Amazon Chief Executive Officer Andy Jassy said consumers are beginning to see higher prices as sellers respond to added costs tied to tariffs imposed under President Donald Trump, marking a change from earlier indications that prices had remained stable.
Inventory Stockpiling Delayed Price Increases
Speaking to CNBC, Andy Jassy said Amazon and many of its third-party sellers had stocked up on inventory ahead of the tariffs in an effort to keep prices down. That strategy helped delay price increases, but Jassy said most of that inventory was exhausted by last fall.
As a result, sellers are now making different pricing decisions. Jassy said some are passing higher costs on to consumers through price increases, while others are absorbing the added expenses to maintain demand, with some taking a mixed approach.
“So you start to see some of the tariffs creep into some of the prices, some of the items, and you see 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,” Jassy said. “I think you’re starting to see more of that impact.”
Shift From Previous Price Outlook
Jassy’s comments reflect a shift from last year, when he said prices had not increased following the tariff announcements by Donald Trump. On Tuesday, Jassy acknowledged that while Amazon continues to focus on keeping prices low, higher prices may be unavoidable in certain cases.
“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,” Jassy said. “You don’t have endless options.”
Consumer Behavior Amid Higher Costs
Despite the impact of tariffs, Jassy said consumers remain resilient. He noted that some shoppers are responding by shifting toward lower-priced items and searching for bargains, while others are delaying purchases of higher-priced discretionary goods.
Featured image credits: Heute.at
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