This post was originally published on this site.
Amazon is seeking cuts to what it pays to suppliers for the products it sells itself on its e-commerce platform, as it moves to reverse concessions it offered to vendors earlier amid the impact of White House tariffs, the Financial Times reported.
The company is seeking discounts from suppliers ranging from the low single digits to up to 30 percent, the paper said, citing vendor consultants who negotiate on behalf of multiple brands and suppliers.
Accelerated talks
Amazon reportedly accelerated talks with some suppliers by several weeks, and in some cases sought to impose a 1 January deadline, ahead of an expected Supreme Court ruling over the tariffs that may arrive this week.
Last year, Amazon agreed to increase the prices it paid to some suppliers in return for guaranteed minimum margins, but it is now seeking to claw back those concessions, arguing to vendors that tariffs have not been as severe as first feared, the report said.
The company is reportedly seeking to shift the risk of further trade volatility to suppliers by asking them to take responsibility for paying any duties on goods they sell.
It has reportedly said it will accept smaller discounts from suppliers if they agree to pay any tariffs and to spend more on marketing and promotions.
Vendors and their advisors have argued that Amazon’s negotiations are not taking into account the rising cost of goods due to supply chain disruption, as well as higher labour and raw materials costs.
The talks relate to goods that Amazon sells itself, and not to those sold by third-parties using Amazon’s platform.
Legal uncertainty
Amazon said it understands vendors’ price pressures and factor them into negotiations and that it has made no changes to its annual vendor negotiation cycles.
The US Supreme Court is expected to rule imminently on whether the executive branch has the legal right to impose tariffs under emergency powers.
If it rules against the White House, trade lawyers and diplomats have warned that it could set off a wave of new tariffs under alternative legislation.