Chinese Amazon Sellers Have A Difficult Choice To Make, You Won't Like It
Get ready for some possibly big changes the next time you shop on Amazon. With nearly half of Amazon resellers being based in China, the recent Trump Administration trade tariffs are expected to affect not just the price of goods, but potentially reduce the available selection. With the new import taxes (as high as 125%) going into effect, many Chinese companies are mulling between raising prices on Amazon or leaving the marketplace altogether.
One could say that the new tariff war initiated by President Donald Trump is a modern World War 3 of sorts. Import tax hikes are being thrown left-and-right by almost all the major powers like intercontinental missiles. We've seen stocks hit bear territory and world citizens recoil in shock over possible supply shortages and price hikes, with the potential for a deep recession. But hey, at least we're not having to wear masks while all this is going on.
For those who like to shop at Amazon, be ready for the tariffs to have a reciprocal effect soon. With Jeff Bezos' marketplace brainchild being the most popular online shopping platform worldwide and the fact that a significant number of Amazon sellers are based in China, customers could be in for a ride as Chinese sellers raise prices or exit the marketplace completely. Currently, of the 1.9 million active registered Amazon businesses, around half are from China, with more than 100,000 based in Shenzhen, the country's equivalent of Silicon Valley.
Raising prices isn't merely a tax issue, but according to Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, "the entire cost structure gets entirely overwhelmed." Components, ingredients, labor, logistics, fees, and not to mention delays and shortages—pretty much every aspect along the product's path to your front door could very well be affected. The potential blow to the entire e-commerce system is leading many Chinese companies to find new markets, be it exploring untapped countries or online shopping sites like AliExpress, Temu, etc.
Amazon customers have already seen prices increase on items like toys and electronics. Dave Fong, who sells speakers and school supplies has had to raise his prices by up to 30% and is even considering refocusing his investment elsewhere. Fong said, "For us and anyone else, you can't rely on the U.S. market, that's quite clear," and instead, "we have to reduce investment, and put more resources into regions like Europe, Canada, Mexico and the rest of the world."
