Amazon’s Q1 growth is strong, but tariffs and promo pressure are rising – so what do brands need to plan for?
Amazon Q1 2025: The Results are in
Amazon has released its Q1 2025 results, and they’re a must-read – and a must-act-upon – for brands who rely on the platform for growth.
With expert insights from our CEO, Andrew Banks, here’s our breakdown of what the numbers really mean for Sellers and Vendors, and (crucially) how you can prepare for what’s next.
Retail is resilient
Despite the economic headwinds to date this year, Amazon delivered solid YoY growth through Q1:
- North America: $92.9B (up 8%)
- International: $33.5B (up 5%, or 8% FX-neutral)
What does this mean for brands?
Obviously it’s good news that retail is resilient – but rising tariffs and shifting consumer sentiment could bring more volatility as we move through the year.
We’ve all got our eyes firmly fixed on what’s happening – but now’s certainly the time for your brand to double down on what’s working, tighten up on what’s not and have contingency plans in place to cover where you might be affected.
Efficiency is up – is more pressure on the way?
Amazon’s Q1 also saw operating income climb:
- North America: $5.8B
- International: $1.0B
For us this kind of margin focus, where Amazon has clearly shown that they’re tightening ops, controlling costs and boosting margins, signals some likely trends to come – namely tighter Vendor negotiations, stricter AVN terms and a stronger push for retail media to deliver ROI.
What does this mean for brands?
Brands should be on the lookout for pressure to deliver more value on Amazon’s terms – and be prepared to face a tougher stance on price hikes or missed metrics.
These trends may not come to pass but, when it comes to pressure, it’s best to be prepared!
Promos are working – so get strategic!
Amazon says customers saved $500M+ in Q1 thanks to Spring events like:
- The Big Spring Sale
- Spring Deal Days
- Ramadan Offers
Promotions are clearly shifting volume – so, whether your brand discounts or not, your Q2 strategy needs to factor in the halo effect of these high-traffic events.
And of course, the new, extended Prime Day is coming up fast, with rising ad costs and demand spikes expected to kick in from mid-June on.
What does this mean for brands?
Now’s the time to prioritise planning your pricing, inventory, campaigns and media strategy so that it aligns not only with Prime Day, but all of Amazon’s promo windows.
This will put your brand in the best position to make the most of surging demand – even if you’re not running deals yourself.
Tariff Pressure is Building
We went into detail about navigating increasing tariff pressures here – but to reiterate, with around 18% of Amazon’s own products imported from China, and 60% of 3P sellers affected too, brands should prepare for real disruption.
What does this mean for brands?
The end of the “de minimis” exemption and incoming US tariff hikes could:
- Increase product and landed costs
- Force changes in sourcing or pricing; and/or
- Lead to cancelled POs or stricter inventory controls
If you’ve not already started making your operations as resilient as possible, don’t lose any more time – you can head here for more detailed insights from our team.
And if you need strong support on your side?
Our experts are helping our clients actively rethink pricing strategy and cost structure ahead of Q3 – join them and put your brand ahead of the competition too.