Amazon Levies New Fees on Third-Party Merchants

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If you’re going to sell with Amazon, you better sell with Amazon. Capiche?

Starting in October, the e-commerce boss will levy an additional fee on third-party merchants who choose to sell on Amazon without using its accompanying logistics and fulfillment service, according to reporting from Bloomberg.

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The new 2% fee for indie fulfillers is on top of the usual 15% commission already taken by Amazon, which itself is still just a piece of Amazon’s overall cut. Last year, for the first time ever, the e-commerce giant took more than 50% of third-party seller revenue through various fees and charges, according to a study by Marketplace Pulse. The new 2% dig is levied against merchants who use the Seller Fulfilled Prime service, a sort-of accreditation program that verifies consistently speedy third-party delivery — often used by merchants selling and shipping large items like sofas that can cause headaches when enmeshed in Amazon’s own warehouse systems.

According to Bloomberg, Amazon didn’t explain why the new fee is required, though several merchants told Bloomberg they interpreted the charge as a pressure campaign to sign up for the logistics service. Amazon did, however, tell Bloomberg that the new fees are set to cover the costs of maintaining indie fulfillers’ separate infrastructure. It’s a bit of a flex, given Amazon is gearing up for a major fight with the FTC over allegations it wields too much of its e-commerce market power over third-party sellers:

  • The FTC is already expected to claim that Amazon coerces third-party sellers into using its logistics services by rewarding those who do with higher search result placements and punishing those who don’t with buried listings, sources told Politico earlier this summer.
  • Overall, its third-party Seller Services segment generated over $32 billion in Amazon’s second quarter, up 18% year-over-year, and roughly $10 billion more than its Web Services, and with higher profits.

Prime Position: Make no mistake, Amazon is Gulliver among Lilliputians in the e-commerce space. The firm routinely accounts for nearly 40% of all US e-commerce sales, according to Insider Intelligence, which is roughly 6 times more than runner-up Walmart. That’s certainly enough to catch FTC Chair Lina Khan’s attention — and ire.