Bezos is cashing out. Should sellers be stocking up? [MDSR #46]

Hot Off The Presses 📰

Pull the plug on those “pre-tariff sale” promotions. Put a pin in your holiday contingency planning. And If you were thinking of skipping Prime Day this year, you might want to get your ducks in a row after all. 

Because the US and China have agreed to reduce tariff rates for the next 90 days. 

Cost relief on imports mean that sellers have a bit more time to plan for the inevitable tariff-induced inventory shortages, but stay vigilant. This is more calm before the storm of a looming supply chain disaster.  

Lest we forget that even the almighty Amazon had been reportedly pushing suppliers for discounts. UPS is laying off 20,000 employees to counter the impact of a reduction in Amazon delivery volume. And searches for American-made products are surging 220% YoY. 

Not to mention, Bezos is hatching plans to sell another 25 million shares of the AMZ pie. 

Is this a coincidence given the timing of Amazon’s Q1 2025 earnings report or the never-ending haze of tariff uncertainty? We think not. 

📊 Here’s the TL;DR of Amazon’s Q1 2025 earnings 

• Revenue: $155.7 billion, a 9% increase year-over-year, surpassing analyst expectations.

• Net Income: $17.13 billion ($1.59 per share), up from $10.43 billion the previous year.

• Amazon Web Services (AWS): Revenue grew 17% to $29.3 billion, contributing significantly to overall profitability.

• Third-Party Seller Services: Revenue increased by 16%, with third-party sellers accounting for 61% of total units sold, indicating a growing reliance on independent sellers.

• Q2 Outlook: Despite solid Q1 results, Amazon issued cautious second-quarter operating income guidance of $13 billion to $17.5 billion — falling short of the $17.7 billion market expectation. 

Coupled with the temporary tariff reduction, this starts to paint a picture of the winners and losers. At least for now.

🏆 The winners

1. Amazon’s Core Business Segments: Steady YoY growth across AWS and advertising services underscore their role in Amazon’s profitability and influence in digital marketing.

2. US-based Sellers: The temporary reduction of U.S. tariffs on Chinese goods from 145% to 30% offers cost relief to sellers who source products from China. This change can lead to improved profit margins and competitive pricing.

3. Consumers: Amazon's focus on keeping prices low and expanding its selection led to increased customer engagement, benefiting consumers seeking bargains. 

4. Amazon’s Haul Platform: Amazon's Haul platform, which facilitates direct-from-China sales, benefits from the reduced tariffs, potentially enhancing its competitiveness against other platforms like Shein and Temu. ​

⚠️ The losers

1. Sellers in China: Despite the tariff reductions, Chinese sellers on Amazon's marketplace still face a 30% tariff, a significant increase from previous rates. This situation has led some to consider price hikes or exiting the U.S. market altogether.

2. Amazon’s Free Cash Flow: While operating income increased, Amazon's trailing twelve-month free cash flow decreased to $25.9 billion — down from $50.1 billion the previous year — due to substantial investments in infrastructure and technology. ​

3. Investors: Despite strong Q1 earnings, Amazon's stock experienced a decline due to cautious Q2 guidance and concerns over ongoing trade tensions. The company's forecasted net sales for Q2 range between $159 billion and $164 billion, reflecting potential challenges ahead. ​

All of that said, remember that the temporary reductions will expire around August 12, 2025 if no new agreement is made. 

And that sellers could feel the effects as early as July depending on inventory planning cycles and shipping lead times. 

Now over to you 😅

Million Dollar Advice 💸 

Does this sound familiar?

I’m an experienced seller, so I don’t need to waste time on a strategic business plan. They’re impossible to stick to — no one ever hits their goals according to a plan or timeline, anyway. 

Maybe flying by the seat of your pants has worked out so far — but that doesn’t mean you should rely on that as a long-term business strategy. Especially in this day and age.

Top 8 services and tools for shipping on a budget 📪

Finding the cheapest way to ship packages isn't a one-size-fits-all solution. Fortunately, our new article is here to help sellers understand a range of options, from traditional carriers like USPS, UPS Ground, and FedEx Ground, to innovative shipping solutions like Pirate Ship, Sendle, and Shippo. 

Here’s a quick rundown comparing their benefits and pricing structures, but don’t forget to check out the full article for more intel.

Cost & Service Comparison of 8 Shipping Methods

Think this comparison is helpful? Feel free to pass it along 🙂 

eCom Stock Watch 📊

Click on the table below or view the full size data here. 

New resource for navigating tariff, importing, and rising costs 🗺️

🌊 Nearshore 🌊 is a sourcing platform dedicated to connecting you with suppliers in Latin America, the USA, and Europe. By “nearshoring” your production, you can enjoy benefits like shorter lead times, fewer (or zero) tariffs, and an overall more sustainable process.

Ready to get started?

1. Free Account & 1 Sourcing Request

Create a free Nearshore account and submit one sourcing request (RFQ) at no charge! Your request will be shared with Nearshore’s factory network and you’ll get up to one factory introduction at no cost. [Create Free Account]

2. 20% Off Supplier Search & Multiple RFQs

Need more options for your fabrics, materials, or product designs? Get 20% off any paid annual plan using code Start20. [Join Here] 

3. $5K Grant Opportunity

Nearshore is awarding three $5,000 Manufacturing Grants to U.S.-based small businesses (under $5M in annual revenue). You can use the funds for production, sampling, or materials—whatever gets you closer to launch. [Apply Here] 

To learn more, visit nearshored.ai! 

FREE upcoming MDS events in May and June 📆

Are you an ecompreneur hungry to network with your local community?

Come join us in a relaxed atmosphere where you can enjoy drinks and food while networking with eCommerce sellers doing $1M+ in annual sales across channels including Amazon, Shopify, TikTok, and other DTC platforms.

💸 BTW, all of these events are 100% free to join 💸

• Wednesday, May 28th | San Diego ecomlunch

• Thursday, May 29th | Washington DC Seller Social 

• Friday, June 27th | Charlotte Seller Social 

Sign up if you’re planning to join — we hope you do!

Did you see that post 📲

Search volumes for “Made in the USA” are on the rise. But money talks when shoppers are faced with a real decision — not a survey or comment section — and it tells a different story.

Until Next Time ✌️

As always, thanks for sticking with us until the end. 

If you’d care to share your thoughts on this newsletter, we’re all ears. Just hit reply to sound off. 

See you next time with more of the latest and greatest content you need to succeed this year 🔥

Sincerely, 

Looking for a mastermind community?

Million Dollar Sellers (MDS) is an exclusive community of 700+ like-minded Amazon and DTC sellers from all over the world. Collectively, our members generate more than 8 billion in annual sales and dominate some of the biggest categories on Amazon. MDS offers world-class events, chapters, industry discounts, resource libraries full of SOPs, templates, and video recordings of private trainings, workshops, events and so much more.

If you are looking for a business professional community made for ecom entrepreneurs, then consider applying today. 

*To qualify, you must be a full-time seller or brand owner and do at least 1 million in verified annual revenue. Will Amazon’s Returnless Resolutions solve the returns debacle? [MDSR #30]