Amazon.com, Inc. (NASDAQ:AMZN) is turning to luxury beauty products as a way to offset the impact of tariffs during its upcoming Prime Day sale.
What To Know: Under pressure from the new tariffs introduced by President Donald Trump, some sellers who source their goods from China and other countries facing high tariffs are choosing not to participate in Prime Day in order to protect their profit margins.
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As a result, Amazon is placing greater emphasis on its Premium Beauty category, which features high-margin cosmetics and luxury brands, to help make up for potential revenue shortfalls and maintain positive consumer sentiment.
Melis del Rey, general manager for health and beauty for Amazon U.S. stores, told Reuters that the company has been “very proactive” in determining the impact of tariffs on the premium brands.
“At a high level, most of the premium brands’ sourcing strategies are local, and therefore, the (tariff) impact is less imminent,” del Rey said.
Why It Matters: Prime Day, one of Amazon’s largest annual sales events, will be stretched to four days from July 8 to July 11, 2025.
The company is betting that the strong growth in its Premium Beauty segment — where brands from Estee Lauder Companies, Inc. (NYSE:EL) such as Clinique; Olaplex Holdings, Inc. (NASDAQ:OLPX) and L'Oreal's (OTC:LRLCF) Urban Decay are now prominent — will help buffer the financial effects of the tariffs.
Luxury beauty products tend to have higher profit margins, are less likely to be heavily discounted compared to electronics or apparel and are often still considered essential purchases by consumers, even during tough economic times.
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