Amazon sellers panic over holiday supplement

Amazon sellers panic over holiday supplement

Amazon sellers panic over holiday supplement

It just keeps getting more expensive to sell on Amazon — or so Meaghan Thomas, co-owner of Pinch Spice Market, feels.

Thomas and his partner, Thomas McGee, launched a direct-to-consumer retailer selling organic spices in 2012, and said selling on Amazon helped them reach customers they couldn’t have on their site alone. website.

But after Amazon added a 5% “fuel and inflation” surcharge in April and announced on Tuesday that it would charge sellers who use Fulfillment by Amazon (FBA) an additional 35 cents per product sold during the holiday season, Thomas en fed up.

“We’ve literally grown our business out of our own pockets and have been for 10 years, and it’s growing, we’re doing well, but that kind of success completely guts us,” Thomas said. Entrepreneur.

“I think a lot of us small to medium-sized sellers are fed up, but what are we going to do,” she added.

Amazon told sellers in an email Tuesday that it will charge third-party sellers who use FBA an additional 35 cents per product from Oct. 15 through Jan. 14, per CNBC. This will depend on weight, dimension and grade, the outlet added.

With FBA, Amazon ships your products for you, but it’s nearly 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 helps sellers.

It’s the first time Amazon has done this, but it’s common for companies like UPS and FedEx to add holiday surcharges, according to CNBC, and the USPS asked last week.

“Everyone is falling apart,” Coen said, referring to his Facebook seller group.

What’s worse, he said, is that the policy will be in place every holiday season, based on the email he received from Amazon announcing the change, including a screenshot. was seen by Entrepreneur. (It also sells on Amazon.)

“We have decided that, like other carriers, we will implement a vacation peak run fee that applies for a limited time each year,” the email reads, according to the screenshot. .

His advice to businesses: “I think the best advice is to raise prices if they can,” he said.

The holiday season is one of the busiest for Amazon, known as the “peak”. During another busy season, Amazon Prime Day, a New Jersey warehouse worker died, and The Guardian reported that warehouses had high injury rates and workers viewed conditions as stressful and dangerous.

Amazon said in the email that it was adding the supplement because “spending is reaching new heights,” according to CNBC.

“Our business partners are extremely important to us, and this is not a decision we took lightly,” Amazon reportedly added in the email.

Thomas estimated that based on October-January 2021 sales of one of their middlemen, an organic Ras El Hanout spice blend, this 35-cent surcharge will cost them about $18,725 more than the year. last, assuming a product sells the same this year as last year.

Thomas added that she’s been trying to wean her business off of Amazon for years, and she says it’s working; two years ago it was 41% of their sales, and this year it’s 32%, she said. She writes recipes online, shares them on social media, works with site SEO, and continues to try and refine products to drive organic traffic.

But she does not plan to pass prices on to the consumer, arguing that companies raising prices contribute to inflation, as some critics have said, according to USA Today. Analysts estimated it would add millions in revenue to Amazon, according to Barron’s.

“We think people are being criticized too much by companies raising prices and we don’t want to be part of the problem,” she said.

“I think instead of inflation, we’re looking at corporate greed right now,” she added. “It seems really unethical.”

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