According to a study by Marketplace Pulse, which sampled seller transactions going back to 2016. Amazon’s average take of each sale finally topped 50% in 2022.
Amazon.com Inc. is demanding more money from the almost 2 million small businesses who sell goods on its vast online marketplace as it struggles with slowing sales growth and growing costs.
The research company totaled up the commission on each sale
The costs for warehouse storage, packing, and delivery, as well as the money spent on advertising on a platform where hundreds of millions of products compete for customers’ attention. Although it is optional to pay Amazon for logistics and advertising. The majority of merchants view these as essential elements of running a successful business.
According to Marketplace Pulse, sellers have been paying Amazon more each transaction for six years in a row. But they have been able to absorb the hikes because the company was gaining new clients and quickly growing its revenues. When pandemic lockdowns were lifted and people started travelling and dining out again, that dramatically altered, suffocating online commerce. Amazon experienced its weakest sales growth ever last year.
Amazon’s sellers are reluctant to raise prices because customers are much more price-conscious now than they were before the outbreak. Due to this fact and the fees’ constant rise, many sellers are finding it difficult to make ends meet. As a result, some have started handling their own shipping and reducing their spending on Amazon advertising.
According to Juozas Kaziukenas,
The founder and CEO of Marketplace Pulse, “for these tiny firms, it’s growing harder and harder to be profitable since they are paying more and more money on Amazon fees.” Amazon would be inclined to keep raising costs given their predicament, but you need to find some sort of balance.