The 10% tariff increase that took effect on February 4, 2025, has raised concerns among Amazon sellers. However, the actual impact on business might not be as significant as many fear. With the right strategies, Amazon FBA sellers can continue to thrive in the coming year. Here’s why:
- The Tariff Increase Has a Minimal Impact on Cost Structure
Many sellers worry that the new tariff will cut into their profits, but the actual effect on overall costs is relatively small.
- Declaration Practices Matter: When importing goods, customs duties are calculated based on the declared value, which for most Amazon sellers is the procurement cost rather than the retail price.
- Example: A pet grooming brush selling for $7.99 on Amazon may have a procurement cost of around $1.50. If the declared value for customs is $0.50, the additional 10% tariff amounts to just $0.05 per unit—a negligible increase in costs.
- Third-Party Logistics Providers Offer Tax-Inclusive Shipping
Many Amazon FBA sellers rely on third-party freight forwarders who provide tax-inclusive shipping solutions. These logistics providers bundle all costs, including duties and tariffs, into a single shipping fee, ensuring that sellers do not bear the burden of fluctuating customs rates.
- The End of the $800 De Minimis Exemption Benefits FBA Sellers
One major change accompanying the new tariff policy is the removal of the $800 de minimis exemption, which previously allowed shipments under $800 to enter the U.S. duty-free. This change has a greater negative impact on direct-to-consumer (DTC) sellers relying on platforms like Temu, Shein, eBay, and independent stores, which frequently ship low-value orders via small parcels.
For Amazon FBA sellers, this is actually good news:
- Less Competition from DTC Sellers – The additional customs costs make it harder for smaller e-commerce businesses to undercut FBA sellers.
- Stronger Positioning for FBA and Walmart Sellers – Businesses using Amazon fulfillment centers or third-party U.S. warehouses are better positioned since bulk shipments remain cost-effective compared to individual parcel shipments.
- Amazon FBA and Walmart Marketplace Remain Profitable
Despite the tariff changes, Amazon FBA and Walmart Marketplace continue to offer profitable opportunities:
- Prime Shipping Advantage – Customers prioritize speed and convenience, and Amazon FBA ensures fast delivery times, which DTC sellers can’t easily match.
- Stable Supply Chain – Using consolidated freight solutions and local warehouses helps mitigate customs costs while maintaining a competitive edge.
- Scalability – Amazon’s built-in logistics and customer base provide a more stable environment for sellers compared to the fluctuating nature of independent e-commerce.
Final Thoughts
While the 10% tariff increase may seem concerning at first, the reality is that its impact on overall costs is minor for Amazon FBA sellers. The removal of the $800 de minimis exemption further strengthens the competitive position of those using FBA and third-party warehouses. With efficient supply chain management and tax-inclusive logistics, 2025 remains a promising year for Amazon sellers to continue growing and maximizing profits.
Stay focused, adapt to the changes, and keep scaling your business. 2025 is still a great year to make money on Amazon!