Amazon sellers opt out of Prime Day sales event as Trump tariffs squeeze profit margins: report

Core Insights - Amazon sellers are opting out of Prime Day due to uncertainty over President Trump's tariffs, particularly the 145% tariff on products manufactured in China, which significantly impacts profit margins [1][5][17] - Analysts express concern for third-party sellers, indicating they will be the most affected by the current tariff environment [2] Group 1: Seller Participation and Impact - Many merchants, especially those manufacturing in China, are choosing to skip Prime Day, with some citing that the tariffs will more than double their costs, making participation financially unfeasible [3][4] - The chief executive of Bogg Bag has halted production and is shifting manufacturing to Cambodia and Vietnam, which currently face lower tariffs [4][7] - Participation in Prime Day is optional for Amazon vendors, but the event typically requires sellers to offer significant discounts, which can squeeze profit margins [7][9] Group 2: Financial Implications - Amazon takes a 15% commission on each sale, with additional fees for promotional features, leaving sellers with a profit margin of only 15% to 20% [9] - The uncertainty surrounding tariff pricing adjustments is causing many sellers to reconsider their discount strategies for Prime Day [10][14] - Last year's Prime Day saw sales seven times higher than an average day, but ongoing tariffs may eliminate the feasibility of discounting for many sellers [15][17] Group 3: Market Dynamics - Nearly 62% of units sold on Amazon in the fourth quarter of the previous year were from third-party sellers, highlighting their significant role in Amazon's marketplace [17] - The tariffs are expected to negatively impact Amazon's sales with first-party partners as well, as many of these products are also manufactured in China [17]