Some third-party merchants selling China-made goods on Amazon are planning to reduce or eliminate their participation in the e-commerce retailer’s Prime Day in July due to new tariffs, Reuters reported.
Sellers told the news service they are making the move to protect their profit margins by enabling sales for full price or smaller discounts outside of the sale.
The report cited four merchants and six consultants advising hundreds of Amazon sellers.
Doubled cost
Merchant Steve Green said he would not participate in Prime Day for the first time since 2020 in order to sell previously imported bicycles and skateboards for full price later on.
Green said current China tariffs would double the cost of newly imported merchandise, making it “unaffordable”.
Kim Vaccarella, chief executive of tote bag company Bogg Bagg, said she would similarly skip Prime Day in order to retain unsold US merchandise that was manufactured in China and sell it for full price or at smaller discounts.
Vaccarella said she has halted production in China and is working to move manufacturing to Cambodia and Vietnam.
Rick Sliter, head of pillow company MedCline, said last year’s event was a “no-brainer” but that if tariffs continue discounting would be “thrown out the window”.
A reduction in the number of sellers participating in Prime Day, which is one of Amazon’s biggest sales after Black Friday and Cyber Monday, would see the company take in a lower amount in fees and advertising revenue.
Financial impact
A pullback would also reduce the selection of discounted items for the sale, which is designed to increase the attractiveness of Amazon’s Prime subscription plan.
Amazon takes a 15 percent commission on each unit sold, while merchants pay $1,000 (£744) to have a discount highlighted as a “Best Deal” or $500 for a “Lightning Deal”.
US shoppers spent $14.2bn during last year’s Prime Day, 11 percent up on the previous year, according to Adobe Analytics figures cited in the report.
Amazon has said Prime Day will take place in five unnamed dates in July.
The company said it is having a “strong response” from selling partners for the event.