Amazon's new seller fees criticized as a ‘Kick in the Gut'

Amazon.com Inc. merchants are facing significant economic pressure. Earlier this year, the e-commerce giant implemented fee changes, effectively transferring more operating costs onto the small businesses that constitute the majority of its product sellers.

Additionally, merchants are grappling with a trend of consumers opting for cheaper products across various categories in the first four months of the year, as reported by Adobe Inc. This shift towards lower-priced items makes it challenging for merchants to increase prices and maintain profitability online.

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.”