Amazon Raises Prices on Low-Cost Goods Following Tariffs
A WSJ report claims Amazon is jacking up prices on a bunch of lower-cost items.
Can inflation be blamed? Tariffs? Greedy suppliers?
According to the report, “the makers of several of the goods that became more expensive on Amazon told the WSJ they hadn’t increased the prices they charged retailers.”
Amazon states, “This study is seriously flawed, cherry-picking a mere 2,500 items out of the hundreds of millions we sell, and failing to accurately compare like-for-like offers in stock and available for sale across retailers.”
But the bulk of these millions of items are sold by 3P sellers, who can’t always increase prices in fear of losing the “buybox.” And I have seen several reports of 1P vendors seeing price increases.
More importantly, Walmart is supposedly dropping prices on the very same items. Will that be enough for people to cancel their Prime membership? I don’t think so, but that might be another step towards it.
Are D2C Channels Dead?
I’ve seen several posts this week about major platforms showing disappointing results and negative year-over-year growth. Some hypotheses pointed to changing customer behavior, the rise of alternative channels, and increasing customer acquisition cost (CAC) on D2C channels.
Customers tend to choose the channel that offers the most value, the one that saves them time or money, and also the most convenient way to purchase. AI-powered shopping will be a game-changer when it comes to product discovery and simplifying purchasing decisions.
We can assume that we’ll see more and more customers shop where ChatGPT or Gemini tell them to shop. Will it be a D2C channel or a marketplace? Who can influence AI the most: a small business D2C website or a major marketplace? I don’t have the answers, but we’ll soon see how this plays out.
Back to the initial question: Will AI kill D2C channels? I don’t think so. First, CAC is high for initial purchases but tends to decrease with returning customers. In contrast, brands pay Amazon the sale referral fee on the first or 50th order, and PPC costs keep increasing. Logistics costs decrease with larger purchases, while programs like FBA or WFS charge a fee per unit ordered.
And there’s more than just profitability. For example, an underrated aspect of D2C channels is the connection with users, alongside the data collected. There’s often a lot to learn from this, and marketplace operators don’t always share the most valuable insights on your customers.
I understand the costs of building and maintaining these channels, but many brands can still get a lot of value from them. In my opinion, a successful D2C channel is a telling sign a brand is strong and healthy, while a brand selling only through marketplaces may be a red flag (of course not always, plenty of counter examples here).
Is Amazon pulling out of Google Shopping a revolution in ecommerce, or just a blip on our radar?
I can see three scenarios that might explain this decision:
1 – It is a negotiation tactic. Amazon is trying to secure better terms with Google, using this as leverage.
2 – A short-term traffic test. This could be an experiment to evaluate the impact on traffic and revenues without these ads. That is something we have seen in the past.
3 – Something bigger. Amazon might think now is theright time to heavily invest in AI-powered searches, and get a bigger share of the pie. After all, Amazon is already leading product searches, and outpaced Google years ago.
Let’s remember that most of us don’t have access to the data Amazon has, and we don’t know for sure what is happening behind the scenes. But I can see one, or a combination of these three scenarios.
What are your thoughts? Which scenario sounds most plausible to you, or do you see another alternative?
Shopify’s Universal Cart Makes AI the New Storefront
Is agentic commerce the next big way to shop, or will its adoption be much slower than what people think? I don’t have an opinion yet, but big ecommerce players don’t want to be late to the party.
Shopify’s recent launch of their Catalog and Checkout Kit features tells us the company understands that the customer journey will likely become more decentralized. Instead of focusing only on their storefronts, they’re embedding product discovery and purchasing into the platforms where people spend their time.
While everyone is trying to build their AI agent, Shopify provides the tools for AI agents to discover the right products and bundles, and even process purchases.
For SMBs, this should be a wakeup call. Even outside of marketplaces, your products will increasingly be discovered and sold through channels you don’t directly control. And AI agents are smart; they won’t recommend your products unless they have a good reason to. They won’t care about things designed to influence humans, like your “fun user experience,” how cool you look on social media, or how much money you spend on Meta ads.
Business models like wholesaling or dropshipping will take another hit, while brands offering something unique are better positioned if agentic commerce is widely adopted in the near future.
I think the new Shopify feature, Catalog, gives us a good idea of what may happen to ecommerce in the near future, regardless of whether it will become popular.
Catalog is a massive, centralized database of products from millions of Shopify stores. This allows developers to easily plug products into AI bots and other apps.
This will, in theory, create new sources of traffic to Shopify stores: for example, traffic from chatbots, AI agents, new marketplaces, social media, etc.
But this should also reinforce two trends.
First, the focus will shift from a brand’s “customer experience” to the product itself. Since AI agents prioritize data like price, quality, and reviews, brands will need to compete more on the fundamental value of their products rather than their customer experience or marketing funnel.
Next, the customer journey will be even less likely to start and end on a brand’s website. As products become discoverable and purchasable through AI agents, blogs, and other platforms, brands will lose direct control over the initial touchpoints and will need to adapt to this new environment.
Gen Z Drives 46% of Online Health and Beauty Purchases
Most people assume shoppers spend more in-store. I see the logic: you walk past a display, add a lipstick or two into your basket, and leave with more than you planned. But recent data shows that isn’t always the case.
According to his article, the average in-store health and beauty basket is about $84. Online? $138. That’s 64% higher. Why is that?
Online shelves have no space limits. Every size and bundle can be displayed (especially when platforms allow 3P sellers).
Personalization is more accurate than ever, and AI may upsell better than any endcap.
Bulk purchases are easier. Adding a second (or third) item takes no effort when it ships to your door.
Reviews and ratings can push shoppers toward more premium choices, often at higher price points.
Stores still matter for discovery, especially for emotionally driven purchases like fragrances. But many times, shoppers end up spending more online, including reorders of products they already know.
With marketing media like TikTok and AI powered personalization, it’s clear that impulse buying happens online too. For me, this data is a reminder that a strong omnichannel strategy isn’t just nice to have : it is necessary in 2025.
The end of the de minimis exemption has been brutal for customers and businesses, and I am not talking about Temu or Shein.
What used to be easy, ordering something under $800 without duties, is now a huge mess: surprise bills or fees, disputes, and lack of trust. Some news articles report customers being charged $1400 in tariffs on a $750 part or over $1000 on $600 worth of handbags. I personally recently ordered items from overseas and despite the company assuring me they cover tariffs, I am still a little worried. These scenarios don’t just anger buyers, they damage businesses outside of the US that depend on repeat orders.
For these businesses, this is more than a cost issue. It’s a customer relationship issue. Surprise fees and confusing tariff rules kill trust faster than almost anything else. Wrong HS codes, accidentally inflated declared values, or unpredictable brokerage charges from carriers are turning what should be an easy experience into a nightmare of returns and complaints.
So what should foreign sellers shipping into the US do? Pausing sales might feel safe, but it’s shortsighted. Once you stop shipping, you risk losing those customers forever. DDP (delivered duty paid) is an option, but few businesses can just absorb the costs.
The real key is transparency. Don’t bury the tariff risk in fine print, make it as clear as possible. Even an estimate at checkout or an optional DDP shipping fee is better than leaving your customer with a surprise bill.
Some customers will stop ordering because of tariffs. Accept it. But others will still buy if the value is there and if you’ve been upfront with them. And when/if the de minimis rule comes back, you want to be the brand they remember for honesty, not surprises.
Don’t let tariffs kill your relationship with customers. Regulations come and go, but trust, when lost, rarely returns.
Companies Bet Customer Service AI Pays
Like most of you, I’ve had my fair share of frustrating experiences with AI chatbots. The most annoying one for me is of course dealing with Amazon’s seller support. Anyone who’s been there knows how painful it can be to receive these scripted AI responses that don’t help, with no possibility to talk to a human.
But AI made great progress and companies are rethinking their approach. Klarna started with AI that was too rigid and customers hated it. They now switched to a blended model: AI for speed and scale, humans for empathy and trust.
AI is great for your everyday inquiries. “How much is shipping?” “How do I use my loyalty rewards?”. It can anticipate problems before customers even mention them, even detect when the customer is frustrated and transfer the case to a human for the more complex cases.
I think implementing AI just to say you did is pointless. Sure, talking about AI can make you sound smart during a board meeting. But if it doesn’t improve the customer’s experience and/or improves ROI, it’s a distraction. However, when done right, it can be one of those rare win-wins: customers get faster, better service, and businesses see efficiency and loyalty gains.
Amazon Virtual Multipacks
The “Virtual Multipacks” Amazon is launching are, in my opinion, a prime example of a poorly delivered solution, that arrives too late, to a problem that has existed since FBA becme a thing.
These “Virtual Multipacks” let Amazon use existing FBA inventory of a SKU to offer multipacks without physically bundling units together. Amazon simply combines single units to offer packs of 2, 3, or more.
On paper, this sounds like a clever way to let sellers see what quantities sell best before investing in physical bundles. It also encourages customers to order more, increasing AOV.
But I see two main problems with this feature. First, the program is managed by Amazon, meaning sellers can’t create multipacks themselves. That takes away part of the “experimentation” benefit.
Even more problematic, fulfillment fees are simply multiplied by the number of units. This eliminates one of the main advantages of multipacks: the ability to lower shipping costs and pass on savings to customers.
A more efficient approach would have been to allow real multipacks. That would have rewarded sellers for driving higher AOV and created genuine value for buyers.
Instead, Amazon has left sellers with extra complexity and little incentive, while keeping their own fee structure intact. As a result, sellers will still need to create their own bundles, and no one really wins here.
