Amazon Squeezes Suppliers

Amazon is planing to limit number of small-budget single items shoppers can buy.

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Amazon is starting to offload costs onto suppliers and limit the number of single low-priced items shoppers can buy in order to offset rising shipping costs.

The company is raising transportation fees for suppliers of beverages, diapers and other bulk products that are expensive to ship. Amazon is also preparing to make it harder for consumers to purchase small orders of inexpensive items that are difficult to sell profitably online unless they're part of a larger purchase.

Fulfillment expenses rose 43 percent in 2017, outpacing revenue growth of 31 percent that year. 

Amazon has designated certain inexpensive health and personal care items as "add-ons" that need to be combined with a larger order. Starting this year, the company plans to expand the number of the items to most products in those categories costing less than $7.

Amazon is attempting to keep prices low as Walmart starts to close the gap between them. Analytics found that Walmart's prices were just 1.8 percent higher than Amazon. 

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