In the world of e-commerce, few forces wield as much influence as Amazon. As the go-to marketplace for millions of consumers and a battlefield for thousands of brands, Amazon is shaped by many global economic factors, one of the most significant being international tariffs. With global supply chains spanning continents, top Amazon brands are continuously adjusting to the shifting landscape of trade policies, especially tariffs imposed between economic giants like the United States and China. This blog explores how leading Amazon sellers are responding to tariff changes—what they are doing to adapt, and equally important, what they aren’t doing.
Understanding the Tariff Landscape
Tariffs are essentially taxes imposed on imported goods. The U.S.-China trade war that began in 2018 triggered a cascade of tariff increases, significantly impacting the cost structures for countless products sold on Amazon. Even after certain rollbacks and negotiations, many of these tariffs remain in place or have been replaced by new ones targeting other regions.
Amazon sellers, particularly those relying on Chinese manufacturers, have had to rethink their sourcing, pricing, and operational strategies to stay competitive and profitable. As tariffs fluctuate, these businesses face the challenge of either absorbing the extra costs, passing them on to consumers, or finding creative ways to sidestep the issue altogether.
What Top Amazon Brands Are Doing About Tariffs
1. Diversifying Supply Chains One of the most proactive measures top Amazon brands are taking is diversifying their supply chains. Rather than relying solely on Chinese manufacturers, many are exploring production in Vietnam, India, Mexico, and Eastern Europe.
This shift doesn’t just help reduce tariff exposure; it also mitigates risk from potential supply chain disruptions due to geopolitical tensions or pandemics. For example, electronics brands that once sourced 90% of components from Shenzhen are now spreading procurement across multiple countries.
2. Reengineering Products to Avoid Tariff Classifications Some brands are tweaking their product designs to fall under less heavily taxed categories. For instance, small changes in materials or components can shift a product into a different Harmonized Tariff Schedule (HTS) code, significantly reducing import duties.
A top Amazon kitchenware brand reengineered their silicone baking mats to include more composite materials, thus qualifying for a lower duty rate. These technical adjustments require R&D investments but can lead to long-term savings.
3. Leveraging Duty Drawback Programs Duty drawback is a U.S. customs program allowing businesses to reclaim tariffs paid on imported goods that are eventually exported. While complex, some sophisticated Amazon sellers are using this to recapture costs, especially those who sell internationally.
Brands that fulfill global orders through Amazon’s marketplaces in Canada, the EU, and Asia find this strategy especially beneficial. By setting up legal and logistical infrastructure to track these shipments, they’re turning tariff liabilities into recoverable costs.
4. Raising Prices Strategically While not an ideal solution, raising prices has become a necessary tactic for many sellers. However, instead of a blanket price hike, top brands are using AI-driven pricing tools to optimize their listings.
These tools allow them to pass on some of the tariff-related costs without significantly hurting conversion rates. Smart repricing based on demand elasticity, competitor pricing, and seasonal trends helps preserve margins while remaining competitive.
5. Investing in Localized Manufacturing In some cases, Amazon brands have invested in U.S.-based or regional manufacturing hubs to bring production closer to their primary markets. This not only avoids import tariffs but also enables faster shipping and better quality control.
Apparel and supplement brands, in particular, have made this shift. Although the initial investment is high, the long-term benefits in reduced tariffs and faster time-to-market make it a compelling strategy.
6. Collaborating With Logistics Experts Customs compliance is a specialized field, and top brands are partnering with trade compliance consultants and logistics experts to navigate the maze of import/export regulations.
These partnerships ensure that brands remain compliant while also taking advantage of legal tariff minimization strategies. With constant updates to trade laws, this expert support is invaluable.
What Top Amazon Brands Aren’t Doing About Tariffs
1. Ignoring Tariff Risks Interestingly, some brands—even well-established ones—are still not taking tariffs seriously. Whether due to lack of awareness, internal bandwidth, or optimism that trade tensions will ease, they haven’t taken concrete steps to mitigate tariff risks.
This lack of preparation often leads to last-minute decisions, stockouts, or margin erosion. The competitive nature of Amazon leaves little room for such missteps.
2. Educating Consumers About Tariff-Driven Price Changes Few brands are transparent with their customers about the reasons for price increases. Instead of framing it as a result of macroeconomic forces, they simply raise prices, risking customer dissatisfaction.
Some e-commerce analysts argue that brands could foster greater trust by being transparent about how tariffs are affecting their business. However, only a handful of sellers have adopted this strategy.
3. Taking Full Advantage of Trade Agreements Despite the potential cost savings, many brands fail to fully leverage trade agreements like USMCA or ASEAN free trade pacts. Whether due to the complexity of qualification requirements or lack of knowledge, they miss out on tariff reductions they could otherwise access.
Educational gaps in this area mean that even high-performing sellers may leave money on the table.
4. Sharing Tariff Strategies Across Teams In some organizations, tariff strategies remain siloed within operations or logistics departments. Marketing, finance, and product development teams are left out of the loop.
This lack of cross-functional collaboration results in missed opportunities, such as adjusting product offerings, marketing claims, or bundling strategies to account for tariff-influenced costs.
5. Building Advocacy or Policy Engagement Surprisingly few Amazon brands are actively involved in trade policy discussions or business associations that advocate for fairer tariffs. Larger consumer brands often engage in lobbying or coalition-building, but Amazon-native brands rarely do.
This leaves them vulnerable to future tariff shifts and without a voice in the policy-making process.
Conclusion
Tariffs aren’t going away. If anything, global trade is becoming more complex and volatile. Top Amazon brands that take a proactive, data-driven, and strategic approach to tariffs will have a competitive edge in the years to come.
While many are adapting admirably—through supply chain diversification, strategic pricing, and manufacturing shifts—others are lagging in key areas like transparency, cross-department collaboration, and policy engagement.
Success in the Amazon marketplace requires not just operational excellence but also geopolitical awareness and financial foresight. Tariffs are a tax on ignorance as much as they are a tax on imports. The best brands understand this—and act accordingly.