Amazon Fee Hikes Make Merchants Unhappy; Could Benefit Ebay, Wal-Mart and Google [VIDEO]
Fee hikes over the last year and a half have been veering merchants off the path from using Amazon for their business needs, reported MSN News.
Amazon accounts for almost 40 percent of unit sales, according to the report. This places Amazon shares at record highs, but this may drop with the company's plan to raise fees.
Furthermore, this could benefit their rivals- Ebay, Wal-Mart stores, and Google, which are starting to get involved in the online marketplace.
Niraj Shah, the chief executive of furniture retailer Wayfair, which uses Amazon, Ebay and Wal-Mart's online marketplaces, as well as its own websites, said, "If they increase fees too much, some sellers will decide to not sell there anymore," according to the report.
The online marketplace takes a cut in every sale as the merchant, or third-party seller makes a profit, generating more income than traditional retail. If they charge even higher fees, like they say they will for shipping handling, they will lose customers.
"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."
According to Amazon, many of the fee increases have been driven by rising costs, like higher gas prices and therefore transport expenses. They have also invested in changes to get products to customers quicker. They claimed that this would benefit third-party sellers because faster shipping would increase sales.
