"So you start to see some of the tariffs creep into some of the prices, some of the items, and you see some sellers are deciding that they're passing on those higher costs to consumers in the form of higher prices, some are deciding that they'll absorb it to drive demand and some are doing something in between," Jassy said. "I think you're starting to see more of that impact."
"At a certain point, because retail is, as you know, a mid-single digit operating margin business, if people's costs go up by 10%, there aren't a lot of places to absorb it," Jassy said. "You don't have endless options."
"Despite the tariffs, consumers are "pretty resilient," Jassy said, noting that some shoppers are shifting to cheaper items and bargain hunting, while others are putting off premium discretionary purchases."
Tariffs imposed by President Donald Trump are beginning to raise consumer prices as sellers face added costs. Amazon and many third-party sellers stocked up on inventory ahead of the tariffs to keep prices low, but most of that inventory ran out last fall. Some sellers are passing higher costs to consumers in the form of higher prices, some are absorbing costs to drive demand, and others are using mixed strategies. Retail operates on mid-single-digit operating margins, so a roughly 10% cost increase leaves few options to absorb expenses. Consumers remain relatively resilient and adjust purchasing behavior.
Read at TechCrunch
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