On May 1, Amazon tried to reduce investor concerns about the impact of US President Donald Trump’s prices on its genitals, but the company may have few options to ensure that young sellers remain in the face of cracking prices.
Trump imposed 145 % of the customs tariffs on China’s imports, which is to leave companies such as Amazon, Walmart and Apple seeking to reassess display chains and find ways to maintain low costs.
Amazon said, “We haven’t seen any skepticism of the request,” nor many medium elements for retail. He said that there is an “increase in purchases in some groups,” which indicates that sellers who are used by external sources are stored to reduce any definition effect.
But analysts are the storage is just a “dressing”. Due to the intensification of consumers to avoid the effects of definitions, the company and the sellers can have difficulty avoiding prices in the coming months while running out of stocks and setting new orders.
“I cannot imagine that they have stored more than six months of products,” said the Davidson analyst.
“If we pass in the next six months and we are still not confirmed as we are, Amazon will have to take less acceptable steps. It will have to pass some high prices, and take some low margins in terms of structurally, on the pressure of its merchants to absorb the low margins.”
For Apple, Amazon and Amazon companies, including Qualcomm, Samsung and Intel, who are exposed to ordinary consumers, have become a crisis that can harm them in a conflict against Microsoft and Google.
On Thursday, the iPhone manufacturer estimated that the customs tariff would add about $ 900 million of costs to the quarter that ends in June if the prices did not change. Tim Cook, Apple CEO, explained the main changes in the company’s show chain.
The AWSA Cloud of Amazon, which leads its profits, is usually like the fluctuations in its work in its works, but the performance of this sector in the first quarter has disappointed Wall Street after it exceeded Microsoft Azure Cloud.
Investors said of great expectations regarding the cloud companies, which were reinforced by the results of Microsoft and Google and the increasing expectations of Amazon, that Will Rhip, President of Graniteshares, Global Etf Browcaster.
“But I still think this is great and is still growing,” he said.
Amazon tariff problems extend more than just a large tariff.
It is expected that the end of the trade exemption for low -cost commodities sent directly to buyers to enter the United States without taxes, has a significant impact on some sellers who have been used external sources of the company and their business, which send a lot of China’s goods.
The decline has already began to appear. Reuters said that some sales representatives are already planning to leave the main sales events, such as Amazon Prime Day in July.
The growth of revenue from services to sellers from Amazon has slowed more than half, to 7 % in the first quarter, except for the effect of the exchange rate. Services represent sales representatives to use external sources approximately 25 % of the company’s revenues.
Although Amazon expects total sales to the second quarter over Wall Street estimates, the profitability perspective below.
Amazon Andy Jassy CEO said in connection with analysts that the company is working with its sellers to transfer requests to the United States to avoid more customs tariffs on goods.
“The sales representative abroad resisted the use of external sources to a number of elements so that they have stocks here too … We encourage him because we are trying to maintain prices as low as possible,” Jassi said.
Amazon didn’t say somehow on sellers to maintain low costs, or whether the company will get a portion of the effect on their own.