Amazon sellers retreat from Prime Day amid tariffs and rising costs

[WORLD] Amazon’s Prime Day, once a cornerstone sales event for third-party merchants, is losing favor among a critical segment of sellers. This year, a number of vendors—particularly those dealing in China-manufactured goods—are opting out or scaling back their participation, citing mounting financial pressures.

The retreat is largely driven by escalating costs associated with U.S. tariffs on Chinese imports, which have narrowed profit margins on a wide range of consumer products, from electronics to household items. With the U.S. maintaining a 25% levy on billions of dollars' worth of goods from China, small and mid-sized businesses—many of which rely heavily on Chinese manufacturing—are finding it increasingly difficult to offer the steep discounts Prime Day demands. In response, some are shifting focus to higher-margin items or exploring alternative suppliers in countries like Vietnam and India.

According to four sellers and six consultants representing hundreds of merchants on the platform, this pullback—previously unreported—reflects a strategic effort to safeguard profits amid ongoing trade tensions stemming from tariffs first imposed under the Trump administration.

Adding to the strain, Amazon has raised fees for storage and order fulfillment over the past year, further eroding margins for sellers. These third-party vendors, who account for more than half of Amazon's marketplace transactions, say the combined burden of tariffs, rising operating costs, and the expectation to offer aggressive Prime Day deals has made participation less viable. “The math just doesn’t work like it used to,” said one seller, speaking on condition of anonymity due to concerns about their standing with Amazon.

Sellers are also eyeing competing events from rival retailers such as Walmart’s “Deals for Days” and Target’s “Circle Week,” which provide alternative platforms with more favorable fee structures. Some vendors are reallocating inventory and advertising budgets to these competitors in hopes of achieving better profit margins without engaging in the intense price-cutting that characterizes Prime Day.

Despite these headwinds, Amazon continues to hold significant sway in the online retail landscape, and Prime Day remains a key opportunity for brand exposure. Still, the evolving dynamics signal a broader shift as third-party sellers reassess how best to balance the immediate revenue surge from Prime Day with the need for sustainable profitability in a volatile trade climate.

The trend underscores how international trade tensions and changing marketplace economics are beginning to reshape what has traditionally been one of Amazon’s most lucrative annual events.