By Sebastian Herrera
Some companies that sell goods to Amazon.com are feeling a new squeeze.
Amazon has "cost support agreements" in place with some vendors to ensure that it makes consistent margins on the products it buys from them and sells to customers, according to consultants who work with Amazon vendors. Vendors that have tried to charge Amazon more for products it sells since President Trump's tariff agreements are finding that they are responsible for paying the company to make up for the upcharge.
Vendors have been asked more frequently by Amazon in recent weeks to pay, the consultants said. The strategy enables Amazon to keep prices competitively low while keeping its targeted margins, placing much of the financial burden of the tariffs on its suppliers.
Amazon declined to comment. The company can include the cost-support agreements as an add on to contracts it has with vendors, though they are not universally required.
Most of Amazon's sales come from third-party sellers who use its site as a virtual storefront, though the company purchases some products directly from vendors and sells them itself as a retailer.
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(END) Dow Jones Newswires
April 21, 2025 14:18 ET (18:18 GMT)
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