Amazon's Tariff Pricing Drama: Smart Retail Strategy or Pure Misstep?
Amazon’s consideration of displaying tariff charges on ultra-discount items triggered political backlash and retailer debate over pricing transparency. Experts argue it would be poor merchandising and discuss the broader supply chain and inventory consequences retailers face amid rising trade tensions.
📌 0:02 – Amazon considers showing tariff costs on Haul items, then reverses
📌 1:00 – White House responds, calling it “hostile and political”
📌 1:45 – Jeff Dwyer explains why it's not good retailing and could backfire
📌 3:00 – Chris Walton critiques the logic from a merchant’s perspective
📌 4:00 – Discussion on how other retailers are reacting to new tariffs
📌 5:10 – Inventory strategy changes: some retailers dropping imports to zero
📌 6:00 – Luis highlights global supply chain pressures and reshoring limits
📌 7:00 – Holiday 2025 warning: Inventory risks loom large for seasonal categories
👉 This episode, sponsored by the A&M Consumer and Retail Group, Simbe, Mirakl, Ocampo Capital, Infios, and ClearDemand, unpacks the complexities of global trade policy on store shelves and offers tactical advice for retailers navigating turbulent supply chain and pricing landscapes.
For the full episode, head here: https://youtu.be/LpW3lI-L7TI
#amazon #retailstrategy #ecommercenews #supplychaincrisis #tradepolicy #tariffs
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Transcript
Amazon said Tuesday it considered displaying import charges on items sold via its site for ultra discount items, but that plan was apparently never approved and never going to happen as a direct quote from Amazon.
Speaker A:According to cnbc, the move would have affected items sold on Amazon's haul, their answer to Chinese discount retailer Temu, which offers apparel, home goods and other Items priced at $20 or less.
Speaker A:Amazon weighed adding a separate line item to products on haul in response to Trump's removal of the de minimis trade loophole, according to a source familiar with the matter.
Speaker A:The consideration apparently was not related to Trump's 145% tariff on imports from China.
Speaker A:Punchbowl News first time call out I think on the fast five, Chris.
Speaker A:If not yes, I think it was.
Speaker B:Too when I was right.
Speaker A:Yes, yes.
Speaker A:Reported earlier on Tuesday that Amazon would quote, soon begin displaying the cost of tariffs alongside the price of each product, citing a source familiar with the company's plans.
Speaker A:The report drew the ire of the White House, which called Amazon's reported plans a quote, hostile and political act.
Speaker A:Jeff, we're going to go to you on this hotly debated topic to kick us off here.
Speaker A:All the Tuesday craziness notwithstanding, is the idea of Amazon potentially displaying costs of tariffs, even good retailing to begin with.
Speaker A:The floor is yours.
Speaker C:This is a good one.
Speaker C:I'm not aligned with you on is this even actually really news by the time you get to lunchtime it's off the front page of the press, right?
Speaker C:This is an interesting one.
Speaker C:No, it's not good retailing, but I think you're going to see a number of strategies and approaches that are taken by retailers that are having to bear not insignificant amount of cost pressure that's inbound.
Speaker C:Obviously would love to see Amazon and other larger retailers do something different than what I think is a pretty extreme measure that in my mind needs to protect local brands and some of the smaller private label type companies that are really going to have a hard time weathering the next six to 12 months and using that as a transparent pricing to have a more honest conversation with your customer and demographic and consumer base than what I think this was with a large retailer potentially making a political move or trying to get the extra margin probably the wrong way for them.
Speaker C:But it'll be interesting to see how a lot of other mass retailers are employing it.
Speaker C:I think we're already seeing the early cracks of pricing increases across certainly the apparel landscape and it's, it's, it's, you know, with my CFO services background, I can tell you It's a mess out there right now.
Speaker A:Right, right.
Speaker A:Well, and Chris, you, I know, you know, when we, when this question gets posed, is this good retailing?
Speaker A:What would you have done in this scenario if you were Amazon or even as a, as someone listening who's trying to think about like, is this a viable option?
Speaker B:Yeah, I know.
Speaker B:Like I thought Jeff said it well, like, I don't even think this story is really news.
Speaker B:I mean, we're reporting on conversations I think that are happening inside Amazon in terms of what to do.
Speaker B:That's what we're doing.
Speaker B:I don't believe this thing would have ever seen the light of day like this concept because, yeah, it's just, it's bad merchandising.
Speaker B:In my experience as a merchant, you never give people a reason not to buy something.
Speaker B:Like you're basically telling people, why don't you go comparison shop for this while you're on my site?
Speaker B:Because you're seeing the tariff surcharge here.
Speaker B:So, so I just don't see it.
Speaker B:It doesn't make sense to me that you would do this and maybe some other people are thinking about it, but I don't think Amazon would ever actually put this into practice.
Speaker B:So, you know, I don't know.
Speaker B:My question really for Jeff is like, what, what is some of, what are some of the things that you're seeing different retailers do in regards to, particularly on the shipment side of things.
Speaker B:I'm curious if you have any intel on that in terms of what you're seeing different responses to this tariff situation, what the responses have been.
Speaker C:Yeah, it's a mixed bag and I hate that answer.
Speaker C:But the answer, that's the truth.
Speaker C:Right now you have a number of retailers that can either be specific and differentiated in the product they're bringing in because there's enough margin to support it and you're going to have less choice.
Speaker C:You've probably already heard it in the past two weeks.
Speaker C:They're going to bring the products that they can afford to pass on or they make enough money to make it a mathematical equation that's acceptable for them.
Speaker C:And then in instances where businesses are unable to actually weather the storm, we've heard examples of companies that have taken imports down to zero and are just waiting to see if there is an alternative option for them to either take inventory down and try to pass on the price for the inventory that they already have in the door, but it's not a one size fits all model.
Speaker C:We have a number of kind of near term, short term mechanisms that a lot of companies are employing.
Speaker C:And then the reality is where do you bet right now, given how limbo everything is on country of origin outside of just obviously everything going on with the 145% tariff on China.
Speaker C:But it's, it's, it's a little bit of a wait and see right now.
Speaker C:And that's across everything.
Speaker C:Capital markets, companies trying to figure out where, what they can do in the short term to, to get the price back.
Speaker C:And then longer term, what, what do they need to do from a supply chain and operational perspective to, to avoid this longer term.
Speaker A:Yeah, I think that's really well said and, and Luis, we'll go to you for the final word on here.
Speaker A:But I, I think it's like, it's definitely like something that you hear in therapy.
Speaker A:Like what, let's focus on the things you can control, right?
Speaker A:What can you control in this scenario?
Speaker A:And I think for retailers, right, it's like looking at, okay, how do I focus on loyalty?
Speaker A:Like the costs are going to go up across the board.
Speaker A:Consumers are going to be impacted by these tariffs.
Speaker A:So how are you working on lever using what you have internally, even as Amazon to like lever up and down, you know, where you might be able to take a hit on some of your margins so that you can provide a lower price point for that consumer for some of, of these topics or for some of these products in addition to that.
Speaker A:But Luis, last word here.
Speaker A:What, what, what would you add to this big, big topic of tariffs and pricing and, and how the consumer is going to be impacted.
Speaker D:And as Jeff said, I mean, it's hitting, you know, the entire economy.
Speaker D:And if you take it from the consumer companies, I mean, there's not one company that's not, not hit by it because the supply chains are so integrated, so global.
Speaker D: lot of the players had in the: Speaker D:They need to rethink and reshuffle their supply base and it's putting a lot of strain on the system and a lot of cost increases.
Speaker A:Right.
Speaker B:Jeff, I'm curious before we move on to the next headline, I'm curious, maybe you can give me a number here or not.
Speaker B:But as you look to the summer and maybe even into the fall, how much lower will inventories on shelf be in the average retailer across America?
Speaker C:How many retailers will be here if there isn't any movement in the summertime is probably the more concern I have.
Speaker B:Wow.
Speaker B:Okay.
Speaker C:Yeah.
Speaker C:Again, I think there's a number of companies for the first time that are actually excited that they're, they're long inventory and sitting on six to 12 months of, of a particular category when that would have obviously been frowned upon just three weeks or four weeks ago.
Speaker C:So I think you're going to see inventory levels certainly being impacted for the holiday buys as you think about all the seasonal categories that are coming in that you usually land kind of in that September October timeframe that stuff is going to be on a boat here in 90 days, 60 days and, and I, I, I'm more worried about the impact you're going to have on the more November December seasonal type type areas than I think you're going to see.
Speaker C:Worried about what's on shelf at a Walmart for, for the next 60 days.
Speaker C:Yeah.
Speaker B:Yeah that's interesting.
Speaker B:Yeah and I started talking about that for the first time last week too that that's kind of our new growing fear as well.
