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Amazon to display tariff costs for consumers

punchbowl.news

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Re: Amazon to display tariff costs for consumers

#131

Post by conductr »

dgfitz wrote: post #110
stetrain wrote: post #90

Earlier quoted context omitted.

Company A imports steel and pays a tariff, uses the steels to make screws in the US. Company B imports lumber and pays a tariff, manufacturers it into furniture rails in the US. Company C buys furniture rails from Company B and screws from Company A and assembles them into an end table. Company D buys the end tables wholesale from Company C and distributes them on Amazon. How does Amazon display the tariffs paid by C…

A and B passed along the tariff costs to C, which passed those costs to D. D now costs more, assuming they pass the delta cost to the consumer. The only delta a customer cares about is the past/current cost of D, which is what amazon would presumably display. Isn't this the horn everyone keeps trumpeting? It doesn't seem complicated.

There’s a million reasons besides tariffs a cost may increase. Sellers with no tariffs will just increase prices to pad profits if they’re given an opportunity to let Amazon pin it on tariffs. There is a lot of evidence supporting the theory that this type of manufactured inflation is what drove the recent pandemic era inflation. Corporate profits alone are the best indicator of this occurring. They raised prices by a lot more than their cost increased because they could hand wave broadly at inflation.

Re: Amazon to display tariff costs for consumers

#132

Post by fortran77 »

jstummbillig wrote: post #57

Can I assume that nobody is actually commenting on the article (considering it's paywalled, on a site that I personally never heard about before) and every comment in this thread is spawned off of 7 words of headline?

Very few people read the articles on Hacker News, no matter what the source.

Re: Amazon to display tariff costs for consumers

#133

Post by zmgsabst »

throwaway7894 wrote: post #119
profmonocle wrote: post #76

I'm fine with this as long as they include the tariff in the listed price. I'm worried businesses are going to use tariffs as an excuse to have a fake list price, then hit you with massive hidden fees at the point of sale. Some sectors have been doing this for years - "service fees" at restaurants, "regulatory response fees" in the telecom industry, all sorts of nonsense in event ticketing. Physical goods have mostly…

In stores yes, but on the Internet, including it in the price makes it easier to bump up prices. Showing the price without tariff allows you to easily compare before / after, and then when you see tariff added to your bottom line order (e.g. on Amazon) it should drive home the point that tariffs are a tax paid for by the consumers (which unfortunately lots of people still dont believe).

I actually think that would backfire:

I see two items for $5, but when I add the imported one, suddenly it costs more — and Amazon didn’t tell me that ahead of time or give me any way to choose the one without tariffs on the grid/list view.

This makes tariffs more effective because they can’t bump the domestic price to match — while giving customers a negative chock each time they choose an importer for a product.

Re: Amazon to display tariff costs for consumers

#134

Post by josefresco »

rubyfan wrote: post #83

Is this a reputable news site? There are some warning signs that make me believe it’s sponsored content. It feels less like news and more like propaganda?

Pretty easy to look up, they appear to be "reputable" (whatever that means now) https://en.wikipedia.org/wiki/Punchbowl_News Co-founder: https://en.wikipedia.org/wiki/Jake_Sherman_(journalist)

Re: Amazon to display tariff costs for consumers

#135

Post by iterance »

Aurornis wrote: post #124
gherkinnn wrote: post #109

Earlier quoted context omitted.

I expect businesses to bump prices. Bump em because of tariffs, bump em some more to pad the margins because what is an extra 5%, bump em even when they're not affected by tariffs because everyone else is doing so, and delay un-bumping them once tariffs fall again.

Prices are always set by supply and demand. The price will rise until it gets high enough that the product of sales * price falls. It has always been that way. Businesses haven’t been selling goods and services out of the goodness of their hearts at an arbitrary price. It’s always supply and demand. Tariffs are expected to reduced demand because they increase prices. This is why the stock market is down and nearly ev…

Supply and demand is one driver of economic pricing, but not the only driver. Efficient pricing is a complex topic and not as black-and-white as it seems. As demand falls, the price may be expected to fall, but there is an inelastic limit set by material, labor, transport, and taxation cost. A company may elect to decrease their profit margin per sale to offset increased costs, but there is only so much margin to eat.

In the current circumstances, though, companies do not have a choice to lower prices. The basic cost of taking an item into inventory from these suppliers has risen significantly, in most cases well above 2024 margins.

The net effect is that, despite the market's best effort to correct prices to within an affordable range, costs may rise considerably and availability may still fall regardless. Under severe shock to the system, the usual maxims that account for nominal shifts in day to day trading no longer apply.

Re: Amazon to display tariff costs for consumers

#136

Post by Aurornis »

ceejayoz wrote: post #117
gherkinnn wrote: post #109

Earlier quoted context omitted.

I expect businesses to bump prices. Bump em because of tariffs, bump em some more to pad the margins because what is an extra 5%, bump em even when they're not affected by tariffs because everyone else is doing so, and delay un-bumping them once tariffs fall again.

Yup. My grocery store raised bananas from 49¢/pound to 55¢/pound this week, with a sign about 10% tariffs… but the tariff would be on their wholesale costs, not the shelf costs. They're probably paying 1-2¢/pound extra. People have a hard enough time understanding who pays tariffs. Stores'll be able to muddy the waters this way pretty much at will.

Grocery stores have famously low margins. Everyone thinks they’re cash cows, but they have some of the thinnest profit margins of common consumer businesses.

Stores often sell common staples like bananas, generic milk, and other basics at close to cost. They’re the things that get people in the door. They make their profit on things like cereal, deli meats, packaged goods, and other non-staple items that people also buy once they’re inside.

It’s similar to how many gas stations compete on cost of gas to get people there, but hope that you’ll stop inside and get a $6 drink or some $5 packaged snacks.

Then you have to consider all of the other things that go into a store are also tariffed. The parts for the trucks that transport the bananas have tariffs. Many of their cleaning supplies. Parts for the checkout registers. The light bulbs they have to replace. Many of those tariffs could be well over 100%. They have to make up that price in the cost of bananas and everything else.

Re: Amazon to display tariff costs for consumers

#137

Post by weakfish »

Aurornis wrote: post #124
gherkinnn wrote: post #109

Earlier quoted context omitted.

I expect businesses to bump prices. Bump em because of tariffs, bump em some more to pad the margins because what is an extra 5%, bump em even when they're not affected by tariffs because everyone else is doing so, and delay un-bumping them once tariffs fall again.

Prices are always set by supply and demand. The price will rise until it gets high enough that the product of sales * price falls. It has always been that way. Businesses haven’t been selling goods and services out of the goodness of their hearts at an arbitrary price. It’s always supply and demand. Tariffs are expected to reduced demand because they increase prices. This is why the stock market is down and nearly ev…

I am so tired of people echoing “supply and demand” like it’s Econ 101. The modern market is infinitely more complex with infinitely more ways to create inefficiencies that don’t respond to simple supply and demand.

Re: Amazon to display tariff costs for consumers

#138

Post by ceejayoz »

Aurornis wrote: post #124
gherkinnn wrote: post #109

Earlier quoted context omitted.

I expect businesses to bump prices. Bump em because of tariffs, bump em some more to pad the margins because what is an extra 5%, bump em even when they're not affected by tariffs because everyone else is doing so, and delay un-bumping them once tariffs fall again.

Prices are always set by supply and demand. The price will rise until it gets high enough that the product of sales * price falls. It has always been that way. Businesses haven’t been selling goods and services out of the goodness of their hearts at an arbitrary price. It’s always supply and demand. Tariffs are expected to reduced demand because they increase prices. This is why the stock market is down and nearly ev…

The demand side in particular can be tweaked by human factors, though. We have advertising because the level of demand isn't some fundamental cosmic constant of the universe like the speed of light.

"The price went up 10%, that must be the 10% tariffs" is something consumers will inherently understand… but it's not the case. The 10% is not on the on-the-shelf price; it's on the wholesale price the importer's charging. The $20 shirt at Old Navy is probably $4 (with $0.40 in tariffs added) for tariff purposes… but they'll add $2 to it anyways, because consumers will go "oh ok". There's a massive information asymmetry here.

The unpredictable nature of these specific tariffs is fairly unique, too. The rates change randomly, with zero warning, and how they're set isn't sensical. With ships across the ocean taking weeks, that's gonna chill the supply side as well.

Re: Amazon to display tariff costs for consumers

#139

Post by CivBase »

Aissen wrote: post #129
profmonocle wrote: post #76

I'm fine with this as long as they include the tariff in the listed price. I'm worried businesses are going to use tariffs as an excuse to have a fake list price, then hit you with massive hidden fees at the point of sale. Some sectors have been doing this for years - "service fees" at restaurants, "regulatory response fees" in the telecom industry, all sorts of nonsense in event ticketing. Physical goods have mostly…

> aside from sales tax not being included, but that's been universally true in the US forever so everyone is used to it. Why are you putting this under the rug so easily? It's never too late to changes those ludicrous behaviors, even if everyone is accustomed to it.

Probably because it's just not as impactful as hidden tariff costs would be. Sales tax is relatively small and consistent. Depending on the product a tariff could be negligable or it could double the sticker price and the customer would have no way of knowing until checkout.

Re: Amazon to display tariff costs for consumers

#140

Post by lvl155 »

Aurornis wrote: post #124
gherkinnn wrote: post #109

Earlier quoted context omitted.

I expect businesses to bump prices. Bump em because of tariffs, bump em some more to pad the margins because what is an extra 5%, bump em even when they're not affected by tariffs because everyone else is doing so, and delay un-bumping them once tariffs fall again.

Prices are always set by supply and demand. The price will rise until it gets high enough that the product of sales * price falls. It has always been that way. Businesses haven’t been selling goods and services out of the goodness of their hearts at an arbitrary price. It’s always supply and demand. Tariffs are expected to reduced demand because they increase prices. This is why the stock market is down and nearly ev…

You ever heard of pricing power? Monopoly and monopsony?
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