Amazon Adds 3.5% Fuel Surcharge for Third-Party Sellers

As the conflict with Iran continues and fuel prices rise, Amazon has decided to add a 3.5% fuel surcharge to all its independent merchants selling on its platform later this month, per The Wall Street Journal.

This fee, which is being called temporary, will take effect on April 17 and will affect many sellers who use Amazon warehouses and delivery services to store inventory and ship orders. 

Amazon is one of the latest companies to add fuel surcharges, like United Airlines, which has increased its checked-bag fee by $10. 

To this point, Amazon has been absorbing the cost.

Amazon Explains Fuel Surcharge Decision

“Elevated costs in fulfillment and logistics have increased the cost of operating across the industry,” Amazon said in a letter to sellers obtained by CNBC. “We have absorbed these increased costs so far. However, similar to other major carriers, when costs remain elevated, we implement temporary surcharges on our fulfillment fees to recover a portion of the actual cost increases we are experiencing.”

“But similar to other major carriers, when costs remain elevated, we implement temporary surcharges to partially recover these costs,” an Amazon spokeswoman said, per the Journal. 

In addition to United, UPS, and FedEx, USPS has also raised fuel surcharges, and as of April 26 and through January 17, USPS will add that to its rates, too. 

What Sellers Can Expect

While the charge will start on April 17, sellers using the Buy with Prime and Multi-Channel Fulfillment options will see the surcharge applied on May 2. 

Amazon has 2 million sellers, and the company also said its surcharge is “meaningfully lower than other major carriers” and would be based on the fulfillment fees it charges third-party merchants, not on the sale of items. In contrast, FedEx and UPS update their fuel surcharges weekly based on prices published by the US Department of Energy. 

According to the Journal, on average, the surcharge "amounts to an extra 17 cents per unit for sellers using the Fulfillment by Amazon option and varies based on the item’s dimensions," Amazon stated. 

From there, how much of those costs that are passed on to the consumer is up to the seller. 

There's no timeline for when this surcharge will end, if at all.