Amid Rising Tariffs, Amazon Revamps Vendor Approach in China
What's Behind Amazon's Quiet Vendor Meetings in China?
As the U.S.-China trade tensions were beginning to escalate, Amazon drafted a daring proposal for its vendor business.
On March 20, Amazon hosted a private meeting in Shenzhen with dozens of vendors from South China, followed by a similar session in Shanghai with major brands like DJI, Midea, and Philips.
"It's been over two years since we last met with vendor managers . This time, they came to reconnect, especially with many new faces after a team reshuffle," one vendor who attended the meeting noted. Even vendor managers handling U.S. and global markets traveled long distances to meet Chinese verdors in person.
Amazon also announced plans to launch a new after-sales department in China, providing localized support for Chinese vendors. Key logistics updates included:
MCF (Multi-Channel Fulfillment) Upgrade – All sellers will soon be able to use Amazon FBA to fulfill orders from external platforms.
Global Imports Program Expansion – Vendors can consolidate cross-border orders, accessing multiple international markets without separate accounts for each country.
A New Department in China
Rising tariffs are forcing Amazon to adjust its first-party (1P) operations.
In 2024, Amazon's first-party product sales reached $247 billion, accounting for 38.7% of total revenue. These sales rely heavily on Amazon vendors, who supply products at wholesale prices for Amazon to resell.
However, U.S. tariffs on Chinese imports have significantly increased costs, hitting Amazon harder than its competitors.
A Morgan Stanley report highlights that 25% of 1P inventory costs stem from Chinese imports, with two-thirds of non-food grocery and consumer goods inventory expenses tied to China, making Amazon particularly vulnerable.
To address these challenges, Amazon is intensifying vendor support in China.
During its recent meetings with vendors in Shenzhen and Shanghai, the company announced the formation of a local service team. This team will assist Chinese vendors with persistent issues such as unresponsive Vendor Managers, billing errors, and logistics bottlenecks.
Amazon is also expanding communication tools for vendors. Previously, only select sellers could contact Amazon through email or Vendor Central (VC) Center. Now, these channels are available to all vendors, providing a more direct and accessible way to resolve issues.
Additionally, a chatbot has been introduced to handle routine inquiries, such as order tracking or account updates, reducing the strain on human support teams.
These measures aim to fortify Amazon's 1P supply chain and improve seller relations as the company braces for rising costs. By addressing seller pain points and strengthening communication, Amazon hopes to maintain its competitive edge while navigating the financial pressures of tariffs.
Single Account, Global Reach
Under the strain of rising tariffs, Chinese Amazon sellers are expanding beyond the U.S. market, eyeing global opportunities.
One seller told Brands Factory that he recently sent a team to Tokyo to attend Amazon Japan's VC acquistion event, aiming to meet with Vendor Managers and establish a foothold in the Japanese market. Many Chinese sellers are no longer satisfied with focusing solely on the U.S. and are actively pursuing VC access in other countries.
During the recent internal meeting, Amazon revealed a game-changing initiative: sellers may soon use a single VC account to sell globally. This is part of the Global Imports Program, which allows vendors to deliver goods domestically while Amazon handles international sales and distribution.
Amazon explained that the Global Imports Program is designed to help vendors reach global customers at minimal cost by leveraging its supply chain. A global team based in Seattle, Mexico City, Dubai, and Sydney is already in place to support the program.
"Previously, VC accounts were limited to single marketplaces," one vendor said. "Now, having a U.S. VC account enables one-click access to all regions—entering any country becomes seamless."
The program consolidates cross-border demand into a single purchase order. Vendors ship domestically, and Amazon takes charge of transporting goods to fulfillment centers worldwide. This eliminates the need for multiple VC accounts and helps vendors optimize production by meeting minimum order quantities.
Eligible marketplaces include the U.S., EU, U.K., Canada, UAE, Saudi Arabia, Australia, Mexico, Japan, and more. In China, Amazon's receiving hubs cover key ports like Shanghai, Shenzhen, Ningbo, and Xiamen.
Additionally, Amazon announced the expansion of its Fulfillment by Amazon (FBA) service for multi-channel sellers, enabling them to use FBA for orders placed on non-Amazon platforms.
Tighter Rules
Meanwhile, Amazon is tightening access to its VC program, prioritizing high-value sellers and stricter compliance.
Last year, the company terminated many VC accounts, particularly with annual sales between $1 million and $5 million. The move reflects Amazon's effort to reallocate resources to more competitive vendors. "Every VC category is saturated," said an Amazon spokesperson.
The crackdown hasn't spared even top-tier sellers. One attendee who joined Shenzhen meeting mentioned that a leading Chinese vendor lost their account just because another vendor outperformed them.
Once an account is closed, reactivation appears nearly impossible. "A vendor at the meeting attempted to recover their account but failed. Competition in this space is very intense," the attendee reported.
Securing a new account has also become increasingly difficult. "Internal recommendations are the only way, and these are limited. Vendor need strong sales, deep collaboration with Amazon, and significant MCF usage to stand out."
Amazon is also focusing on expanding into new product categories. During the meeting, the company outlined plans to grow in areas such as perishable food and liquid cleaning products for the European market.
At the same time, compliance for vendors has become more demanding. Amazon now enforces stricter rules on product documentation, packaging, and logistics. "Small errors, like omitting 'China' in an address, can lead to rejected reports. Packaging, shipping times, and delivery efficiency are also under close scrutiny," one vendor shared with Brands Factory.