It’s getting more expensive to sell on Amazon, at least, that’s how Meaghan Thomas, co-owner of Pinch Spice Market, feels.
Thomas and his partner, Thomas McGee, started a direct-to-consumer retailer selling organic spices in 2012 and said selling on Amazon helped them reach customers they wouldn’t have been able to reach if they just used their website.
But after Amazon added a 5% “fuel and inflation” surcharge in April, and announced Tuesday that it will charge sellers using Fulfillment by Amazon (FBA) an additional 35 cents per product sold during the holiday season, Thomas feel fed up
“We’re literally growing our business out of our own pockets and we’ve been doing it for 10 years, and it’s been growing, we’re doing well, but these kinds of hits just completely gut us,” Thomas said. Entrepreneur.
“I think a lot of us small to medium marketers are tired of this, but what are we going to do?” he added.
Amazon told sellers in an email Tuesday that it would charge third-party sellers using FBA an extra 35 cents per item, from Oct. 15 through Jan. 14, according to CNBC. It will depend on the weight, the dimension and the category, added the medium.
With FBA, Amazon ships your products for you, but it’s almost impossible to be an Amazon Prime seller, which is huge for sales, without using FBA, says Eli Coen, CEO of Lero, an Amazon consultancy that help sellers.
This is the first time Amazon has done this, but it’s typical for companies like UPS and FedEx to add holiday surcharges, according to CNBC and USPS filing last week.
“Everyone is freaking out,” Coen said, referring to his Facebook seller group.
The worst part, he said, is that the policy will be in place every holiday season, according to the email he received from Amazon announcing the change, a screenshot of which was seen by Entrepreneur. (Also sells on Amazon.)
“We have decided that, like other carriers, we will implement a Holiday Peak Compliance Fee that applies for a period of time each year,” the email read, according to the screenshot.
His advice to businesses: “I think the best advice is to raise prices if you can,” he said.
The holiday season is one of the busiest for Amazon, known as “peak.” In another peak season, Amazon Prime Day, a warehouse worker died in New Jersey, with The Guardian reporting that warehouses have high injury rates and that workers view conditions as stressful and unsafe.
Amazon said in the email that it is adding the surcharge because “expenses are reaching new heights,” according to CNBC.
“Our sales partners are incredibly important to us, and this is not a decision we make lightly,” Amazon reportedly added in the email.
Thomas estimated that based on the October-January 2021 sales of one of his downstream vendors, a Ras El Hanout organic spice mix, this 35-cent markup will cost them about $18,725 more than last year, assuming a product sells as much. same. this year like last year.
Thomas added that he has been trying to unplug his business from Amazon for years and says it is working; two years ago, it accounted for 41% of their sales, and this year it’s 32%, he said. He writes recipes online, shares them on social media, works with the site’s SEO, and keeps trying to refine the products to drive organic traffic.
But she doesn’t plan to pass prices on to consumers, arguing that corporations that raise prices are contributing to inflation, as some critics have said, according to USA Today. Analysts have estimated that she will add millions in revenue for Amazon, according to Barron’s.
“We think companies are overly critical of people raising prices and we don’t want to be part of the problem,” he said.
“I think instead of inflation we’re seeing corporate greed right now,” he added. “It seems really unethical.”