Chapter 1: What new logistics fees is Amazon adding starting April 17th?
I have some bad news for sellers. Amazon's going to be raising your fees yet again, and not in a way that anyone really expected. Amazon, as of April 17th, is going to be adding a 3.5% fuel and logistics-related surcharge for all fulfillment fees across Amazon US and Canada. This essentially is coming off of the backing of the fact that the U.S.
just eclipsed a $4 per gallon on average within the U.S. for gas. And so this is coming from the Iran war on average across the U.S.
Chapter 2: How does the 3.5% fulfillment surcharge affect sellers?
is 402 right now. So this is something that realistically we saw coming. Now, my major issue with this surcharge overall. They're saying on average, this equates to 17 cents per unit for U.S. FBA, 26 cents CAD for our pre-unit for Canada FBA. So one of the major things just looking at this, though, that I notice is they're saying that starting April 17th, it's a surcharge. Right.
but they're not talking at all about the aspect that this surcharge will lower at any point in time. They're saying due to the work we have already done together to lower costs, this surcharge is meaningfully lower than other major carriers. Awesome. They aren't talking at all here about the aspect that what happens if the Iran war clears up and gas prices go back down.
I find it very unbelievable that Amazon will get rid of this surcharge thereafter. So it is one of the things that I am worried about that this is a permanent surcharge. This is the type of thing that causes inflation at the end of the day, because companies like Amazon utilize situations where they know there is external factors causing this, and therefore they're going to tack on a new fee.
But when those factors go away, such as they did in 2022, when they raised and had a surcharge back in 2022, they never lowered that surcharge. And so this is a surcharge on another surcharge. And essentially, we're going to be stuck in this overall loop of Amazon just consistently raising prices for sellers. What does that do?
Raises the price for consumers and just squeezes margin at the end of the day. So this is not something I think anybody likes to see at the end of the day.
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Chapter 3: What external factors are driving the increase in Amazon fees?
17 cents on average doesn't seem like a lot, but if you're somebody selling a $10, $15, $20 product, 17 cents eats away slowly over time. It's one of those types of charges that you just don't realize is there until your profit margins are tanking. And so,
One of the first things that we're going to be doing here at My Amazon Guy is getting a report for every single one of our clients, understanding exactly where all of these surcharges are going to be hitting, who they're going to impact the highest, because that average of 17 cents, that takes everything from a $5 product all the way up to a $5,000 product, right?
And so those larger products, if you have a bulkier product, it's going to get hit harder with a surcharge like this, just because you already have a large and bulky fee. So...
i would take immediate stock of what your current average fba fulfillment prices are add 3.5 on top of that and then make sure to calculate your overall gross and net margins off of that so i'm hoping that this recovers fairly quickly i hope the iran war recovers fairly quickly and we get out of this and i'm hoping that amazon adds this as just a temporary surcharge rather than a long-term surcharge