Amazon North America fees have been raised again, sellers: another increase!

Due to rising logistics and transportation costs, rising inflation and changes in consumption trends, not only sellers’ orders have been affected recently, but also the sales performance of major e-commerce platforms, including giants such as Amazon and Walmart. In order to offset part of the input costs, various e-commerce platforms have taken measures to "pass on the costs."

  Amazon North America fees have been raised again, sellers: another increase!

After Amazon’s US and European sites raised their FBA delivery fees in April, Amazon’s US site announced on the first day of June that it would adjust its logistics remote delivery fees on June 30.

Amazon said in the announcement that the adjustment was based on the reality of rising costs for delivery, transportation, warehousing and buyer services in North America. As for the adjustment range, Amazon also said that its increase is consistent with or lower than the average increase in the industry .

From the information that has been released, the adjustment fee of the Canadian site has changed less, while the change of the Mexican site is slightly larger. For small standard products, the delivery fee of less than or equal to 6 ounces in the Canadian site has increased from 7.22 Canadian dollars to 7.58 Canadian dollars, an increase of 0.36 US dollars. The delivery fee of the same small standard product of the same weight has increased from 102.39 pesos to 122.87 pesos, an increase of 20.48 pesos.

Although the increase varies, the cost of input for the relevant sellers has still increased. Some sellers said they have become accustomed to this. However, some sellers were very helpless and said: "Does this mean that the cost of each seller has increased again? It is already difficult to raise the price of the product, and now it has increased again."

In addition, some sellers believe that the platform should not increase fees anymore. The increased costs will eventually fall on the sellers, and the profit margins will continue to be compressed. Moreover, after the cost increases, large sellers have been hit, not to mention small and medium-sized sellers like them?

However, some sellers feel that the impact on them is not that great given the current situation, and they want to cherish the present and do their best. In fact, behind the helplessness of Amazon sellers about the increase in related fees, the problem reflected is not only the compression of seller space, but also the trend of the cross-border e-commerce industry returning to normal.

Under pressure from multiple factors, the fees of various platforms have been adjusted one after another

As the sellers said, it is not just Amazon that is difficult to do business with. In addition to Amazon, sellers on platforms such as Walmart, eBay, Shopify , and Etsy have also felt the pressure of rising costs.

Affected by the above factors, the performance of many e-commerce platforms in North America declined in the first quarter of 2022 due to rising costs. Amazon's first quarter saw its first decline in nearly five years, with a net loss of US$3.844 billion; Walmart's Q1 net profit was US$2.05 billion, a year-on-year decrease of 24.8% ; Shopify 's net profit in the first quarter was a net loss of US$ 1.5 billion ... In order to reduce or offset related costs, adjusting related service fees has become an inevitable choice.

In February this year , eBay raised some of its fees, and in April, Etsy raised its transaction fee from 5% to 6.5% (which later caused dissatisfaction among some sellers, who chose to close their stores in protest). Also in April, eBay also raised some fees in its seller service update plan. From the perspective of the increased fees, most of the adjustments are for shipping and online market fees, and other costs such as inventory and packaging materials have not yet been included in the adjusted fees.

The main reason for the increase in fees of such e-commerce platforms is changes in the overall market environment, which is manifested in "side effects" such as rising logistics costs, inflation, and the epidemic, and these influencing factors cannot be eliminated in a short period of time.

From the perspective of logistics costs, although the freight rates of many routes have fallen, the overall high sea freight rates have not changed. Industry insiders said that with the arrival of the peak season, the shipment volume has increased, and the freight rates of some routes may surge. According to data released by the Shanghai Shipping Exchange, the China Export Container Freight Rates Index is 3186.65 this period, down 0.1 from 3190.95 in the previous period. The US East and US West routes are 3017.27 and 2714.62 respectively.

In terms of inflation, according to public data, inflation in the European and American markets, which sellers mainly target, has hit new highs. The inflation rates in the United States from February to April were 6.4%, 8.5%, and 8.1%, respectively, and the inflation rate in the eurozone reached 8.1% in May. The rising prices have dealt a blow to the consumer confidence of local people. In addition, the changes in consumption trends in the epidemic era have also affected online and offline sales.

But this does not mean that the e-commerce platform will decline under this circumstance. On the contrary, after experiencing rapid growth during the epidemic, its sales model and development format are tending to stabilize and mature.

Amazon's dominant position is solid, but sellers are still dependent on it

Compared to the early days of the outbreak, the rapid growth of the cross-border e-commerce industry has slowed down. Sellers of different types and sizes have been impacted to some extent by the wave of account closures, rising shipping costs, exchange rate fluctuations, and changes in overseas consumption trends.

With their solid foundation, big sellers can maintain steady growth and even turn the tide. But for small and medium-sized sellers with weaker risk resistance, every change in the macro environment is a test for their company's survival. If they can survive this "reshuffle", there is hope for them.

The turmoil on the Amazon platform in recent years has also made some sellers realize that betting on a single platform and a single market is too risky. So these sellers began to look for other ways, trying to operate on multiple platforms and multiple markets, turning their attention to Walmart, Shopify , independent websites and some emerging markets (Southeast Asia, Latin America). In this way, while dispersing risks, it can also increase overall sales revenue.

However, due to differences in corporate scale and business strategies, multi-platform operations are not the same solution for all Amazon sellers. The main body of multi-platform layout is still dominated by top sellers, and most of them use Amazon as their main sales platform, such as Anker Innovations and Yibai Network. In 2021, Anker Innovations' revenue from Amazon accounted for more than half of its total revenue. Yibai Network's performance on Amazon now accounts for more than 90% of its profits.

In comparison, small sellers choose to only sell on Amazon due to their own financial resources and market uncertainty, and dare not try other platforms too much. One seller once said: "We all know that Amazon is difficult to sell on, but other platforms are not easy to sell on either."

It can be seen that judging from the overall situation and relevant data, Amazon is still the "favorite" of new and old sellers, and its dominant position in the e-commerce platform has not changed. Sellers will also have a long-term dependence on Amazon, but the degree will be relatively weakened.

Amazon North America

Costs, rising