Reuters reported that Amazon emailed its marketplace merchants Dec. 20 that the technology giant plans to raise its fulfillment fees by an average of 3 percent in 2020.
The email reportedly cited higher costs from infrastructure and programs such as one-day delivery as why the higher merchant fees are needed, with Amazon adding that it has invested more than $15 billion in 2019 in tools, infrastructure and programs to help its sellers.
Reuters noted that Amazon now handles its own delivery for the majority of its US orders, and that it expects to spend nearly $1.5 billion this holiday season to ensure one-day delivery for its Prime customers. Prime, Reuters notes, has been a key advantage offering for Amazon — with more than 100 million such subscription members.
Reuters quotes Amazon’s Friday email to merchants saying:
“Driven by FREE One-Day Delivery, this was the largest one-year investment we have ever made in FBA. Nevertheless, in 2020, we will make only moderate increases (about 3%) in fulfillment fees, below industry average, because we remain committed to your continued success.”
Reuters cited an Amazon spokesperson adding that the company’s investments are helping merchants boost their sales and that Amazon is still “the most competitively-priced option for entrepreneurs to reach customers with fast shipping.”
The fulfillment fees hike comes amid news of annual fee increases for several logistics providers. On Nov. 18, UPS announced a 4.9 percent shipping rate increase that will begin Dec. 29 —identical to the cost increase FedEx announced in September that will go into effect Jan. 6. Prior to UPS and FedEx’ announcements, DHL said in September that its average 2020 shipping rate will increase 5.9 percent starting Jan. 1.