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Iran war is about to add costs for Amazon merchants

Alex Halverson, The Seattle Times on

Published in Business News

Amazon will charge some sellers on its platform a 3.5% surcharge later this month, as the war in Iran drives up oil prices and increases the e-commerce giant’s costs.

The affected sellers are the critical mass of Amazon’s online marketplace, independent merchants that sell products through Amazon and also rely on the company for packing and shipping.

The fee shows another way the Iran war has affected Amazon. In early March, not long after the U.S. attacked Iran, several of the company’s data centers in the Middle East were damaged by Iranian drone strikes. The damage severely impaired connectivity in the region through Amazon Web Services, the company’s cloud computing platform.

The “fuel and logistics” surcharge won’t apply to all third-party merchants and won’t be charged based on an item’s price listed on Amazon’s site. Rather, sellers who use the company’s Fulfillment by Amazon program — a service in which Amazon stores, handles, packs and ships products — will have the surcharge based on their fulfillment fees starting April 17.

The same surcharge will apply to sellers who use Amazon’s shipping services but sell on their own sites, starting May 2.

It will only affect items sold and shipped in the U.S. and Canada.

Amazon’s e-commerce business, which recorded $587 billion in revenue last year, has always been vulnerable to external forces like oil prices and trade policy. Operational costs for Amazon’s retail division rose in 2022 as gas prices did, leading the company to tack on a 5% surcharge for third-party sellers at the time.

Amazon spokesperson Ashley Vanicek said the company has eaten the costs so far, “but similar to other major carriers, when costs remain elevated we implement temporary surcharges to recover these costs.”

Vanicek added that Amazon’s surcharge was “meaningfully lower” than those applied by other major carriers. FedEx recently implemented a 26.5% surcharge for domestic ground shipments, and UPS imposed a 27% surcharge, The Wall Street Journal reported Friday.

Amazon didn’t say when the surcharge will end, but the company will continue to evaluate it as the war progresses.

 

Amazon sells its own private-label items and a variety of wholesale products, but third-party sellers are the core of Amazon’s retail business, with their products accounting for more than 60% of all items sold on the tech giant’s site. Many of those sellers use Amazon’s fulfillment service, which entails storage and shipping fees.

Sellers use the service to take advantage of Amazon’s extraordinary logistics empire and its guaranteed fast shipping.

Amazon handles storage and packing in its warehouses. The company’s fleet of delivery vehicles — which includes trucks and vans — handles the shipping and delivery, though the workers in those vehicles outfitted with Amazon garb aren’t actually Amazon employees. The company uses its Delivery Service Partner Program to contract out its delivery work to nominally independent companies that often work exclusively for Amazon.

Amazon’s move signals its desire to keep costs from sliding to the customer.

“We remain committed to our selling partners’ success and to maintaining broad selection and low prices for customers,” Vanicek said.

But prices can still creep up.

Last year, after President Donald Trump announced his broad tariff policies, Amazon had the gumption to stay optimistic about potential trade-related headwinds. In a May earnings call with analysts, Amazon CEO Andy Jassy said it was hard to tell what was going to happen, but that he was confident the company’s army of sellers could withstand creeping trade costs and supply chain issues.

That tune changed earlier this year when Jassy told CNBC that the higher costs due to tariffs were starting to drive up prices.

On the cloud computing side, Amazon hasn’t provided updates on the status of data centers damaged in the United Arab Emirates and Bahrain on March 1. Iranian state media also reported earlier this week that Iran’s Revolutionary Guard had targeted an AWS data center in Bahrain, according to Reuters.


©2026 The Seattle Times. Visit seattletimes.com. Distributed by Tribune Content Agency, LLC.

 

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