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I think the point is that Amazon is already taking a percentage cut. If there is inflation, the prices of the good would be raised by the seller and that automa

by jsnell 5y ago

I think the point is that Amazon is already taking a percentage cut. If there is inflation, the prices of the good would be raised by the seller and that automatically increased how much Amazon makes. Them increasing the size of the percentage-based cut suggests that the work Amazon does (logistics, selling access to the users' eyeballs) would be more sensitive to inflation than what the manufacturers and sellers do. Seems unlikely.

vorpalhex 5y ago
Gas is more expensive. FBA requires Amazon to buy gas to run trucks to perform fulfillment.
AnssiH 5y ago
This is not increasing the percentage-based cut (referral fee), this is increasing the fulfillment fee which is size/weight based.
- jsnell 5y ago
  Thanks! That'd be a lot more reasonable, it just isn't how the article reads. Is the official announcement somewhere? (I.e. what you're saying seems to be that for a $100 item that they charged $5 to ship previously, they will now be charging $5.25. Hard to complain about that.)
  - dwringer 5y ago
    Good question which had me slightly concerned for a moment; there's official documentation of the upcoming change here[0]. It does seem that this is only applied to "fulfilled by Amazon" products (and will not apply to third party sales shipped by the third party), and is an additional 5% of the existing fulfillment fee tacked on. An example they give is of a small, standard 6-oz package where the fee will increase from $2.92 to $3.07. [0]https://sellercentral.amazon.com/gp/help/external/GABBX6GZPA8MSZGW?language=en_US https://sellercentral.amazon.com/gp/help/external/GABBX6GZPA...
    - coding123 5y ago
      I think we wouldn't be clicking on this story if the original title reflected this.
ericmay 5y ago
> If there is inflation, the prices of the good would be raised by the seller and that automatically increased how much Amazon makes. I don't think that this is the case. If I sell XYZ product and my costs increased by 4% so I raise prices by 4%. Fuel costs for Amazon increased by 18%. The prices of the goods wouldn't necessarily offset what Amazon makes. And now you have to generalize this across all products they sell and all of their global logistical considerations...
dragonwriter 5y ago
> Them increasing the size of the percentage-based cut suggests that the work Amazon does (logistics, selling access to the users' eyeballs) would be more sensitive to inflation than what the manufacturers and sellers do. Seems unlikely. For fulfilment? That's extremely heavily dependent on three things: fuel, amortized vehicle costs, and labor. Major drivers of inflation before the invasion were tight labor market in the post-COVID rebound, vehicle costs, and fuel, and the invasion added further pressure on fuel, so, yeah, I’m going to say it's perfectly reasonable to expect that fulfillment costs have gone up in relation to finished consumer goods before fulfillment.
desiarnezjr 5y ago
This is common practice with most carriers like a FEDEX, UPS, post offices, etc. There's the contracted rate (or published rate for lower volume shippers) and then a "fuel surcharge" that's tacked on to offset the volatility of fuel and consumables. Usually it's lifted as market conditions change, though not always immediately as each company will often book fuel at a contracted price, even if higher to insure some price stability, so the surcharges don't match market conditions exactly. With logistics companies it's typically easier to identify the incremental surcharge, as at first glance they've blended it as fee increases.

by jsnell 5y ago

vorpalhex 5y ago

Gas is more expensive. FBA requires Amazon to buy gas to run trucks to perform fulfillment.

AnssiH 5y ago

This is not increasing the percentage-based cut (referral fee), this is increasing the fulfillment fee which is size/weight based.

jsnell 5y ago
Thanks! That'd be a lot more reasonable, it just isn't how the article reads. Is the official announcement somewhere? (I.e. what you're saying seems to be that for a $100 item that they charged $5 to ship previously, they will now be charging $5.25. Hard to complain about that.)
- dwringer 5y ago
  Good question which had me slightly concerned for a moment; there's official documentation of the upcoming change here[0]. It does seem that this is only applied to "fulfilled by Amazon" products (and will not apply to third party sales shipped by the third party), and is an additional 5% of the existing fulfillment fee tacked on. An example they give is of a small, standard 6-oz package where the fee will increase from $2.92 to $3.07. [0]https://sellercentral.amazon.com/gp/help/external/GABBX6GZPA8MSZGW?language=en_US https://sellercentral.amazon.com/gp/help/external/GABBX6GZPA...
  - coding123 5y ago
    I think we wouldn't be clicking on this story if the original title reflected this.

ericmay 5y ago

> If there is inflation, the prices of the good would be raised by the seller and that automatically increased how much Amazon makes. I don't think that this is the case. If I sell XYZ product and my costs increased by 4% so I raise prices by 4%. Fuel costs for Amazon increased by 18%. The prices of the goods wouldn't necessarily offset what Amazon makes. And now you have to generalize this across all products they sell and all of their global logistical considerations...

dragonwriter 5y ago

> Them increasing the size of the percentage-based cut suggests that the work Amazon does (logistics, selling access to the users' eyeballs) would be more sensitive to inflation than what the manufacturers and sellers do. Seems unlikely. For fulfilment? That's extremely heavily dependent on three things: fuel, amortized vehicle costs, and labor. Major drivers of inflation before the invasion were tight labor market in the post-COVID rebound, vehicle costs, and fuel, and the invasion added further pressure on fuel, so, yeah, I’m going to say it's perfectly reasonable to expect that fulfillment costs have gone up in relation to finished consumer goods before fulfillment.

desiarnezjr 5y ago

This is common practice with most carriers like a FEDEX, UPS, post offices, etc. There's the contracted rate (or published rate for lower volume shippers) and then a "fuel surcharge" that's tacked on to offset the volatility of fuel and consumables. Usually it's lifted as market conditions change, though not always immediately as each company will often book fuel at a contracted price, even if higher to insure some price stability, so the surcharges don't match market conditions exactly. With logistics companies it's typically easier to identify the incremental surcharge, as at first glance they've blended it as fee increases.