Amazon Reportedly Pushing Suppliers for Discounts to Combat Tariffs

Amazon is reportedly looking for steep supplier discounts to offset the cost of U.S. tariffs.

As the Financial Times (FT) reported Tuesday (April 29), the tech giant has asked for low double-digit price decreases from merchants in a range of categories, from homeware to consumer electronics.

That’s according to a trio of vendor consultants who negotiate on behalf of brands and suppliers. They say Amazon has become more aggressive with suppliers getting goods from China in the wake of the White House’s 145% tariffs on China.

“Amazon is the 800-pound gorilla in the room,” Scott Miller, a consultant and former Amazon vendor manager, told the FT. “Brands have grown dependent on the platform and have little choice.”

The FT notes that Amazon has joined competitors such as Costco and Walmart in leaning on suppliers to reduce the impact on its profits this year. Goldman Sachs analysts said the tariffs could shave between $5 billion and $10 billion from Amazon’s operating profits this year, depending on the outcome of the trade war.

A number of logistics providers and analysts told the FT that Amazon had brought forward shipments after Trump took office in anticipation of increased tariffs.

The company also canceled a significant amount of direct imports from China and had switched to purchasing goods from suppliers with American stock, according to two consultants.

PYMNTS has contacted Amazon for comment but has not received a reply.

The company told the FT it was “working with our broad, varied range of valued selling partners in our store to support them in adapting to the developing environment while maintaining low prices for customers.”

The news follows reports from earlier this week that Amazon third-party vendors are choosing to skip this year’s Prime Day sales event due to the tariffs.

Meanwhile, new research from PYMNTS Intelligence finds that in the battle between Amazon and rival Walmart, many consumers are opting to patronize both retailers.

The research found that nearly a quarter of American adults hold subscriptions to Amazon and Walmart’s membership programs, nearly double 2021’s level. Dual memberships are even more pronounced among millennials, at almost 40%.

“The enduring image of Walmart as mainly a grocer and purveyor of basic household goods — and of Amazon as the seller of everything else — is being subtly challenged by the rise of the kaleidoscope consumer seeking savings and satisfaction across both marketplaces, often simultaneously,” PYMNTS wrote in advance of the research.