Amazon Wins And The Little Guy Loses

Inflation is at an all-time high — the highest it been since 1981. Consumers are struggling to survive, but large corporations always survive by passing on extra costs to merchant and consumers.

Amazon is one of the companies that have passed on inflation cost to consumers. Amazon will charge a 5% fuel and inflation fee on sellers that use its shipping service. The new charge is in addition to the 34% cut that Amazon takes from each merchant’s sale on its website. The result of this new charge will result in less profit margins for these merchants.

Amazon is not concerned about how it’s fee will affect merchants and consumers. It’s concerned about being competitive with other companies. Amazon excuse for their increase in fees: “Like many, we have experienced significant cost increases and absorbed them, wherever possible, to reduce the impact on our selling partners,” Amazon said. “When we did increase fees, we were focused on addressing permanent costs and ensuring our fees were competitive with those charged by other service providers.”

The result of Amazon fee will be a domino effect where merchants will raise prices to cover the 5% fuel and inflation fee, and consumers will pay higher prices for goods.