Some Amazon sellers skip Prime Day due to Trump tariffs

Amazon’s Prime Day, a significant shopping event, is experiencing reduced participation from some third-party sellers this year.

Several merchants are opting out or scaling back their offerings due to high tariffs on Chinese goods and concerns about profit margins.

Typically held in July, Prime Day has been a major driver of sales and Prime memberships for Amazon.

However, high tariffs and rising costs have made discounting less feasible for some sellers.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Prime Day’s evolution reveals shifting seller economics

Amazon’s Prime Day has transformed from a birthday celebration into a retail juggernaut since its 2015 launch.

The event generated record-breaking sales of over 100 million products in 2018, with small businesses alone exceeding $1.5 billion in sales 1.

Third-party merchants have been crucial to this growth, with FBA sellers seeing a 300% unit sales increase during the first Prime Day in 2015 2.

The current seller pullback marks a significant shift in the event’s economics, as participation requires substantial investment. Merchants typically pay Amazon $500-$1,000 to highlight discounted items, plus the standard 15% commission on each sale.

These costs were worthwhile when sellers maintained 15-20% profit margins, but the new 145% tariff on Chinese goods has made the math untenable for many merchants like Steve Green, who is skipping Prime Day for the first time since 2020.

This demonstrates how external economic factors can rapidly transform the cost-benefit analysis for marketplace sellers, even for established retail events.

2️⃣ Amazon marketplace dynamics shaped by supply chain realities

The tariff-driven seller pullback highlights Amazon’s dependence on its third-party ecosystem, which accounted for 62% of all units sold in Q4 2024.

Chinese sellers have historically demonstrated more resilience during trade tensions. When previous tariffs were implemented, U.S.-based Amazon vendors experienced more significant sales declines than their Chinese counterparts 3.