Amazon is one of the most successful online shopping retailers, and it also allows independent third-party suppliers to run their own successful online retail business. Amazon allows independent suppliers to list their products and helps them fulfill their orders, which allows sellers to run a successful business without having to worry about creating their own infrastructure.
With more and more physical stores closing, online sellers are making a huge profit through Amazon. If you’re interested in making a profit through Amazon, consider taking an online course that will teach you how to create a successful business. A popular course is Amazing Selling Machine X. Hustle Life provides a great review of this course!
Something you’ll run into, however, is the realization that most Amazon third-party sellers are importing goods from China. And with President Donald Trump raising tariffs on Chinese imports, you might be wondering what impact the US-China trade war is having on Amazon sellers.
Trump’s Tariffs
President Trump has begun imposing tariffs on a number of imported goods as part of his economic policy. His tariff on a number of Chinese imports resulted in the US-China trade war, during which Trump continued to raise tariffs on Chinese imports. There is a possibility of a permanent 25% tariff on a number of everyday products that are imported from China. And, while the US-China trade war is receiving the most media coverage, it’s also important to remember Trump is imposing tariffs on goods from other countries as well.
Trump and Amazon
Trump has long expressed concerns over Amazon. Even before he was elected President of the United States, he expressed concern over Amazon damaging tax-paying retailers, saying that Amazon pays little to no state taxes and is putting physical retailers out of business.
However, Trump’s tariffs were not specifically targeted to hurt Amazon. A number of large retailers, including Target and Walmart, have also been impacted. Because of the increased costs to import products from China, retailers are having to raise prices.
Impact on Amazon sellers
There are a number of private third-party Amazon sellers that import their inventory from China. A number of manufacturers in China produce products at a low price, and then sellers buy products wholesale and relist them on Amazon at a higher price to make a profit. Manufacturers are willing to work with resellers, offering them samples so that the seller can check for quality and then offering negotiations. There are also a number of Amazon sellers that currently reside in China and then ship to the United States.
However, tariffs are going to start affecting a number of products being imported. This means that sellers need to figure out how to offset the costs. They still need to make a profit from the goods.
Options for Amazon sellers
While there is still a chance the United States and China could come to a resolution that lowers the tariffs, many Amazon sellers are preparing for the tariffs to be permanent. While there’s no perfect solution, there are some obvious ones.
Most sellers are raising the prices of their products. Raising the prices allows them to offset the cost of the tariff. While this allows them to keep making a profit, it also impacts consumers. Consumers might not be able to afford the new costs of products. And if consumers aren’t buying, sellers aren’t selling.
Some sellers are just absorbing the increased cost of their imported products and continuing to sell the products at the same price. This lowers their profit but allows consumers to keep buying.
Others are stockpiling items before the higher tariffs come into effect. This allows them to import their products now and sell them at the same price. The downside to this method is that they might buy too much merchandise and end up not being able to sell it.
Another option is sourcing items from elsewhere without tariffs. Sellers are turning to factories in Mexico, Vietnam, and India. However, this could impact the quality of items and could also cause a seller to have to rebrand. Shipping arrangements from another country could also be costly.
The least desirable option is closing down shop. Some sellers are having to shut down their Amazon business because they can’t afford to import new inventory from China and are unable to source their products from other countries.
Final Thoughts
Trump’s tariffs are impacting the global economy, including American businesses and consumers. Once the tariffs are in place, they will be hard to get rid of. While it is still completely possible to run a successful Amazon business, sellers need to have a plan in case the tariffs become permanent.
