Amazon Sellers May Pass Tariff Costs to Consumers

Amazon CEO Andy Jassy anticipates that the company’s third-party sellers may transfer increased tariff costs to consumers. This comes as the company assesses the full impact of recent tariff implementations.

Third-Party Sellers to Bear the Brunt?

In a recent interview, Jassy noted that many sellers might not have the margin to absorb the tariffs, suggesting they would likely pass the costs on to consumers. Millions of third-party sellers, a significant portion based in China or sourcing from there, account for roughly 60% of products sold on Amazon.

Amazon’s Proactive Measures

Jassy mentioned Amazon’s efforts to mitigate price increases. These include strategic inventory buys and renegotiating purchase order terms. However, following the tariff announcement, Amazon reportedly canceled some direct import orders from Chinese vendors.

Consumer Behavior and AI Investments

There are indications consumers are preemptively buying products, though it’s uncertain if this trend will persist. Despite tariff concerns, Amazon is committed to investing in AI technologies and expanding its data center infrastructure. AWS began diversifying its supply chain five years ago to mitigate risks.

“We’re going to keep building,” Jassy affirmed, underscoring the company’s dedication to growth despite potential economic headwinds.

Source: CNBC

• Amazon and AI
• Tariff impact on consumers
• E-commerce strategies