Why Skyrocketing Import Costs Are Hammering Amazon Sellers (And You)
This is just the beginning of the pricing surge.
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Tyler Rodriguez, an Amazon third-party seller based in Florida, has seen his import costs from China triple since the start of the pandemic. He’s had to bump prices for the toys he sells on the site by 10 to 15%. And he’s among the lucky ones.
Rodriguez is part of a growing segment of the U.S. economy getting crushed by rising import costs from China. Before the pandemic, Amazon sellers and their fellow U.S. retailers could import a 40-foot container from China for approximately $2,000. Now, that same container runs as much as $15,000. And Rodriguez, who still hasn’t seen the brunt of the pricing surge, is bracing for what’s to come.
“It started getting crazy,” Rodriguez told me. “I don’t know what the upper limit could be.”
The shipping cost surge is most acutely hitting Amazon’s third-party sellers — who operate on thin margins and often compete with Amazon itself — but it’s also shocking the rest of the import-reliant U.S. economy. To account for the greater costs, companies like Rodriguez’s are raising prices, and others are going out of business. And with industry experts predicting this will go on for months, it’s time to brace for a prolonged period of upheaval for businesses and price increases for the rest of us.
“Anyone selling shoes, or cameras, or surfboards, or anything super big, they’re definitely getting absolutely smashed right now,” Rodriguez said.
The chain of events that led to today’s shipping price spike began with China’s shutdown at the start of the pandemic. When the country closed its factories, ocean carriers took ships offline because they had nothing to ship. Then, just as China started ramping back up, demand for products soared as homebound Americans went on lockdown buying sprees. The result was a classic marketplace squeeze, where shipping capacity couldn’t match demand. So prices skyrocketed.
“It hurts if you’re a Walmart or Kohls. It can be almost devastating if you’re a smaller…