Rising Prices Amid China-U.S. Trade War Hurts Amazon Sellers
Amazon sellers are starting to feel the brunt of the China-U.S. trade war as prices need to be increased in a bid to curb losses. Sellers who promote their products through the U.S. e-commerce platform are in a bind, analysts said.
According to Bloomberg, Amazon sellers both from China and the U.S., as well as other foreign merchants, are in a chaotic bind as they face the pricing problems stemming from the escalated trade war.
Economists noted that the issue is heavier than ever as U.S. President Donald Trump announced that he is considering slapping another $300 billion of tariffs on Chinese goods centered on consumer goods.
Some Amazon merchants already raised prices after the first 25% tariff increase in some Chinese products took effect. However, the results were lackluster. Sales dropped and popularity levels within the platform slipped.
"The smaller companies have a significant problem," managing director of U.C. San Diego's Supply Chain Management Institute, Joel Sutherland noted. His statements complement the apparent struggles that individual sellers on Amazon experience.
Unlike bigger companies that have other outlets and channels through which they can sell, many Amazon merchants own small- or medium-sized businesses that do not have the guts big sellers have in terms of securing deals elsewhere.
Online retail experts warned that it's not just the merchants and sellers at risk in the China-U.S. trade war. Instead, Amazon itself may be in trouble if the trade war escalation continues on the path it is treading.
The American e-commerce behemoth may be forced to cut down on merchant commission charges if sellers rally to call on fairer fees amid rising prices and low sales. This could result in slower revenue figures, experts said.
Despite the uncertain environment that Amazon sellers are in, many are hoping that the upcoming meeting between China's Xi Jinping and U.S. President Donald Trump will end in good terms.
Chinese Vice Minister of Commerce Wang Shouwen said during a media briefing on Monday that trade talks between the two sides should see both China and the U.S. sharing equal efforts in meeting the other halfway, the South China Morning Post reported.
For Wang, Washington's unilateral demands will not help with its plan to iron out trade deficit issues with Beijing. Wang argued that there should be respect for the World Trade Organization (WTO) and sovereignties of the two giant economies.
The two leaders will meet at this weekend's G20 Summit in Osaka. Economists said much of what will happen to Amazon's merchant woes will depend on the negotiations between China and the U.S.