Amazon hands 5% fuel and inflation surcharge on sellers

Amazon.com, Inc. announced plans to slap an average 5.00% fuel and inflation surcharge on existing fees it obtained from US merchants.

Accordingly, the additional fee will go into effect for all units shipped from fulfillment centers starting April 28.

In the stated case, the company will charge $0.24 per unit. It is below the UPS fuel surcharge of $0.42 and FedEx’s fee of $0.49.

Still, the e-commerce giant stated that the upward adjustment is subject to change.

The firm said in a notice that the higher charge would apply to all product types. This change will include non-apparel, apparel, dangerous goods, and small and light items.

The move is Amazon’s first surcharge due to the mounting costs in the industry. It followed months of elevated wage and labor-related expenses that have chipped away at the online retailer’s profit.

With the soaring inflation, the Big Tech firm exerts efforts to offset several constraints by levying fees on sellers.

Previously, it collected charges from merchants who use Fulfillment by Amazon (FBA). Dealers pay to have their inventory stored in the warehouses, using the firm’s supply chain and shipping operations.

89.00% of the 2.00 million-plus sellers used FBA last year, which also creates product research software for sellers.

Initially, the business anticipated 2022 to return to normal as COVID-19 restrictions around the world eased.

However, fuel and inflation have presented further challenges. The US consumer prices surged to 8.50% in March, the fastest pace in more than 40 years. Then, gasoline costs have rocketed 48.00% in the past 12 months.

In line with this, it is still unclear if these inflationary costs will continue to persist. The global market is still on edge as Russia’s invasion of Ukraine imposed further conflicts.

Amazon’s IMDb TV rebrands to Freevee

Meanwhile, on the same day, Amazon will rebrand its free-to-stream service from IMDb TV to Freevee on April 27.

In recent years, the ad-supported platform has caught fire, picking up momentum during the coronavirus health crisis. Its competitors include Paramount Global’s Pluto TV, Crackle, Tubi, and the in-house channel from Roku.

Consequently, paid subscription services still dominate the streaming space, but free offerings also gain ground. Last year, 34.00% of American households with video streaming capability utilized ad-supported streaming services.

IMDb, which Amazon bought in 1998, launched the free-to-stream service in 2019 under IMDb Freedive. The tech titan said that the product had seen massive growth, tripling its monthly active users over the past two years.

Furthermore, the company anticipates increasing Freevee’s original TV and movies roster later this year.