Amazon sellers now pay more than 50% commission

Marketplace Pulse research shows that typical Amazon sellers pay Amazon 8-15% transaction or referral fees per sale. You also have to waive 20-35% of FBA fees, including storage and other fees, and up to 15% for advertising and promotions. Bloomberg gives the retail example, where a fireplace costs $200 and Amazon $112.

The average commission Amazon received from merchants last year was 51.8 percent, up from 35.2 percent in 2016. According to Marketplace Pulse, transaction fees have been flat for more than a decade, ranging from 8 to 15 percent, but Amazon has the fees increase each year. It increases Amazon fulfillment and increases inventory costs.

Note that while paying for Amazon's logistics and advertising services is optional, most sellers consider them, especially advertising, a necessary part of doing business. Of course, Amazon has a different opinion. I have.

A spokesperson told Gizmodo, "Many distributors have built and operated their businesses without advertising. "If they decide to promote their products, there are many service providers to choose from. Sellers do not need to use our logistics and advertising services, they should only use them if they add value to their business. Please give me."

The spokesman added that Amazon's fulfillment centers are, on average, 30 percent cheaper than standard shipping services offered by third-party carriers and 70 percent cheaper than other two-day delivery options.

Amazon's price hikes have had little impact on retailers in recent years, especially as online shoppers surged during the pandemic. However, once the lockdown ends, people will spend their money elsewhere and the current uncertainty in the global economy has forced consumers to spend more of their income on essential and non-essential luxuries.

It's no coincidence that last year Amazon posted its lowest sales growth rate in history. Amazon is also one of the tech giants to lay off 18,000 employees due to over-hiring during the pandemic. Amazon also increased the annual cost of the Amazon Prime subscription by $20.

Melissa Burdick, a former Amazon executive who is now president of Pacvue, told Bloomberg that as Amazon increases the advertising space on its site, the value of each spot to retailers decreases. "Shoppers are more likely to respond to discounts, so many sellers choose to offer discounts over promotions," says Burdick. Amazon's advertising revenue grew 18.9% last year, compared to 32.2% growth a year earlier.