Amazon adds 5% ‘fuel and inflation surcharge’ to seller fees
apnews.com
apnews.com
I wish journalists would stop simply reprinting intentionally misleading company spin like this without any attempt to refute it. Fuel costs are one of the least sticky price increases imaginable and are already decreasing after they peaked last once. Plus no one knows what inflation will be like in a year. There is nothing close to permanent about these cost increases.
The most charitable interpretation of these comments is that past increases were only because of permanent issues and this new surcharge represents a change in that policy. However if that is the case, this comment should more clearly denote that change and explain why this temporary increase is different and requires a change in policy.
I hate it - I don't CARE where the money is going, just charge me the price and don't try to pretend that various "fees" are affecting it. It's bad enough with listing various taxes, but made up "surcharges" are just accounting trickery.
If you want $250 a night, then list $250 a night. Don't try and pull a fast one with some bullshit fees at the checkout.
People often lament the lack of practical training for things like personal finance and media literacy in schools. We should add consumer awareness to that list. We are raising kids to become obedient little consumers.
This just sets up Amazon to charge a flat fee while they lower their costs and reap all the benefits.
The goal isn't to dupe them by falsely advertising lower prices, it's to get them to support lower taxes on your business.
Likewise, it's anti-big-government politicians that want to keep sales tax separate in America.
And weirdly it's the same right-wing guys in each country including the tax in Chile and breaking it out in US. In USA of course they want the citizens to hate taxes because taxes in USA support democracy, and they figure by making it a painful hidden cost they will get me, for instance, to hate taxes instead of putting them first. And I did in fact hate them when I visited, the trick worked on me, despite being an excellent math student.
In Chile, it's because the state needs money from somewhere for concrete, courts and cops (the three things right-wing guys actually think taxes are good for) and also for incredibly shitty orphanages and "albergues" whose purpose is be able to construct arguments around that there are in fact already orphanages and "albergues" to deny real assistance...So they have regressive taxes, mostly paid for by VAT. So poor people and to a lesser extent the middle class don't protest that they're the tax base, they hide the tax. And in fact if you look at fancy magazines like Ed, an interior design magazine in Chile, they do break out the tax to communicate that you can get out of paying it, tee hee, or split it with the seller, on a $4000 USD Ottoman.
It's more that if you're not a child you're almost never spending the exact full contents of your wallet.
It also incentivises longer stays, which is obviously in they interests to make it disproportionate, so I'm not saying that there's no ulterior motive, but it's not axiomatically unfair to reward longer lets (or penalise shorter lets) that don't incur so many one-off costs.
My qualm is that they sometimes aren't included in the advertised price of the listing, which makes comparing listings much more difficult, and incentivizes owners to create huge cleaning fees to artificially lower their advertised price-per-night.
But Airbnb is a "tech" company. So anything goes.
Entry Prep Fee: 19.95 (Basically shipping and handling through the port, even though UPS has an automated system for this)
Bond Fee: 6.00 (A surcharge to get more money in case charging all these BS fees causes you to not want to pay the fees)
COD/Online Fee: 5.00 (An additional surcharge to try and cover the risk of charging you so many surcharges)
Customs GST: 4.98 (the real number)
CA BC PST: 6.97 (the other half of the real number)
Brokerage GST/HST: 1.30 (taxes on the majority of their BS fees)
COD GST: .25 (taxes on their COD surcharge)
When I'm being asked to pay taxes on BS charges your company isn't actually paying... that's when I get truly irate. (Just a PSA for anyone shipping to Canada, please send packages via USPS not a fancy package carrier, CanadaPost is amazing compared to all the private companies up here)
I certainly do.
I agree that it's annoying to see outlets printing company spin but they would need evidence to refute such claims, especially nowadays where everyone is being accused of spreading misinformation and having an agenda.
How could they go about that on a per-statement basis and what would such a refutation look like?
That's exactly what reporters _should not_ do. Why would i want them to mix their opinions in when reporting an actual statment from the company.
People are perfectly capable of forming their own opinions.
Don't print a company claim without doing some digging to back up or refute it.
Or if you do make it clear that you (the reporter) made no effort to back up the claim.
There needs to be a greater degree of skepticism in the way the media covers powerful people, companies, and organizations. Amazon saying something doesn't mean that statement is true. It is the reporter's job to determine if it is true before passing that statement along to the reader. When the reporter is unable to confirm it as truth, the reporter should denote that lack of confirmation before repeating the statement. When the reporter can confirm something is false, such as the implication that fuel price increases are permanent, the reporter should note that as a lie.
Basically fewer journalists with more column inches to fill using syndicated pieces and barely editing them mean the same company release can appear across all the platforms with minimal contextualisation.
Our actual YoY inflation is significantly higher than 5%, so this does not sound like an excuse to pass off a temporary increase to my ears.
This simply is not true. For example, gas was generally cheaper in the stretch from 2015-2021 than it was from 2011-2014[1].
[1] - [https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=e...]
I wish people would stop thinking inflation is some mythical thing that can not be predicted... We know what it will be... High... because the people controlling the policies making inflation high still believe they are not the cause and are busy shifting the blame
I think what GP missed is that this price is likely going to get baked into the end-buyer price, but not by Amazon.
The reason it's likely not baked by Amazon is because Amazon's fulfillment has costs that don't get recouped until an item is sold. If Amazon moves seller goods back and forth through its warehouses, Amazon might never make the money back on the fulfillment service if the item never sells.
Sellers will wind up conveying this additional charge back into their item's price.
Same reason B2C companies do it all the time. While Amazon is notionally B2B, it's got lots of small sellers that probably behave more like consumers, and the business that don't just won't care how the price is characterized.
Amazon's business model is "skimming off the top." Essentially take x% of whatever. If prices rise due to external factors and Amazon's x% remains identical then their real-term income increase inline with inflation.
This is double-dipping. Prices rise, Amazon makes more, now they want "and 5% more" on top because reasons.
PS - Although this argument only applies to inflation adjustments, not fuel.
Dude, this is capitalism. Everybody uses every excuse, from the most justified to the least justified. Assuming it's greed is dumb, but assuming it isn't greed is spectacularly dumb.
If it was a fixed increase, I'd be a lot less critical. But percentages piled on already percentage fee structures strikes of profiteering from their market position, and using the economic climate as a lazy excuse.
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.
(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.)
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/GABBX6GZPA...
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...
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.
With logistics companies it's typically easier to identify the incremental surcharge, as at first glance they've blended it as fee increases.
There's not a "driver surcharge" and a "working doors surcharge" and a "seatbelt surcharge", right?
This is in no way a move to increase transparency and, uh, fuel doesn't have a flat per ride cost anyways. If I book a three thousand dollar uber to take me from LA to NYC it apparently uses just as much fuel as getting an Uber to the bus stop down the road from me.
Is this a marketing gimmick for the generations who have never seen inflation before?
Not that I agree with Amazon here, but it makes sense not to just increase the fee overall and have it itemized if its anticipated to be temporary (even if thats temporary on the scale of say...1 year)
Though thats not really the point either. Gas prices DO fluctuate and recently have done so drastically (48% or so YoY). They are a contributor to the overall inflationary trend recently. Though aren't the only cause, or even primary IMHO, they are probably one of the biggest that are noticeable to the common person and one that doesn't scale well.
In 2006 after Katrina i was paying well above $3.00/gallon for gas. That got better over the years and really good in the last year or two. Then its bounced back up.
So again, if Amazon sees this as a temporary trend and cost to their service, it makes sense to itemize it off to allow the option of its removal when it stabilizes and/or reverts, rather than lump it in with their standard bottom line service charge and have to explain not one, but two changes to that down the line (an increase and then decrease).
[1] - https://www.macrotrends.net/2497/historical-inflation-rate-b...
Surcharges exist to allow advertising lower costs and attracting more customers while charging the same or more as competitors.
The Feds made a prediction, where all else being equal, that they expected supply chains to free up "soon", and it isn't a systemic issue. They guessed wrong, as the world wasn't ready to return back to prior productivity levels. This prediction, however, isn't supposed to be used as a basis for decision making for the common person.
The Fed had access to the same, if not better, data than everyone else. A big part of shortages was a rise in demand.
I'd say this is pretty unlikely. This is like saying that because the weatherman was wrong and it's 10 degrees colder today than predicted we should expect a new ice age to hit next week.
There is a limit to the debt-to-GDP ratio before reality takes over. Baked into the assumptions on debt is inherent growth in GDP. It's rare, but there are scenarios where you may see real contraction in GDP and, frankly the present geopolitical and global economic climate is ripe for such events. If that happens, then the US entering some inflationary spiral to service debt isn't totally 100,000 year "ice-age" ridiculous. It's more like ~100 year cold snap.
Hyperinflation is typically defined as at least 50% monthly inflation (about 13000% annualized).
The highest monthly inflation since it has been tracked in US history is a 23.7% annualized rate in June 1920 (not a monthly rate, an annualized rate), the highest estimated annual inflation (obviously, pre-regular-tracki g) is just under 30% for 1778.
So any hyperinflation would be orders of magnitude beyond anything seen in US history, sure.
But I’d like to see your quantification of “not unlikely” and the supporting analysis.
https://docs.aws.amazon.com/AmazonCloudWatch/latest/monitori...
It might be a tentative connection, but i think this has to do more with the unionization of an Amazon warehouse. Jeff knows tides are turning, and 5% would help to bolster quarterly earnings reports if and when healthcare, retirement, and a living wage is offered to union warehouse workers during contract negotiation. It would also help weather the storm if workers did choose to strike. This parlour trick only pans out if organized labor remains restricted to a single warehouse; its not scalable or repeatable. If the union boss is to be believed, then Amazon is looking at massive unionization across its warehouses and a potential precipitous decline in revenue in the coming years.
In the UK mobile phone / broadband companies have taken to adding a CPI (customer price index, a measure of inflation) + 3.9% year on year increase in to contracts. It's complete bullshit, if for no other reason than 3.9% is nearly twice the target inflation target without loading that further.
Note that the general referral fees are not affected, only the FBA fulfillment fees.
I use Scamazon as a replacement plan to replace (for free) broken goods that I have bought previously. And since I can return broken crap to Kohls, makes doing this easy.
Regarding other surcharges e.g. fuel, I would say, to be fair to Amazon, that they are coming late to a game that has been going for a while now.
Once in a while, I get a phone call from $well_known_international_shipping_company trying to lure my business away from their competitors.
Shipping salesdroid sends me a nice Excel spreadsheet showing the breakdown of all the nice cheap shipping rates for various weights and destinations. All designed to make you think "that looks awesome, where do I sign".
But for the last few years or so, the spreasheet has changed to include some small-print at the bottom "A fuel surcharge will apply to the Rates, calculated in accordance with the methodology at $url unless otherwise specified in the Rates, $shippingCo may from time to time elect to revise its fuel surcharge table".
No way does the vendor want to assume the risk of fuel prices going through the roof and being forced to eat into their margin. At most they should share that risk with the customer—it isn’t like the vendor or the customer has much control over fuel prices.
Totally agree. Interestingly as a consumer, the only time I've seen this is on my garbage collection when I moved to a new city.
I've seen contracts arranged as "Market index price per pound of $commodity plus _x_ per pound for processing". If you're worried about costs varying significantly, you can go hedge the commodity.
I've also heard of "transportation costs paid by supplier up to _x_, with all costs in excess split 50/50 with the customer" as a way of keeping incentives aligned but sharing risk.