust issues, according to people familiar with the matter.
Amazon’s seller fees have been a focus of regulators and lawmakers since at least 2019.