Latest news with #SmartScout
Yahoo
01-05-2025
- Business
- Yahoo
Trump's Tariffs Are Already Causing Price Spikes on Amazon
Some China-based sellers have already increased their prices on Amazon. Amazon made $8 billion from China-based sellers' advertising last year. E-commerce and ad sales could feel the pinch if tariffs stay in place. Well, that didn't take long. Just a few weeks after President Donald Trump announced his aggressive tariffs, some China-based sellers on Amazon (NASDAQ: AMZN) have started increasing their prices -- sometimes significantly. While Trump said recently he's in talks with China to work out trade deals, the U.S.-imposed tariffs of 145% began earlier this month. Here's how they're impacting Amazon and why it's a problem for the e-commerce giant. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » It's an understatement to say that the 145% tariff on Chinese imports is bad news for Amazon. An estimated 60% of the products sold on its e-commerce platform are imported from countries across the globe, and Morningstar estimates that one-third of those imports come from China. SmartScout data shows that of the sellers increasing prices on Amazon over the past few weeks, one-quarter of them are based in China. Moreover, prices have increased by a whopping 29% on average from these sellers. Higher prices will likely cause some consumers to pull back on their spending and some recent data shows that American buyers are already getting skittish. Consider this latest data: A University of Michigan survey found that consumer sentiment is at its lowest in 32 months. Yale's Budget Lab research shows that tariffs could cost consumers $3,800 annually. A separate survey found that 45% of Americans plan to spend less on non-necessities and 33% intend to spend less on necessities over the next year. The point is that tariffs are already causing prices to rise for some products on Amazon, which could impact e-commerce sales, and the higher prices are colliding with belt-tightening by consumers. That's a recipe for Amazon's falling e-commerce sales. Another concern for Amazon is that during economic downturns, advertising sales usually slow down. For example, ad spending fell 7.5% across the industry because of the COVID-19 pandemic. Amazon's ad sales rose 20% in 2024 to $56.2 billion and now account for nearly 9% of its total sales. While there's no data yet on Amazon's ad sales slowing, it's worth noting that an estimated $8 billion of the company's advertising revenue came from China-based sellers last year. With those sellers feeling the pinch from tariffs, they may be less inclined to spend money on ads. And if U.S. consumers start spending less on Amazon's platform as they pinch pennies, there will be far less incentive to buy ads. Despite these uncertain circumstances for Amazon, current investors may not want to panic just yet. The Trump administration appears open to trying to ratchet down the trade war with China, with President Trump saying recently that the tariff rates are high and need to come down. What's more, Amazon makes the majority of its profit from Amazon Web Services (AWS), its cloud computing business. AWS accounted for 58% of the company's operating income in 2024, and its sales increased by 19%. AWS also holds a majority of the cloud computing market with 30%, compared to 21% for Microsoft. Since AWS is a cloud service, it's unlikely to be impacted by tariffs. And as artificial intelligence (AI) cloud services grow in the coming years, Amazon is tapping into a growing AI cloud market that will be worth an estimated $2 trillion by 2030. Still, investors should keep an eye on what's happening with China tariffs and any additional signs that consumers are pulling back on spending. There's a lot of uncertainty right now, and that means Amazon's stock could remain volatile for the foreseeable future. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $282,717!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $40,044!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $607,048!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of April 28, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Trump's Tariffs Are Already Causing Price Spikes on Amazon was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
01-05-2025
- Business
- Yahoo
As Trump's Tariffs Continue to Cause Chaos in the Market, Mark Cuban Warns About an "Ugly" Future for Amazon
President Donald Trump's tariffs have been whipsawing the stock market for weeks now, pushing the S&P 500 and the Nasdaq Composite into a correction as investors struggle to divine the impact of the ongoing trade war. While stocks have sold off broadly on the news, some names have gotten hit harder than others. One big-name stock that has fallen more than 20% from its peak is Amazon (NASDAQ: AMZN), the "Magnificent Seven" member that dominates both e-commerce and cloud computing. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Now, one well-known billionaire is calling out Amazon's tariff risk. Mark Cuban, a tech entrepreneur who's known for his role on the TV show Shark Tank and as the former owner of the NBA's Dallas Mavericks, recently said on the social media site Bluesky that the current tariff situation could get "ugly" for Amazon: This embedded content is not available in your region. Just how vulnerable is Amazon to Trump's tariffs? Let's explore what an extended trade war could mean for the tech giant. Amazon has built a far-reaching business empire, but the company isn't immune to the business cycle. In fact, it has more exposure to economic slowdowns than retail peers like Walmart or Costco Wholesale because nearly all of its e-commerce sales come from discretionary products like books, electronics, or clothes and accessories. While both Walmart and Costco make a majority of their revenue from consumer staples like groceries, Amazon earns only a small fraction of its revenue from groceries and other staples. Amazon Web Services, its cloud computing service that has typically been its primary engine of profits, is also vulnerable to a recession, as its growth depends on business expansion and formation. Therefore, tariffs on China could impact Amazon in two ways. First, they will make it more expensive for the retailer and its marketplace sellers to import Chinese goods. Second, a recession or an economic downturn could slow both consumer and business spending, affecting its business across the board. It's only been a few weeks since the trade war with China took off, but there are already signs that the new tariffs are affecting Amazon. Third-party sellers have been forced to raise prices on imports from China to accommodate the new import taxes. SmartScout, the e-commerce data company that made the chart shown in Mark Cuban's post above, found that prices on 930 products it tracked (in categories like clothing, electronics, and toys) rose 29% on average since April 9. Amazon responded by saying that fewer than 1% of the items referenced had their prices increased. If SmartScout's research is accurate, its chart shows that tens of billions of dollars in Amazon Marketplace sales are at risk from the tariffs, as China is a significant source of many of Amazon's product categories. Nearly three quarters of Amazon's e-commerce revenue comes from North America, showing its significant exposure to the American market. Third-party sellers that are struggling with tariffs are likely to cut back on advertising spending on Amazon, a significant source of profits for the company. The silver lining for Amazon on tariffs is that the majority of its operating income comes from Amazon Web Services (AWS), and services can't be tariffed. Still, economic uncertainty could slow down growth in that business, which happened in 2022, the last time fears of a recession hit the stock market. If the tariffs on China remain, Amazon and its third-party sellers are likely to be among the most affected due to the company's size and its exposure to China. However, there is good news for investors: Much of the risk facing Amazon seems to already be priced in to the stock. It's about as cheap as it's ever been on a price-to-earnings (P/E) basis, trading at a multiple of just 34, which is only a modest premium to the S&P 500. At that price, investors do expect growth from the company, but it's not like the days when the stock was trading at a triple-digit P/E valuation. We'll learn more when Amazon reports first-quarter earnings next Thursday. While the company is certainly vulnerable to tariffs, its long-term competitive advantages should remain intact no matter what happens with trade policy. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $287,877!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $39,678!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $594,046!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of April 28, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart. The Motley Fool has a disclosure policy. As Trump's Tariffs Continue to Cause Chaos in the Market, Mark Cuban Warns About an "Ugly" Future for Amazon was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
30-04-2025
- Business
- Yahoo
Mark Cuban Thinks Continued Tariffs Spell Trouble for Amazon. Time to Buy This Amazon Dip or Bail Out?
A large portion of Amazon sellers are in China, making it vulnerable to the impact of tariffs on its e-commerce business. Management is likely working out how to circumvent the impact by diversifying its supply chain. It has natural protection based on the variety of its businesses. Investors continue to be wary of the new tariff program. Even if the Trump administration's tariffs do accomplish their stated goals of eliminating bias against the U.S. and boosting U.S.-manufactured products, we won't see results immediately. In the meantime, the economy could slide, and there may be a significant negative impact that could be short- or long-term. Billionaire Mark Cuban recently gave his take on how tariffs might affect Amazon (NASDAQ: AMZN). Spoiler alert: He doesn't think it's going to be good. Let's see why, and how investors should play this. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » On social media site Bluesky, Cuban noted that "If these tariffs stick, it's going to be ugly for Amazon, but incredible for all the American sellers." That's a pretty blunt assessment. In the post, Cuban included a graphic from SmartScout, a company that provides data solutions for Amazon sellers; it lists revenue share for sellers in China by Amazon category. In two categories -- arts and crafts, and cellphones and accessories -- Chinese sellers account for more than half of category revenue. In another two categories -- apparel, shoes, and jewelry, and tools and home improvement -- they account for about half. In multiple other categories, they represent a large percentage of total revenue. Those are significant stakes in Amazon's business. Third-party sellers accounted for 61% of units sold on Amazon's platform last year, the highest percentage ever, and a total of $47.5 billion in sales in the fourth quarter -- one-fourth of total company revenue. Their sales increased 9% year over year, outpacing Amazon's online stores, which reported a 7% increase in sales. This means tariffs on Chinese imports could have a huge impact on this business. Cuban posits that while tariffs would be bad for Amazon, they would be good for U.S. sellers. While that's an optimistic take, in actuality, a large portion of what U.S. sellers are selling is likely coming from China as well. So the tariffs, perhaps indirectly, also affect these sellers, and they also impact Amazon's own online sales. In other words, the effects on the company's e-commerce business could be major. Amazon's executives have yet to address how they envision the effect of tariffs on its business, but you can bet the issue will take front and center when they release first-quarter earnings on Thursday. Noting how other companies are addressing the impact, I can see a number of approaches Amazon might take. First, it's likely to tout diversifying its supply chain. Many companies are turning to other Asian countries that have a strong manufacturing infrastructure, especially Vietnam, to get around the tariffs on China. Amazon could reroute supply chains from China to another intermediate country on their way to the U.S. It might turn to more domestic manufacturers, which could help the company and its U.S. sellers bring about the intended effect of the tariffs. It's also likely to absorb some extra costs to keep customers happy and buying. Amazon has more than 200 million Prime customers. These customers count on the e-tailer to deliver their orders quickly and without hassle. Some of them might switch to physical stores if they can cut out some higher costs, but it's unlikely that a large percentage of these customers would change their shopping style unless the costs were prohibitive. Most of the companies those customers might consider switching to would also be dealing with the same issues as Amazon, although without the issue of third-party Chinese sellers. But that may not make a difference if tariffs are being slapped on all Chinese goods, whether they come from a seller in China or the U.S., in the same way. Amazon knows how to play the long game. To push its own agenda, it has undercut other companies in the past. If it has to take a hit to profitability to keep customers happy in the short term, it's likely to do that again. It won't lose its dominance over this issue. To its benefit, Amazon has many revenue streams beyond e-commerce. Amazon Web Services (AWS) is its fastest-growing segment and will be affected less by tariffs -- although it does have exposure through the chips it provides, and now manufactures, for clients to take part in generative artificial intelligence (AI). Its large and growing advertising business and its streaming business are also less exposed to tariffs, shielding both from an acute impact. Whatever happens in the short term, Amazon is well positioned to survive and bounce back. As a huge and profitable company, it has the means to wait out short-term tariff shock. And if tariffs do stick and become the norm, it will integrate them into its platform like all other affected companies. Its other businesses also provide some protection right now. At the current share price, Amazon trades at a forward price-to-earnings (P/E) ratio of 25, which is an excellent entry point for new investors. If you don't own the stock, now is a good time to buy. If you do own Amazon stock, don't make the mistake of selling at a low, when shares are poised to rebound and provide value down the line. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $281,965!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $39,841!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $598,818!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of April 28, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. Mark Cuban Thinks Continued Tariffs Spell Trouble for Amazon. Time to Buy This Amazon Dip or Bail Out? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
29-04-2025
- Business
- Yahoo
White House calls Amazon tariff fee display "hostile and political"
White House press secretary Karoline Leavitt, citing a report that Amazon plans to display tariff charges on imported goods, called the move "a hostile and political act." The e-commerce giant plans to display new tariff costs next to products' prices, political news site Punchbowl reported earlier Tuesday, citing a person familiar with the matter. The move would provide shoppers with clarity into the cost of the new levies on imported goods. "Why didn't Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?" Leavitt said during a press briefing Tuesday. However, Amazon pushed back on the report, saying in a Tuesday statement to CBS News that its Amazon Haul store "considered the idea of listing import charges on certain products." Amazon Haul was introduced late last year by the e-commerce giant to sell low-cost goods to compete with Temu and Shein. "This was never approved and is not going to happen," said Tim Doyle, an Amazon spokesperson. President Trump has imposed tariffs as high as 145% on goods imported from China, while he lowered a range of tariffs on most other nations to a 10% baseline rate during a 90-day pause that began earlier this month. Tariffs are import duties that are paid by U.S. companies such as Walmart and Target, which typically pass on the added fee to consumers in the form of higher costs. The duties are already making foreign-made goods more expensive for U.S.-based consumers. Earlier this month, data showed that Amazon sellers had already hiked prices on nearly 1,000 of the top 100,000 selling products on the site, according to SmartScout, a price analysis software tool. The average price hike was about 30%. At the time, Amazon said the 900-plus products whose prices have risen reflect just 1% of the top 100,000 products across its site. The company also noted that the most common price hike amount was just 6%, and that SmartScout's 30% average price figure was skewed by "a relatively small number of products that had very large increases." "We have not seen the average selling prices of products change up or down appreciably outside of typical fluctuations across the hundreds of millions of items on Amazon, and we continue to meet or beat prices versus other retailers on the vast majority of items," Amazon said in a statement earlier this month to CBS MoneyWatch. Other retailers are introducing "tariff surcharges," such as Dame, a sexual wellness brand, which has implemented a $5 "Trump tariff surcharge" that is automatically added to customers' online shopping carts at checkout. Supreme Court appears poised to side with student with disability in school discrimination case Japan's population shrinking as marriage and birth rates plummet | 60 Minutes Trump tariffs executive order expected
CBS News
29-04-2025
- Business
- CBS News
White House calls Amazon's reported move to display tariff prices "a hostile and political act"
White House press secretary Karoline Leavitt, citing a report that Amazon plans to display tariff charges on imported goods, called the move "a hostile and political act." The e-commerce giant plans to display new tariff costs next to products' prices, political news site Punchbowl reported earlier Tuesday, citing a person familiar with the matter. The move would provide shoppers with clarity into the cost of the new levies on imported goods. "Why didn't Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?" Leavitt said during a press briefing Tuesday. However, Amazon pushed back on the report, saying in a Tuesday statement to CBS News that its Amazon Haul store "considered the idea of listing import charges on certain products." Amazon Haul was introduced late last year by the e-commerce giant to sell low-cost goods to compete with Temu and Shein. "This was never approved and is not going to happen," said Tim Doyle, an Amazon spokesperson. President Trump has imposed tariffs as high as 145% on goods imported from China, while he lowered a range of tariffs on most other nations to a 10% baseline rate during a 90-day pause that began earlier this month. Tariffs are import duties that are paid by U.S. companies such as Walmart and Target, which typically pass on the added fee to consumers in the form of higher costs. The duties are already making foreign-made goods more expensive for U.S.-based consumers. Earlier this month, data showed that Amazon sellers had already hiked prices on nearly 1,000 of the top 100,000 selling products on the site, according to SmartScout, a price analysis software tool. The average price hike was about 30%. At the time, Amazon said the 900-plus products whose prices have risen reflect just 1% of the top 100,000 products across its site. The company also noted that the most common price hike amount was just 6%, and that SmartScout's 30% average price figure was skewed by "a relatively small number of products that had very large increases." "We have not seen the average selling prices of products change up or down appreciably outside of typical fluctuations across the hundreds of millions of items on Amazon, and we continue to meet or beat prices versus other retailers on the vast majority of items," Amazon said in a statement earlier this month to CBS MoneyWatch. Other retailers are introducing "tariff surcharges," such as Dame, a sexual wellness brand, which has implemented a $5 "Trump tariff surcharge" that is automatically added to customers' online shopping carts at checkout.
