Amazon sellers raise prices on items after Trump’s China rate

For 10 years, Aaron Cordovez has been selling kitchen appliances Amazon. He is now tied up because most of his products are manufactured in China.

Cordovez, co-founder of Zulay Kitchen, said his company is moving “as fast as possible” to move production to India, Mexico and other markets, which are increasing tariffs under President Donald Trump but are milder than taxes imposed on goods from China. The process is likely to take at least a year or two, he said.

“We’re continuing to stock as much as we can,” Cordovez said in an email.

Zulay is also temporarily raising prices for some milk freezes, roasting sticks and other products. The company’s popular kitchen strainer costs between $9.99 and $12.99 before Trump announced his sweeping tariff proposal earlier this month.

Amazon Merchants hike prices for everything from diaper bags and refrigerator magnets to charming necklaces and other top-selling items as they face higher import costs. E-commerce software company SmartScout has tracked 930 products on Amazon that have seen prices rise since April 9th. There was an average jump of 29% in categories, including clothing, jewelry, household items, office supplies, electronics, toys.

In a statement to CNBC, an Amazon spokesperson called the claim “sensational” and said the study covers “a small portion of our store.” Based on the research’s view, Amazon said “less than 1% of the items surveyed had a price increase.”

“We have not seen an average selling price of a product change outside the typical range of fluctuations across hundreds of millions of items on Amazon,” the statement said. “And we continue to meet other retailers, compared to other retailers of most items, to the price.”

The trade war with China has threatened to overturn sellers in Amazon’s third-party market, which accounts for around 60% of the company’s online sales. Many merchants either are based in China or rely on the world’s second largest economy to source and assemble products.

Sellers are currently facing the challenge of raising prices or eating additional costs associated with Trump’s new tariffs. This is an existential threat to many sellers. Many sellers have been present in the thin margins of razors and have dealt with rising Amazon costs related to storage, filling, shipping and advertising fees over the past few years, as well as price pressures from increasing competition.

CEO Andy Jassy told CNBC earlier this month that the company is “trying to try and do everything possible” to keep shopper prices low, including terms of renegotiation with some suppliers. However, he acknowledged that some third-party sellers need to “pass” the costs of the tariff to consumers.

Amazon’s stock has fallen 15% so far this year, sliding along with the broader market. The company reports first quarter revenue next week.

While goods imported from China are currently facing 145% of import operations, Trump said Wednesday that his administration is “actively” talking about potential deals that will lower tariffs. Chinese on Thursday denied that trade talks were taking place.

Approximately 25% of the price rise observed by SmartScout was started by Chinese-based sellers, said Scott Needham, the company’s CEO. Last week, stainless steel jewelry maker Urstell hiked the price of four products for $6.50, while apparel brand Chuyato has raised some of its dresses by $2. Both companies are based in Zhijiang Province, China.

Anker, a Chinese electronics brand and one of Amazon’s biggest sellers, has raised prices by a fifth of the products sold in the US.

Representatives of Anker, Ursteel and Chouyatou did not respond to requests for comment.

Headquartered in Florida, Zlay is one of many US-based sellers that raise prices. The company is also reducing costs. Cordovez said he was forced to fire 19% of his workforce and cut online advertising spending by 85%.

Illinois-based dessert cactus is also taking action. The company’s president, Joe Stefani, is about to move some of his brand’s university-themed products from China to Mexico, India and Vietnam. About half of the desert cactus products come from China, while the rest is made in the US, Stefani said.

One of the company’s top products is a customizable license plate frame manufactured in China. At the start of Trump’s first term in 2016, Stefani’s company paid 4% import fees and shipping fees on the license plate. That rate has since surged to 170%, he said.

“Taxes cannot remain this high,” Stefani said. “There are a lot of people who aren’t going to make it.”

Stefani said he expects desert cacti to raise prices for some products, but shoppers are worried that sticker shocks will delay it.

“Is someone willing to pay $50 for a hat on Amazon?” Stefani said. “I know it’s expensive at the ballpark, but I don’t know on Amazon.”

Dave Dama, co-founder of Health and Beauty Business Pure Daily Care, said the price to manufacture one of his skincare products in China jumped between $10 and $25. Most Amazon sellers have no choice but to raise prices, he said.

“If you were selling something for $40 and making a profit of $7 or $8 at the end of the day, these duties mean it’s gone for the day,” Dama said. “We can’t do that anymore. It’s unsustainable.”

Pure daily care is only to stagger prices over weeks, and to ensure that Amazon’s algorithms do not lower it in search results or lose valuable purchase boxes only on “we absolutely necessary” products. The purchase box shows which list pop up first when a shopper clicks on a particular product, and what will be purchased when you tap “Add to Cart”.

An Amazon spokesperson said the company’s pricing policy continues to be applied.

“As always, sellers set their own prices and we regularly monitor how we emphasize excellent prices as feature offers to offer customers a lower price across a wide selection,” the spokesperson said in a statement.

Dama said his company has enough stock to last up to six months. The company also pauses spending on several display and video ads, whilst refraining from several sales promotions and discounts.

Regarding his inventory, Dama said, “We can try to extend that seven, eight or nine months.