Amazon CEO: Tariffs may allow Amazon to gain more market share. Fer House
Thu, 07 May 2025 16:30:00 GMT Amazon CEO: Tariffs may allow Amazon to gain more market share
Amazon CEO Andy Jassy recently compared the U.S. trade war to an epidemic in a recent exchange with analysts, saying Amazon could gain more market share against that backdrop. He said the tariffs had little impact on first-quarter results, with online store net sales up 5 percent year-over-year to $57.4 billion and brick-and-mortar sales up 6 percent to $5.5 billion.
Within that, product net sales grew 5 percent to nearly $64 billion. Revenue from third-party seller services grew 6 percent to $36.5 billion; advertising grew 18 percent to nearly $14 billion; and subscription services grew 9 percent to $11.7 billion. Combined with $11.5 billion from AWS cloud services, the company's operating profit grew more than 20 percent to $18.4 billion.
However, global transportation costs increased 3 percent to $22.5 billion.
Jassy said that global consumers had previously flocked to Amazon during the New Crown epidemic, and that the Trump administration's tariff policies could again drive consumers to Amazon, which offers a wide variety of competitively priced goods.
He added: “In an environment of uncertainty, consumers tend to choose the suppliers they trust the most. Given our wide selection of products, affordable pricing and fast delivery service, we have always been able to gain higher market share after these periods of uncertainty and build a stronger foundation for future growth. I am optimistic that this will happen again.”
Jassy further noted that Amazon and its many sellers have been stocking up ahead of time in response to the new tariff policy. Overall, Amazon has a diverse group of sellers and not all of them will raise their prices. This, coupled with Amazon's inventory management efforts, has helped to keep overall prices on the site stable and free of significant increases.
“The present moment is probably one of the most critical moments in the near future, and we're fully, almost frantically focused on keeping prices low, getting items to customers quickly, and providing great service.”
Wall Street analyst Dylan Carden noted in a research note that Amazon's current tariff strategy is roughly the same. Amazon did not participate in a meeting of retail executives with President Trump on the trade war late last month, which was also attended by major retailers such as Walmart, Target and Home Depot.
Carden said, “Management has not commented much on its tariff strategy, but seems to be relying heavily on its diverse base of about 2 million sellers, which should lead to geographic flexibility to deal with the types of tariffs that could be implemented after negotiations.”
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