Tags: amazon | fee | hikes | resistance

Amazon Fee Hikes Get More Resistance From Merchants

Image: Amazon Fee Hikes Get More Resistance From Merchants

Tuesday, 19 Mar 2013 09:48 AM

By Alexandra Ward

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Amazon.com, the world's largest online retailer, is facing backlash from its merchants who worry that the constant fee hikes will grow to be so expensive, they won't be able to afford to list their products any longer, Reuters reported Monday.

Amazon currently charges its third-party sellers fees for listing items on its site and also for handling the logistics of the payment and shipping, all while taking a cut of every sale.

"If they increase fees too much, some sellers will decide to not sell there anymore," Niraj Shah told Reuters. Shah is the chief executive of furniture retailer Wayfair, which uses Amazon, eBay, and Wal-Mart's online marketplaces, as well as its own websites.

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"That's against Amazon's plan, which is to get as much selection as possible on their site," Shah said. "The vast majority of Amazon sellers are perfectly happy to go to any marketplace offering meaningful volume."

Amazon also charges fees for items that sit in the warehouses for too long. If a seller doesn't like it, they can pay yet another fee to have the merchandise either shipped back to them or destroyed. But Amazon's massive customer-base is still a big incentive to list with the company.

Sellers complain that the fees are eating up their profit margins, all at Amazon's benefit.

"Shipping & fees are killing my margins," one seller wrote on an online forum last month.

"Amazon just pulled a fast one," another wrote. "Now that Amazon has all the power, they're imposing increased fee hikes to all those cozy sellers who have supported Amazon since Day 1."

Amazon attributes the fee hikes to the rising cost of gas prices, transport expenses, and investments the company has made in ways of getting customers their items faster.

Analysts theorize that Google could be gearing up to compete with Amazon in the online retail sector. Already armed with product search, payment service, and listing capabilities, Google could be poised to launch its own version soon, they say.

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"If somebody comes in, a Google for instance, and says you can list with us and we will give you wide exposure at much lower cost, that would be a problem for Amazon," Scott Tilghman, an analyst at B. Riley Caris, told Reuters.

Related stories:

Amazon Cuts Price of Largest Kindle Fire Tablet

WSJ: Publishers Oppose Amazon's Bid to Gain Web Names

Amazon Taking Down Thousands of Suspect Book Reviews

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