Additional Coverage:
- Amazon cancels massive inventory order from China after 125% tariff raise but vendor forced to pay $500k fine (themirror.com)
Amazon Cancels Orders, Leaving Some Vendors in the Lurch
Reports indicate that Amazon has cancelled a large order of goods from suppliers in China and other Asian countries, impacting some vendors significantly. A document reviewed by Bloomberg suggests the cancelled inventory included items like beach chairs, scooters, and air conditioners.
Orders from Vietnam and Thailand were also reportedly affected. While declining to comment on the cancellations specifically, Amazon acknowledged that suppliers in China provide a substantial portion of its components and finished goods.
The timing of the cancellations coincides with recent tariff announcements by former President Trump. He initially stated intentions to increase tariffs on Chinese goods to 125% but then declared a 90-day pause and a temporary tariff reduction to 10%.
One vendor, who spoke anonymously for fear of reprisal, told Bloomberg that an email from Amazon informed them of a shipment cancellation “in error.” The vendor’s half-million-dollar order of beach chairs had already been manufactured, leaving them scrambling to find alternate buyers.
They emphasized that this was unprecedented in their decade-long relationship with Amazon. The email made no mention of tariffs.
Because Amazon typically acts as the “importer” in these transactions, it usually bears the responsibility for tariffs on goods shipped from Chinese factories to US warehouses. This bulk shipping process also allows Amazon to secure lower shipping rates than individual vendors could obtain.
Scott Miller, a former Amazon vendor manager and current e-commerce consultant, told Bloomberg that several of his clients experienced similar unexpected cancellations. He believes this situation may lead vendors to renegotiate their terms with Amazon.
“Amazon really holds all of the cards,” Miller stated. He suggested affected vendors might try to sell their surplus inventory in other countries, albeit at lower profit margins, or explore partnerships with different retailers.