Friday, January 27, 2023
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Amazon Announces New 5% Bidenflation Fee

'Consumers will lose... '

(Tony Sifert, Headline USA) Amazon has announced a plan to charge third-party sellers who use Fulfillment by Amazon a 5% “fuel and inflation surcharge,” beginning April 28, according to the Associated Press.

“In 2022, we expected a return to normalcy as COVID-19 restrictions around the world eased, but fuel and inflation have presented further challenges,” an Amazon spokesman told CNBC. “It is still unclear if these inflationary costs will go up or down, or for how long they will persist.”

Amazon issued its fourth quarter financial results in early February, and CEO Andy Jassy commented on the effect that both inflation and the supply chain crisis were having on the company.

“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron,” Jassy said.

Amazon’s action was immediately criticized by small business and consumer advocates.

“Consumers will lose,” e-commerce consultant Dan Brownsher told Bloomberg. “Amazon already raised fees in January, so sellers will have to raise prices.”
Stacy Mitchell of the Institute for Local Self-Reliance suggested that the surcharge had antitrust implications.
“[The surcharge] has the potential to be problematic when it comes to antitrust because Amazon locks you into using this service,” Mitchell said.
“It’s absolutely an antitrust vulnerability for Amazon, because that’s what monopolies do is they corner the market and raise prices.”
“Amazon keeps increasing its fees on the sellers that have to depend on its platform,” Mitchell said. “[T]o take more money out of the pockets of independent businesses and put it into Amazon’s coffers.”
The Biden administration has had no difficulty blaming oil and gas companies for skyrocketing gas prices, and it remains to be seen how the White House — which has openly supported Amazon warehouse workers in their efforts to unionize — will respond to Amazon’s move.
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