Tariff troubles: How Amazon’s price hikes differ from Walmart and Target
There is no doubt that Trump’s tariffs introduced this year created turmoil not only in global trade but also in the financial markets. After unveiling his “Liberation Day” tariffs on April 2, global stocks quickly declined by more than 10% in less than a week, though they rebounded over the announcement of a 90-day pause, opening windows for negotiations. Earlier this summer, retail giant Walmart announced that the costs related to tariffs were rising every week. These tariffs combined with sticky inflation have significantly increased prices for consumers in the US.
Prices on American retail giants Amazon, Walmart and Target have all increased this year as they grapple with higher costs due to tariffs. However, compared to the two others, Amazon has bumped its prices up even more. According to analysis conducted by research firm DataWeave, Amazon prices have risen 12.8% this year on average as of the end of September. Meanwhile, prices on Target and Walmart on the other hand only rose by 5.5% and 5.3% respectively. The research was conducted by reviewing roughly 16,000 items on each of the retailers’ websites. While all retailers increased their prices throughout the year, Amazon saw the sharpest increase between January and February, when prices rose an estimated 3.7% according to DataWeave’s analysis.
Why did Amazon increase prices significantly more than its competition?
Both Walmart and Target are traditional retailers who manage their own inventory and rely on direct sales. Amazon’s business model on the other hand is largely focused on its third-party marketplace. Many of the items sold on Amazon.com are not owned or directly sold by Amazon itself, but rather by third-party sellers. Amazon also has diversified revenue streams through its Amazon Prime subscription service and Amazon Web Services (AWS).
Third-party sellers are far more exposed to tariff-driven cost increases. They lack the scale, inventory flexibility and private label leverage that retailers like Walmart and Target can use to offset costs. As a result, most third-party sellers have no choice but to pass higher costs to the customer.
Amazon stock is currently trading just below $250 per share, up around 13% year to date (Yahoo Finance, 11.11.2025). The price to earnings ratio (P/E-ratio) is sitting right above 35. Vontobel offers a wide range of leveraged products with Amazon as underlying, including both long and short, so investors can gain exposure no matter which way they expect the price to go. On October 30, Amazon released its Q3 2025 earnings report. Net sales increased by 13% to $180.2 billion compared to $158.9 billion in third quarter of 2024. Net income increased to $21.2 billion compared to $15.3 billion in third quarter 2024.
The road ahead
Amazon is experiencing increased competition in the retail sector and its lack of resilience to tariff-driven cost increases could pose challenges in the future. If Amazon’s prices keep increasing more than those of its competitors, consumers might start shopping elsewhere. However, there are still opportunities for Amazon to take advantage of. Amazon Web Services (AWS) is still its most profitable division, and as demand for cloud adaptation is accelerating, it could expand into emerging markets.
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