## Amazon Grapples with Tariff Impact as Jassy Acknowledges Price Creep
Amazon CEO Andy Jassy has indicated that the effects of broad tariffs are beginning to filter into consumer prices, as sellers navigate the added costs associated with imported goods. While many retailers and third-party merchants had strategically pre-purchased inventory to buffer against potential price hikes, Jassy noted that much of this buffer has diminished, leading to a more direct impact on product pricing.
In a recent interview at the World Economic Forum in Davos, Switzerland, Jassy explained the evolving dynamics. “We’re starting to see some of the tariffs creep into some of the prices,” he stated, observing a divergence in how sellers are responding. “Some sellers are deciding that they’re passing on those higher costs to consumers in the form of higher prices, some are deciding that they’ll absorb it to drive demand, and some are doing something in between. I think you’re starting to see more of that impact.”
This sentiment marks a departure from Jassy’s earlier remarks following the initial tariff announcements, when he suggested that Amazon hadn’t observed a significant increase in prices. At that time, he had also posited that some sellers might be compelled to pass on tariff-related expenses due to the tight margins inherent in many retail operations.
Concerns about rising import costs due to tariffs have been echoed by Amazon sellers themselves, who previously informed CNBC of their considerations and actions to adjust pricing. Industry groups had also warned of the potential fallout from escalating trade disputes, forecasting higher prices, reduced product availability, and potential job losses as companies grappled with inventory planning and increased operational expenses.
Jassy emphasized Amazon’s ongoing commitment to maintaining competitive pricing for its customers. However, he acknowledged that in certain scenarios, price adjustments may become unavoidable. “At a certain point, because retail is, as you know, a mid-single digit operating margin business, if people’s costs go up by 10%, there aren’t a lot of places to absorb it,” he explained. “You don’t have endless options.”
Despite these pressures, Jassy characterized consumer spending as “pretty resilient.” However, he did note observable shifts in purchasing behavior. Amazon is seeing some consumers opt for lower-priced alternatives and actively seek out deals. Concurrently, others are delaying purchases of more expensive discretionary items, suggesting a more cautious approach to significant expenditures. This dynamic highlights the delicate balance retailers must strike between managing increased costs and adapting to evolving consumer sensitivities in a fluctuating economic landscape.
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