During the busiest time of the sales calendar, Amazon sellers are likely to experience rising costs.
Amazon sellers who utilize FBA can expect an additional uptick in their expenses, according to a recent update in Seller Central. Amazon announced a 2022 Holiday Peak Fulfillment Fee for US and Canada FBA sellers that will take place from October 15, 20222, to January 14, 2023. On average, the fee will be an average of 35 cents USD per item.
In the announcement, Amazon cites increased operating costs throughout the supply chain during the peak holiday period as the culprit for the fee increase. It also states that while rising costs in the supply chain have always existed during the busy holiday season, Amazon previously absorbed the costs. Due to already rising prices in the market, the company decided to implement the timebound fee, almost literally passing the buck onto FBA users.
The notice states that Amazon’s fulfillment fees during this peak period will remain 30% less expensive for slower standard shipping methods when compared to other third-party logistics providers, and an average of 70% less expensive than comparable two-day shipping alternatives.
Perhaps most notably, UPS, FedEx and the United States Postal Service have also announced increased surcharges for roughly the same time period, which Amazon accurately stated is a regular occurrence for service providers supporting businesses and customers during the hectic holiday season.
Suffice to say, sellers utilizing the FBA program aren’t happy taking on elevated costs that eat away at profit. Nonetheless, there appeared to be a few different perspectives regarding the 2022 Holiday Peak Fulfillment Fee.
The change also marks the second time this year that sellers have been hit with an unforeseen fee, with the first being a 5% inflation surcharge in April due to rising fuel and inflation costs.
If the past couple of years has proven anything, it’s that the ability to adapt to market changes on the fly to overcome cannot be understated in the Amazon marketplace. As is the case with many aspects of life, the only constant in the Amazon marketplace is change, and the ones who can strategically conquer the conditions will be rewarded.
Will you be passing these costs on to the customer? Will your competitors? Depending on your product market and business accounting, you may want to consider making calculated changes to your business to mitigate or neutralize the effects of rising rates.
Take advantage of game-changing data provided by Viral Launch’s software to come out on top in your market. Tools like Market Intelligence and Competitor Intelligence allow you to observe your competition in the market, or zero in on specific ASINs to monitor their gameplans for approaching elevated costs.
As always, we highly recommend monitoring Amazon news and updates closely, as critical changes happen regularly, allowing you opportunities to streamline your business and emerge better than ever in your market to rake in the profits.
For more specific information on which aspects of the 2022 Holiday Peak Fulfillment Fee apply to your business, check out the following Seller Central resources to see how the upcoming changes will affect your business.