Brands and companies selling goods on Amazon this holiday season may need to cut back on advertising buys to cover other costs the marketplace is passing on during the holiday season.
Amazon told third-party sellers using its shipping services it would introduce a “holiday peak fulfillment fee” from October 15 to January 14.
The fee is expected to increase costs for sellers in the U.S. and Canada by an average of 35 cents per item sold, according to several media outlets.
The fees are in response to rising operating costs during the holiday season. Reports suggest Amazon had previously absorbed the costs, but seasonal expenses are reaching new heights.
The fee increase is the second this year. The company added a “fuel and inflation surcharge” to seller fees in April that averaged 5% of fulfillment costs at the time.
Ecommerce in the United States grew 7.3% in Q2 and 9%, according to Baird Equity Research, citing data from the Department of Commerce. This compares to Baird's Q2 ecommerce forecast of more than 6% year over year and more than 7.6% quarter-over-quarter.
Local ad spend on Amazon remains small, compared with Google and Facebook. Last week, Borrell Associates released data showing the percentage of local businesses that buy ads on Amazon is a mere 3%, compared with Google at 36%, and Facebook at 58%.
The average annual ad spend on Amazon is $9.6 billion, compared with Facebook at $13.3 billion and Google at $38.7 billion, according to Borrell.
Higher costs are likely the reason Amazon continues to add fees and diversify revenue streams.
On Sunday, reports surfaced that Amazon is among the bidders for the healthcare company Signify Health, a home-health-services provider.
The Wall Street Journal reported the bid, citing people familiar with the matter.