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Can Amazon FBA Sellers Survive the Trade Wars?

Tariffs or a tax payable on imports are becoming hot news these days. You cannot turn on the news without hearing the heated argument between the USA and China regarding tax rates on imports of China. Towards the month-end of September, when the most recently imposed tax rates have been discussed, the exchange war between USA president Donald Trump and the Chinese government conveyed e immediate trouble for the sellers who deal in the Chinese products.

This ongoing battle between the two major countries is affecting every lead in the retail industry, especially Amazon FBA sellers. The possible increase in import tariffs from 10% to 25% appears to be out and out terrifying for the sellers. Therefore, as an entrepreneur and business person, one should always remain cautious and ready for the unforeseen issues or mishaps that can happen in the future. You can look over HustleLife’s head to head comparison for more information. With an increase in tariffs, it is evident that the goods that will import from china will be expensive now for the sellers and profit margin will affect. Now the question arises that how Amazon FBA sellers will deal with this new punch.

Some of the short-term and long-term plans that they can adopt are discussed below:

Renegotiate with your supplier

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This peak time, the very first thing that you should do is to talk and renegotiate with your supplier. If you have a good rapport and relationship with your supplier, then he might help you face this difficult time along with you. It is very obvious that suppliers always want to maintain their relationship with their buyers and they never want to end their supplies.

Make a good and realistic plan at the time of renegotiating with your supplier keeping into consideration the needs of both parties. If your project mutually benefits your supplier and you, then you can make a colossal success.

Consider pricing strategies with your competitors

Trade wars affect both consumers and suppliers to a great extent. As sellers, few things occur in actual price wars. In such cases, when one supplier decides to increase the price of the product, the other sellers, to win over their competitors, also raise the cost to remain one step ahead. Similarly, the next time when the competitor raises the rate again, the same process keeps on going, which let the prices increases continuously.

In order to stabilize the sale of the product, the sellers dealing in similar kinds of products should make a pricing strategy that could help all the sellers in the community equally.

Load up the stock in advance

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Stocking Up the products in advance is one of the ideal solutions that the Amazon FBA sellers could adopt. However, stocking up the inventory has a chance of risk, but it is comparatively less expensive than paying higher tariffs on the products later on. The next best solution that Amazon sellers can adopt is by changing to seller fulfilled prime that too winds up less expensive than paying hiked tariffs.

Direct purchase

Such a tough time of trade war between two major governments, the only thing you can do is to save the money as much as you can. In case you are working with the trading organization, then make sure you buy your goods directly from the factory settings and avoid involving intermediates to purchase the product. In this way, you can cut down the cost of agents and mediators and can save the commission that you pay to them.

Look for other suppliers

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From all the above-mentioned short-term plans, the other major thing to consider is to look for suppliers in other countries. It is a long-term plan that every Amazon FBA seller needs to be considered. Try to find alternative suppliers of the products that you can get at less expensive rates. Also, Amazon is a global platform, and nay FBA seller should think to expand the business outside the boundaries.

Conclusion:

So, these were some of the short and long term plans that Amazon FBA seller should consider to face the stressful time of trade wars. In the G20 summit, Donald Trump decided to postpone the increase in tariffs as of now; however, from January onwards, it is expected that new tariffs will be imposed.

About David Montano

David Montano

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