April 28, New York — Amazon’s highly anticipated Prime Day is facing unexpected headwinds this year as many third-party sellers plan to scale back their participation, largely due to the financial strain caused by the escalating U.S.-China trade tariffs.
According to several sellers and consultants familiar with the matter, merchants who typically rely on China-manufactured goods are rethinking their strategies. Some are opting out of the event entirely, while others are offering fewer discounts to protect already thin profit margins.
One such seller is Steve Green, who imports bicycles and skateboards from China. Historically a regular Prime Day participant since 2020, Green has decided to skip the event this year. He plans to hold onto pre-tariff inventory and sell it at full price later, citing that the 145% tariffs implemented on April 9 would make importing new stock financially unsustainable.
Similarly, Kim Vaccarella, CEO of Bogg Bag — known for its China-made tote bags — is also withdrawing from Prime Day. Instead, she intends to offload her existing inventory through major retailers like Macy’s, Bloomingdale’s, and Dick’s Sporting Goods, while simultaneously shifting production to Cambodia and Vietnam to avoid future tariff issues.
Traditionally second only to Black Friday and Cyber Monday in terms of sales volume, Prime Day has always been promoted heavily by Amazon, promising sellers increased exposure to its 200 million global Prime subscribers. However, the new tariff environment is forcing many businesses to reconsider whether the benefits outweigh the costs.
Arun Sundaram, an analyst at CFRA Research, commented that while Amazon itself is unlikely to suffer significantly, the burden falls heavily on independent sellers who often operate with tight margins.
An Amazon spokesperson stated that the company is seeing “strong participation from sellers” for Prime Day 2025, despite these challenges.
With the deadline to sign up for Prime Day participation set for May 23, the pullback could lead to a smaller variety of discounted products, potentially reducing Amazon’s revenue from fees and advertising during the event. Last year, Prime Day generated $14.2 billion in U.S. consumer spending, an 11% increase from the year before, according to Adobe Analytics.
For some sellers, the risk of participating is simply too high. Rick Sliter, CEO of MedCline, a company selling therapeutic pillows made in China and Vietnam, said he is reconsidering offering discounts this year despite last year’s record-breaking sales during Prime Day. “Discounting just isn’t viable with these tariffs,” he noted.
Prime Day discounts often compress sellers’ margins dramatically. Typically, after Amazon’s 15% commission and additional promotional fees, sellers only retain about 15%-20% of their sales revenue as profit. Highlighting deals on Amazon can cost sellers anywhere from $500 to $1,000, adding even more pressure.
Adam Wilkens, a consultant advising dozens of Amazon merchants, said that many of his clients are still trying to finalize how tariffs will impact their pricing strategies — making Prime Day participation a lower priority for now.
Even larger vendors who sell directly to Amazon are being impacted, as many of their goods are also manufactured in China. Amazon CEO Andy Jassy recently shared that the company is making “strategic inventory buys” and renegotiating supplier terms to help mitigate price hikes for consumers.
Ahead of Prime Day, Amazon has reportedly been surveying sellers and vendors to better understand the effects of tariffs on their operations. Third-party merchants represented almost 62% of units sold on Amazon during the fourth quarter of 2024, according to Marketplace Pulse.
While some sellers are opting out entirely, others are experimenting with modest price increases, reducing advertising spend, or slowing down imports to minimize the financial blow.
Michael Slate, who runs KitchenEdge, a home goods company, said this year’s uncertainty has made discounting too risky. “I can’t promise a 20% discount when I don’t even know my future costs,” he explained.
Jon Elder, a consultant working with around 100 Amazon sellers, summed up the mood: Almost all of my clients are pulling back from Prime Day deals this year. It’s a tough environment with a lot of tough choices.
