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Amazon is ‘maniacally focused’ on lowering price despite tariffs

As tariff-induced cost increases loom, CEO Andy Jassy says there’s never been a more important time to keep prices low.

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3 min read

A new Gallup poll released last week found that 89% of Americans believe it’s likely the Trump administration’s tariffs will raise the price of goods for consumers.

Meanwhile, in the corporate world, retail executives are signaling that keeping prices low remains not only a possibility, but for some a top priority.

In its latest earnings call, Amazon CEO Andy Jassy told shareholders “there’s never been a more important time in recent memory” for keeping prices low, and that the e-commerce giant is “maniacally focused” on this goal.

And so far, tariffs have yet to put a damper on demand or push up prices. While there has been evidence of consumers stocking up in some categories, Jassy said demand is holding steady and the average selling price of retail items has yet to “appreciably go up.”

Amazon is nonetheless taking precautions by forward purchasing some inventory where it’s the first-party seller—a move that some of its third-party sellers have taken as well.

All this tariff talk came on the heels of a brief kerfuffle between Amazon and the Trump administration earlier in the week. Responding to reports that the company planned to display the added cost of tariffs on certain items, White House Press Secretary Karoline Leavitt called the move a “a hostile and political act.” Amazon has since said it has no such plan.

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"The team that runs our ultra low cost Amazon Haul store considered the idea of listing import charges on certain products," the company said in a statement. "This was never approved and is not going to happen.“

Suppliers compete on price: As Wayfair CEO Niraj Shah emphasized during his own earnings call last week, breaking out the cost of tariffs is a complicated business, and there are several mediating factors to consider.

The way it works for the discount furniture outlet is suppliers offer a wholesale price, and the more competitive prices usually succeed best in the store, so “when an incremental cost like a tariff enters the system, suppliers have to make a decision on how much they want to pass through versus bearing themselves.”

In other words, there’s a strong incentive to eat the cost. 

And from Wayfair’s perspective, if a price is passed through to the retailer, they are just as likely to substitute that product for another.

“This is where the marketplace-like forces on our platform work most in our favor,” Shah said. “The category we operate in is largely unbranded and highly substitutable.”

Unfortunately for suppliers, a number of retail giants have built out their marketplaces in recent years, potentially extending this competitive dynamic across the industry.

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.