Price tariff: Amazon is looking for solutions in the middle of commercial policy chaos

The price chaos throws Amazon in an uncertain territory.

The forecast, for example, has become almost impossible for certain teams. One of the largest units in the Amazon supply chain recently warned against the challenges of projections in the second quarter due to prices, according to an internal email obtained by Business Insider.

The “volatility and uncertainty” of the new tariff cycle was simply too high to derive from significant figures, said email.

Amazon employees, alongside suppliers and sellers, rush to obtain answers while the trade policy of the whip of President Donald Trump is the largest electronic commerce in the country. Amazon was among the hardest affected actions on Thursday when approximately 2.5 billions of dollars were wiped out of the S & P500 index on the aggressive price of Trump.

Amazon has given little financial advice or flexibility so far, according to several employees, suppliers and sellers, who mainly talked about the state of anonymity because they were not allowed to speak to the press. Tension is intensifying as the concerns of an prolonged trade war and a profession to weave potential recession.

The Amazon spokesperson did not respond to a request for comments.

“Significant risk”

The same e-mail of the Amazon supply chain team said that the short-term impact of the prices will ultimately be captured and reflected in a later forecast. But the exposure to prices and a world trade war is “a significant risk” which can withdraw the retail affairs of Amazon in the future, he added.

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Some Amazon employees have been in direct contact with its suppliers, commonly known as the first party suppliers. These companies sell their wholesale products to Amazon, which then claims them to buyers.

These suppliers said that Amazon was not willing to pay more for their products, even if the prices would increase the costs of suppliers. According to a March email seen by BI, an Amazon employee encourages sellers to seek new cost savings from their own manufacturers or through government grants.

“We understand the challenges posed by the current economic and commercial environment,” said the email. “However, we believe that there are alternatives to direct cost increases that have not been fully explored.”

Some suppliers have told Bi that Amazon also sought “margin agreements” which guarantee the same margin after a supplier increases its prices. In this way, Amazon would retain its margins benefiting from its suppliers, even if it buys the products at a higher price.

In some cases, Amazon interrupts sellers’ shipping orders to monitor the market. A maritime company recently told a supplier that “according to Amazon’s request”, he held the stock collection schedule to “mitigate the impact” of prices, according to an email seen by Bi.

Alan Adams, president of Navazon, a supplier software company, told Bi that tariff discussions with Amazon employees have been continuing for months. He said Amazon and suppliers are pursuing ways to adapt to new market conditions, but constant policy changes make it difficult to find a long -term solution.

“We are all in the way with a huge uncertainty in different categories,” said Adams.

Upset

Trump imposed radical prices in most countries this week. Changes should increase prices on a variety of goods.

Youssef Squali of Truist Securities said that prices will probably have a negative effect on electronic commerce, including Amazon. The import costs will probably eat in their margins, although it always takes time to fully measure its impact on each company, he wrote in a note on Friday. Amazon’s stock is down approximately 10% compared to Wednesday.

Third -party merchants who sell on Amazon told Bi that they will probably have to increase their prices due to prices.

Charles Chakkalo, founder of Joeyzshopping, who sells items at home and in the kitchen, said that he was planning more than 50% prices on his products. To counter, it will have to increase prices, while taking advantage of its unit volume to reduce manufacturing costs.

Oscar Babarin, managing director of the Marketing Agency Hawke Media, said that a number of its customers deeply felt the impact. Some of them reduce their activities, while others are pursuing market share more aggressively, he said.

However, some sellers are delighted with the elimination of the exemption from DE MINMIS which has enabled Chinese import tax shipments assessed at less than $ 800, according to Oliver Scutt, member of the Board of Directors of Mercihant AI. These sellers are waiting for less competition from TEMU and Shein after the change, he said.

However, most sellers have said they feel helpless against the complexity of trade policies. Thursday, as the market pleaded, a supplier sent an e-mail to an Amazon manager to request additional advice, to receive very little support.

“Rest assured, we examine it,” said Amazon director.

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