Source: Reuters
What happened?
A number of third-party sellers on Amazon are scaling back or skipping Prime Day 2025 entirely due to the impact of steep U.S. tariffs on Chinese goods, according to several merchants and consultants.
Why it matters:
This shift could result in fewer discounted items during Amazon’s major sales event, potentially affecting Prime Day’s overall sales volume and Amazon’s advertising revenues.
Key details:
- Merchants like Steve Green, who sells bicycles and skateboards sourced from China, are opting out of Prime Day for the first time since 2020.
- Kim Vaccarella, CEO of Bogg Bag, also chose to sit out this year, preserving her inventory for sale through retailers like Macy’s and Dick’s Sporting Goods at full prices.
- The newly implemented 145% tariffs on Chinese imports are driving up costs, making participation in heavy discount events like Prime Day financially risky for sellers.
Bigger picture:
- Prime Day is Amazon’s second-largest event after Black Friday and Cyber Monday, typically driving millions in sales and attracting new Prime subscribers.
- Third-party sellers, who account for nearly 62% of units sold on Amazon, are essential to Prime Day’s success.
- Tariffs have made discounting much harder for sellers, with profit margins already squeezed due to Amazon’s standard 15% commission and other promotional fees.
Amazon’s position:
- Despite seller concerns, Amazon claims there is still a “strong response” from partners for Prime Day 2025.
- CEO Andy Jassy has stated that Amazon is making “strategic inventory buys” and renegotiating vendor terms to cushion the tariff impacts.
Seller strategies:
- Some sellers are halting production in China and moving manufacturing to countries like Cambodia and Vietnam.
- Others are gradually raising prices, reducing advertising budgets, or delaying imports to manage costs better.
Voices from the ground:
- Rick Sliter, CEO of MedCline, said discounting during Prime Day no longer makes sense under current conditions.
- Consultants working with hundreds of Amazon merchants report that “nearly all clients are pulling back on Prime Day deals” this year.
Outlook:
- U.S. shoppers spent $14.2 billion during Prime Day last year, an 11% jump from the previous year.
- However, the full impact of tariffs on 2025’s event remains to be seen, as sellers weigh difficult decisions in an increasingly volatile trade environment.