Sellers revolt as Amazon hikes fees for traders by up to 70 per cent

 

It overtook eBay as the preferred marketplace for traders to use to sell their goods. But online retailers may be soon returning to eBay in droves after Amazon put up its fees for traders by as much as 70 per cent.

Third-party traders, who list their wares on Amazon.co.uk, are seeing the cut they have to give to Amazon rise from seven per cent to 12 per cent from April 4 – an increase of 71 per cent.

In some sectors, the proportion they lose is even greater – for example, people selling car parts through Amazon.co.uk will see their fees increase to 15 per cent from from 12 per cent.

Sellers through other Amazon websites around the world – who number 2million in total - will also have their margins cut by having to pay higher fees to the online retail giant.

Similar rises were brought in in America in January.

Angry traders took to bulletin boards to vent their frustration. One angry American wrote: "Now that Amazon has all the power they're imposing increased fee hikes to all those cosy sellers who have supported Amazon since day one."

In the last three months of 2012 worldwide revenue for Amazon grew by almost a quarter to $21.27bn (£14bn).

Amazon rules state that vendors cannot offer their wares elsewhere for a lower price. Yesterday some were threatening to beak the stipulation, in order to make up for the lower margins due to the fee rise.

"We are not supposed to, but we will have to have higher prices on Amazon," one British trader was reported as saying.

And an American third-party merchant, Kat Simpson, told website 4trades.com: "If you are selling items under $25, you won't do as well on Amazon as on eBay profit wise."

Amazon has informed sellers that the fee rises followed the introduction of a new "web store" category for electronic accessories.

"The new store will help to improve customer experience by providing a central destination for millions of unique electronic accessories products, a more intuitive browse structure, and other features," it wrote last month.

A petition calling on Amazon to “pay their fair share of tax in the UK” has been signed by 100,000 people. Amazon had sales in the UK of £3.35bn in 2011 but only reported a "tax expense" of £1.8m.

The petition was launched after MPs alleged Amazon was avoiding UK taxes by reporting European sales through a Luxembourg-based unit, meaning it could pay less than 12 per cent on foreign profits.

Andy Street, chief executive of John Lewis, has accused Amazon of "destroying the UK tax base" through this practice

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