Amazon to hike fees, provoking fury among UK small sellersCurrent affairs
Amazon, the biggest online retailer, plans to raise its fees for third party users who list and sell goods across the UK and Europe on its online market platform, starting on 4th April.
In January, Amazon revealed that their operating costs had significantly jumped by 56% from $206m in the fourth quarter in 2011 to $405m in the fourth quarter in 2012. These costs are now beginning to be seen on the balance sheets of third party users as the company tries to adjust to its new costs.
Amazon has also seen a lucrative year in terms of profits. Large revenues in the Christmas period of 2012 saw soaring increases of 23% from October to December with electronic sales taking the lion’s share and notably clobbering HMV’s Christmas sales, pushing the electronics company into administration.
In the run up to Christmas in 2012, two out of five products sold on the site were from third party users. The 2 million third party sellers who use Amazon to list their goods will have to comply with larger across board fee costs from 4th April, from 7% to 12% in the UK.
Certain sectors will see larger rises than others, as will certain countries as the costs are distributed around third party sellers according to their concentration. In France hikes will be from 10% to 15% on DVDs, music and video games while in Germany costs will rise from 7% to 10%.
Similar cost hikes were imposed on third party sellers on Amazon in the US in January and it is only now that it is imposing the structure change on the rest of its consumer base.
Businesses already pressure Amazon to release their revenues earlier as the company holds them for two weeks, now eBay and Play.com are beginning to appeal more to the smaller businesses.
One seller, who makes over £1m through Amazon, said: “At the moment I am putting all my efforts into eBay. It’s a huge strain on a small business not being able to access cash we’re owed from Amazon. And they’re making an absolute fortune in interest.”