Marketplace Briefing: Tariffs, stockouts and mixed consumer demand cloud Amazon’s biggest Prime Day

When asked about Momentum’s findings, an Amazon spokesperson said in an email that, “Typical of statements made by third-party consultancies that don’t have access to the actual data, these numbers are highly inaccurate.” They disputed Momentum’s data as the estimates rely on the sales of 50 merchants out of hundreds of thousands of Amazon sellers.

“We just started the event yesterday so it’s very early,” Amazon’s Prime chief Jamil Ghani told Bloomberg Television in an interview on Wednesday. “We’re really pleased by the engagement that we’re getting from our customers and our members.”

The tepid start has sparked fresh questions about whether inflation, tariffs and consumer fatigue are finally catching up with Amazon’s biggest sales event of the year — typically seen as a bellwether for retail industry and consumer sentiment. While Momentum forecasts that total sales could still climb 9.1% year-over-year by the time the event ends on July 11, some brands are already reporting double-digit declines. Others are sitting out entirely or discounting only second-tier items due to inventory shortages and supply chain volatility.

“Early Prime Day numbers might look soft compared to last year’s surge, but it’s too early to call the event a miss,” said Kashif Zafar, CEO of e-commerce advertising firm Xnurta, which has a portfolio of 20,000 brand clients. “With four days instead of two, we’re seeing a different rhythm. Consumers are spreading out their purchases.”

Consumers are still expected to open their wallets during Prime Day, and yet the deal-heavy retail period will be clouded by macroeconomic pressures, particularly tariffs. “What we’re anticipating is consumers leveraging and leaning on this type of event to stockpile, given the unpredictability around pricing that could affect them in the future,” said Vivek Pandya, lead analyst at Adobe.

The same tariff-addled uncertainty is plaguing online merchants, too. Some Amazon sellers, who account for around 60% of the e-commerce site’s sales, initially pulled back from Prime Day participation because of tariffs. But as Modern Retail previously reported, many decided to rejoin, despite supply chain and inventory challenges.

What brands are saying 

Brands participating in this year’s extended Prime Day are walking a fine line, offering fewer deals while quietly fretting over tariffs, inventory shortfalls and profit pressures.

For Chuck Gregorich, who runs the outdoor goods brand Net Health Shops, Prime Day sales are down — but not unexpectedly. Sales fell 35% on the first day and 33% on the second compared to last year, he said, largely because the company is unable to discount its top-performing products. “We were expecting this year’s Prime Day not to be very good,” Gregorich said. “Last year, on our best stuff, we gave deals, and we just blew it out of the water. This year, our best stuff, we generally don’t have enough inventory.”

Before former President Trump’s tariffs, about 70% of Net Health Shops’ products were manufactured in China. Gregorich has since diversified production to countries like Vietnam and India, but said he’s still dealing with the aftershocks. “We held off on ordering when everything went crazy on us, and now we’re just getting stuff back into stock,” he said.

Currently, the company is out of stock on about 150 of its roughly 1,200 SKUs, including some of its biggest sellers, like fire pits and water fountains, which only recently came back in stock. As a result, Gregorich said, this year’s Prime Day discounts are limited to “tier two and tier three stuff,” which is driving less urgency and consumer demand. “If we could have had our best stuff in stock, and I could have done it like I did last year, I think our sales would have been close to the same as last year,” he said. Still, he’s “pleasantly surprised” and cautiously optimistic that a four-day Prime Day may smooth out sales by week’s end.

Over at Loftie, CEO Matt Hassett described Prime Day as a “huge spike” in revenue — a surge that in the past has driven more than half of the brand’s monthly sales in July. But taking part in the event has also intensified the company’s inventory concerns. Like many brands that manufacture in China, Loftie has struggled to replenish stock amid soaring tariff costs. As a result, Hassett is bracing for the possibility of selling out.

“We’ll probably move a lot of inventory, which is great, but it does accelerate running out,” he said.

Hassett is especially worried about running out of the company’s signature black alarm clock. He has about three months’ worth of inventory on hand, but has already had to pull roughly 1,000 units from Amazon’s supply to fulfill direct-to-consumer orders in the lead-up to Prime Day. He expects it will take at least a month to restock Amazon’s inventory afterward — and thanks to tariff uncertainty, he’s been hesitant to place new purchase orders.

Meanwhile, Loftie’s LED lamp is now subject to a staggering 60% tariff, prompting the brand to scale back promotions on that product entirely. “It used to be a quarter of our revenue, and so it’s very damaging that we can’t sell it,” Hassett said. “If we were to sell it at the price we used to sell it, we would lose money on every sale.”

Loftie’s Prime Day sales were down 20% year-over-year on Tuesday compared to the first day of Prime Day last year. Hassett partly attributed the drop in sales to price hikes because of tariffs. Earlier this year, he raised the retail price on the brand’s alarm clock to $170, up from $150 in 2024. Still, he’s optimistic Loftie will exceed its Prime Day 2024 revenues as a whole by 10% by July 11.

This year’s Prime Day seems to favor brands that aren’t heavily reliant on manufacturing in China, like New York City-based beauty brand Borghese, which makes most of its products in the U.S. Borghese is expecting Prime Day sales to double this year compared to 2024 — despite significantly scaling back discounts. The brand used to discount as much as 50%, but Borghese has pulled back on promotions over the past year, the company’s COO, Dawn Hilarczyk, told Modern Retail. Borghese is offering a 40% “doorbuster” deal on a select product, but most of Borghese’s items aren’t discounted more than 20% for Prime Day, she said. 

Rather than deep discounts, Hilarczyk said Borghese’s Prime Day sales will be driven by more aggressive Amazon advertising. The brand upped its Amazon advertising spend four-fold compared to last year. That includes ramping up affiliate commissions — which have been doubled — and reaching out to 300 potential affiliates per week. “We are heavily advertising and supporting [Prime Day],” Hilarczyk said. 

The strategy appears to be working: In the first few hours of Prime Day, Borghese saw double-digit sales growth, and the brand also ended the day up more than 70% compared to last year. Even before Prime Day, Borghese’s Amazon business was already up 86% year-over-year. 

Still, the broader mood is one of restraint, not exuberance. Many brands are using this year’s Prime Day as a litmus test — not just for sales, but also for consumer sentiment heading into the holiday season. As Gregorich put it, “Consumers are more conservative. … They’re worried about this war, layoffs and tariffs.”

What I’m reading

• Glossier is joining TikTok Shop after the beauty company started selling at Sephora in 2023, according to Fast Company.
• Fast-fashion giant Shein has confidentially filed for an initial public offering in Hong Kong, per The Financial Times.
• Amazon founder Jeff Bezos sold almost 3 million shares of the company’s stock earlier this month, according to CNBC.

What we’ve covered

• Pop Mart’s Labubu craze supercharges TikTok Shop sales
• Inside the 90 days brands spent navigating Trump’s trade blitz
• Companies from Walmart to TikTok Shop are stretching out sales and sweetening deals to compete with Amazon Prime Day