Earlier this year, the e-commerce giant rolled out changes to the fees its charges them — essentially shifting more of its operating costs onto the

Amazon’s New Fees on Sellers Likened to 'Kick in the Gut'

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2024-05-09 22:00:04

Earlier this year, the e-commerce giant rolled out changes to the fees its charges them — essentially shifting more of its operating costs onto the small businesses that account for most of the products sold on the site. Making matters worse for merchants, shoppers are trading down.

In the first four months of the year, American consumers have increasingly opted for the least expensive products in nearly all categories, according to a report released Thursday by Adobe Inc. That makes it harder to pass price hikes along to shoppers, and online merchants are struggling to make money.

Duncan Freer, who sells weighted blankets and sleep masks on Amazon, expects his profit margin to slide to 8% from 20% as a result of the new fees. One, imposed in March, charges a levy on shipments sent to the company’s fulfillment centers. That will drive the cost of shipping two pallets of Freer’s products to Amazon to more than $800, up four-fold from what it cost him in October, he said. Amazon reduced the cost of fulfilling each customer order, but Freer said it only partially offsets the new fees.

“Amazon just keeps grabbing more and more,” said the Chicago businessman, whose sales on the marketplace amount to about $500,000 a year. “It’s like a kick in the gut.”