The online giant is countering slow sales growth by increasing fees.

 

Merchants on Amazon Marketplace are paying the company a commission fee of more than 50 per cent of each sale. 

 

A new report by Marketplace Pulse revealed Amazon raised the total cost sellers are required to pay out toward storage fees at company warehouses, packaging and delivery, and advertising on the site. 

 

Paying Amazon for logistics services and advertising is optional, but most merchants consider these a necessary part of doing business.

 

Sellers have been paying Amazon more per transaction for six years in a row, according to Marketplace Pulse, but were able to absorb the increases because the company was attracting new customers and rapidly increasing sales. 

 

That situation changed when pandemic lockdowns eased and people began traveling and dining out again, sucking the oxygen out of online shopping. Last year, Amazon generated the slowest sales growth in its history.

 

Consumers are far more deal-conscious than they were during the pandemic, so Amazon merchants are loath to raise prices. That reality, along with the steady increase in fees, means many sellers are struggling to make money—prompting some to handle shipping themselves and to spend less to advertise on Amazon’s site.

 

“For these small businesses, it’s getting harder and harder to be profitable because they are spending more and more money on Amazon fees,” Juozas Kaziukenas, Marketplace Pulse’s founder and chief executive officer, said.