Tariffs are back, and they’re not just a footnote in the nightly news. For Amazon sellers, they represent a defining moment: where trade policy collides with profitability. Whether you’re a brand managing Fulfillment by Amazon (FBA) or juggling your own logistics through Fulfilled by Merchant (FBM), the shifting tariff landscape is poised to affect everything from supply chain agility to pricing strategy.
Let’s break down what you need to know, what’s changing, and what you can do to stay ahead.
Why Tariffs Are Back in the Spotlight for Sellers
Trade tensions between the US and China have been simmering for years, dating back to the 2018–2019 tariff wars initiated under the Trump administration. While the Biden administration kept many of these tariffs in place, 2025 has brought renewed pressure for escalation. A recent round of proposed tariffs largely framed around economic nationalism and competition with China is poised to affect a broad range of consumer goods.
The latest US tariff proposals are driven by concerns about China’s role in the global manufacturing landscape and the desire to re-shore or nearshore critical industries.1 The political narrative centers on protecting American jobs, yet the implications for small businesses and third-party sellers are much more complex.
For Amazon sellers, this policy shift signals more than just a political development, it’s a call to action. As supply chains are once again under pressure, sellers must adapt or risk margin losses, missed revenue opportunities, and long-term instability.
What’s Changing: Tariff Policy Update
In April 2025, the US imposed a 145% tariff on many Chinese imports. But as of May 2025, that figure has been temporarily reduced to 30% for a 90-day window to facilitate ongoing trade negotiations.2
This move aligns with a broader effort by Amazon to rebalance its supply chain. Although the full list of affected products hasn’t been confirmed, categories like household goods, consumer tech, and kitchen appliances are top candidates. These are precisely the segments where Amazon sellers have traditionally leaned on cost-effective Chinese manufacturing.
Notably, Amazon’s order cancellations suggest that the retail giant is proactively realigning its inventory strategy, potentially leaving third-party sellers without access to the usual volume or category-level support during key shopping windows.
Recent changes to US trade policy have eliminated duty-free treatment for low-value imports from certain regions, including China. This means that even inexpensive items previously exempt under de minimis rules are now subject to tariffs. For Amazon sellers, this could significantly impact cost structures, particularly for small, lightweight products that once benefitted from tariff-free entry. Sellers relying on high-volume, low-margin goods should reassess their sourcing strategies and factor potential duty costs into their pricing and inventory planning.
Key Risks to Amazon Sellers
The reemergence of tariffs introduces a suite of business risks:
- Margin Compression: Tariffs directly increase landed costs, which shrinks already thin margins. For sellers operating in competitive categories, raising prices to cover increased costs could mean losing the Buy Box.
- Inventory Bottlenecks: With uncertain lead times and possible supplier delays, stocking up for high-volume events like Prime Day or Q4 becomes a logistical gamble.
- Promotional Constraints: Reduced flexibility around pricing and inventory can limit sellers’ ability to run aggressive deals during critical periods.
- Stocking Risk in Tariff-Heavy Categories: If you’re over-indexed on electronics or household goods, you’re particularly vulnerable. Lead times could stretch from weeks to months.
- FBA vs. FBM Trade-Offs: Sellers may face tough decisions around which fulfillment method to prioritize. While FBA offers better placement and shipping speeds, FBM allows more flexibility in managing inventory outside Amazon’s network.
- Strategic Supply Chain Pivots: Planning for Q3 and Q4 means reevaluating supplier agreements, forecasting tools, and inventory thresholds, all while staying nimble.
How Amazon May React & What That Means for You
Amazon’s decision to cancel vendor orders in April 2025 is part of a broader strategy to realign its inventory and reduce exposure to tariff-induced cost volatility. The platform is prioritizing high-margin, high-velocity SKUs, and deprioritizing categories with high exposure to tariff-related cost volatility. This reshuffling could trickle down to sellers in the form of:
- Shifting Restock Limits: Amazon may lower restock limits for slower-moving or high-risk items, creating challenges for sellers trying to scale.
- Algorithmic Category Suppression: While not confirmed, sellers have speculated that Amazon could suppress listings in affected categories or limit visibility during peak periods.
- Data Prioritization: Categories with fewer returns, better IPI scores, and stronger sales velocity may be prioritized in search and promotions.
Amazon sellers on forums have already voiced concern that categories like home improvement, electronics, and beauty could see deprioritization, particularly if sourcing is heavily concentrated in China.3
Repricing, Resourcing & Risk Mitigation Strategies
There’s no universal playbook for tariff resilience, but there are proven strategies that can help Amazon sellers mitigate risk in this shifting economic landscape.
Start by nearshoring and diversifying your supplier base. Sourcing from regions like Mexico, Vietnam, or Eastern Europe can reduce reliance on Chinese manufacturing and build much-needed redundancy into your supply chain. This approach cushions your operations against geopolitical shocks and helps maintain production continuity even as tariff policies evolve.
Next, conduct a SKU-level risk analysis. Amazon’s business reports and select third-party tools allow you to pinpoint which products are most vulnerable due to high landed costs or extended supplier lead times. Monitoring these factors closely helps you make informed decisions about which SKUs to promote, pause, or retire.
Margin modeling is another crucial step. By simulating different tariff scenarios, you can recalculate product-level profitability and determine your breakeven cost-per-click (CPC) thresholds. This ensures your ad campaigns remain efficient and that you’re not sinking budget into products that can no longer turn a profit.
Inventory planning must also be adjusted to align with Amazon’s evolving restock policies. Focus on SKUs with strong sell-through rates and solid performance metrics to protect and potentially expand your restock limits. A high Inventory Performance Index (IPI) score can provide added storage space and operational flexibility during periods of heightened demand.
Finally, revisit your pricing model. Tariff-driven cost increases shouldn’t automatically lead to lost competitiveness. Use A/B testing, repricing tools, and elasticity analysis to find pricing sweet spots that maintain your margins without deterring buyers. Dynamic pricing strategies allow you to remain nimble in the face of cost volatility without ceding ground to competitors.
Action Plan: What Sellers Should Do Next
You don’t need to overhaul your business overnight, but you do need a concrete plan. Here’s where to start:
- Audit Your Supply Chain: Identify all sourcing regions and categorize products by tariff exposure risk.
- Simulate Scenarios: Run financial models to estimate how proposed tariffs would affect your most important SKUs.
- Update Listings: Factor in updated pricing, keywords, and sales copy that reflect current value, even with higher prices.
- Rethink Growth Forecasts: Incorporate tariff risks into your projections. Don’t assume that past growth will continue uninterrupted.
- Work with Amplifyy: Whether you’re evaluating supplier options, assessing SKU-level profitability, or building long-term forecasts, our team can help. We use real-time analytics, performance modeling, and tailored consulting to give you a clearer view of your Amazon health so you can make decisions with confidence.
- Design for Agility: Build flexibility into your ad budgets, promotions, and ordering windows. Use smaller batch orders or staggered purchasing to hedge against volatility.
The Inflection Point Is Here
The return of tariffs is a strategic tipping point. Amazon sellers are facing a new era of complexity, where adaptability is just as important as product–market fit. Success won’t come from waiting to see what happens; it will come from anticipating, planning, and acting.
Worried about the impact of tariffs on your margins? Let’s build a resilient path forward. Talk to Amplifyy about how we can help you strengthen your supply chain, optimize your pricing strategy, and unlock sustainable growth on Amazon.
Sources:
1. Amazon Cancels Some Inventory Orders from China After Tariffs, Fortune
2. US and China Pause Tariffs for 90 Days as Trump Claims “Historic Trade Win”, Ars Technica
