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“All that was missing was the main propagator of the price hike, Amazon”

Amazon warehouse, in Bretigny-sur-Orge (Essonne), on December 4, 2021.

USALike a forest fire, inflation knows no boundaries or protected areas. Once the correct temperature has been exceeded, nothing can stop the flames. Price increases in the United States reached 8.5% in March 2022, an unprecedented rate since 1981. Starting with commodities, the fire is now spreading to the entire economy. First because of rising fuel prices. Airlines have increased the price of tickets, Uber the price of races and Fedex of deliveries.

The only thing that was missing was the main propagator of price increases in the country, Amazon. The emperor of e-commerce has announced a 5% price increase for all merchants trading on its platform, i.e. a large portion of retail in the United States. Already punished by their own logistical problems and raw materials, traders of garden tables, toys, toothbrushes or ready meals will have to roll labels or lose money.

Storage capacities

In a letter to its professional customers, Amazon of course justifies this measure by the increase in fuel prices, but also by the significant investments made during the crisis to increase its storage and delivery capacity, which resulted in the hiring of 750,000 employees. A hulking figure in proportion to Amazon’s might.

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It also justifies the increase in salary of its employees, the minimum of which rose from $15 (about $13.7) to $18 in the fall of 2021, especially in light of labor shortages. The inflation trap is therefore closed: inflation drives up wages, drives up prices, fuels wage demands in a country that already has full employment, and so on.

More than 50% of the goods sold on the Amazon site are sold by third-party sellers

But not everyone has the luck of Amazon, that of the dominant player in its market and that can therefore pass on its costs. The platform accounts for nearly 40% of e-commerce sales in the United States. Largely because from its inception, it generously welcomed all its competitors who wanted to take advantage of its logistics. A bet that was considered foolish twenty years ago and that today takes on its full meaning. More than 50% of the goods sold on its site are sold by third-party sellers. Gradually, the company offered to Jeff Bezos to handle logistics, delivery, and then IT. At unbeatable prices. An army of obligate that represents a quarter of e-commerce in America and that today has to swallow the successive increases without having the power to pass them on to their customers.

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