Online shopping giant Amazon is delaying its move to raise merchant fees until June of next year with charges for its Fulfillment by Amazon service being put on hold for now. The costs it charges independent e-commerce sellers to store and ship items should have risen in line with annual increases by other online sales hubs.
Announcing the decision in a blog post, Jeff Wilke, CEO of Amazon Worldwide Consumer said the company had made the decision due to the exceptional circumstances that have caused chaos for everyone, including e-commerce retailers over the last year.
The Fullfillment by Amazon service is used by businesses that need to store, pack and ship their products directly to customers. The logistics operation has been hugely beneficial for many companies, especially those prioritizing their e-commerce strategy during the pandemic.
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However, many merchants that have accounts with Amazon have expressed their disapproval at the way the online retail hub treats them. As well as paying for shipping costs independent retailers find that they are frequently having to spend extra money for additional advertising on Amazon in order to make their products stand out.
Rising costs
In more normal times Amazon usually announces its fee increases in December, which are subsequently rolled out the following year. Costs have gone up for the last four consecutive years. Earlier this year Amazon raised its shipping fees to 6.1%, up by 2.9% for smaller items while storage charges for goods held in Amazon’s warehouses increased by 8.7%.
Amazon has said that it will pause the rise in charges until June 1 and this will cover sellers in the US and Europe, along with those in Japan. In what has been an incredibly difficult year for business, e-commerce outlets have also been hit by rising courier charges, with both UPS and FedEx announcing a 4.9% increase on making package deliveries for 2021.
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