The trade war is causing challenges for sellers on the platform, potentially leading to shortages and increased shipping costs to the US.
The current administration’s tariff battle with other countries, particularly China, has led to an increase in import costs of up to 145%.
As a result, Amazon merchants are increasing prices on popular items.
Consumers are paying higher prices for popular products like diaper bags and necklaces due to high import costs.
SmartScout tracked over 900 Amazon items and found that prices in categories like apparel, jewelry, homeware, office supplies, electronics, and toys increased by an average of 29% since April 9.
The number is “sensationalized,” but an Amazon spokesperson told CNBC that the research covered “a tiny fraction of items in our store.”
According to the e-commerce giant, less than 1% of the studied items experienced price increases.
“We have not seen the average selling prices of products change up or down appreciably outside of typical fluctuations across the hundreds of millions of items on Amazon,” according to a statement.
“And we continue to meet or beat prices versus other retailers on the vast majority of items.”
The back-and-forth tariff battle with China is threatening sellers on Amazon’s third-party marketplace, which accounts for roughly 60% of the company’s online sales.
Many sellers are based in China or rely on the country to source and assemble their products, with Chinese sellers accounting for approximately 25% of recent price increases, according to SmartScout data.
Amazon merchants are forced to choose between raising their prices and absorbing the additional costs resulting from Trump’s tariffs.
The situation is daunting for many sellers, who already have thin margins and have faced rising costs on Amazon for storage, fulfillment, shipping, and advertising in recent years.
Increased competition has created a challenging environment for Amazon merchants.
SELLER STRESS
The rising costs associated with the new tariffs affect not only Chinese sellers, but also many US merchants.
Aaron Cordovez, co-founder of Zulay Kitchen, has been selling kitchen appliances on Amazon for the past decade.
However, he is concerned about the future of his business because the majority of his products are manufactured in China.
Zulay Kitchen, based in Florida, is moving “as fast as we can” to expand production to India, Mexico, and other markets, Cordovez told CNBC.
While these countries are also facing increased tariffs as a result of the trade war with the United States, the rates are much lower than those on Chinese goods.
Cordovez explained that shifting the company’s manufacturing countries would most likely take a year or two to complete.
“We’re making our inventory last as long as we can,” the Amazon seller explained.
Dave Dama, co-founder of the health and beauty company Pure Daily Care, expressed concerns about company inventory.
Dama stated that his company has enough inventory of certain products to last up to six months, which he intends to “extend as much as possible” in the hopes that China and the United States will reach a trade agreement.
“We can try to stretch that seven, eight, nine months, which buys us a lot more time for this thing to work out, hopefully,” he told me.
Starting April 25, e-commerce platforms like Shein and Temu may see price increases of up to 125%.
Walmart and Home Depot broke their silence following Trump’s crisis talks, as shoppers fear high checkout prices.
