there is one simple rule from the early 1900s that is about to change Amazon forever because Trump is officially in office and he is plans to immediately change the Tariff Act of 1930 this basically means he's about to unleash a foreign tax storm that might not only put Amazon sellers profit margins at stake but also the entire Amazon FBA business model and in just a few months sellers could be paying 60% more for inventory losing access to suppliers and even getting their products ripped off off by Chinese manufacturers and the worst part is they won't be able to do a thing about it so at least for Amazon sellers it doesn't seem like Trump will be making America great again but don't worry yet there's a hidden solution to this mess that Trump just created which I'll reveal later in this video and how Amazon sellers could actually benefit from these new laws but just know it's not looking good for 99% of Amazon sellers right now especially those in the United States that's why in this video I'm going to show you how we got here and why Trump is changing things in the first place an unexpected change Trump is making to a popular social media platform that will flip the Amazon FBA World on its head and what it all means for your wallet as both an Amazon Seller and as an Amazon consumer I'm also going to share with you the three big things that Trump is changing to Amazon FBA and who should be worried about them so whether you're an Amazon Seller worried about Chinese competition a consumer worried about why prices online keep climbing or just someone who's trying to understand what's going on with Trump and Amazon then this video is for you and make sure to smash that like button because even though Trump's new plan might wreck 99% of online sellers there is still a way to benefit from it which I will share later in this video so make sure to stay until the end now if you've been following the news in the past several years you know that China and the US are in a trade War but it wasn't always this way for several decades the US China relationship was s biotic the best analogy I can think of is to describe the relationship is like Tom Brady and Bill bich if you don't already know who they are just think of them as a star sports player along with a really good coach the US and China used to be like a coach and their star player the coach the US calling the shots creating winning plays and strategies well the star player China executed those plays perfectly scoring big for the team for years this partnership brought success to both sides but over time the star players started creating their own plays taking the ball and building their own team suddenly the coach realized that they've been relying too much on their star player and now when their star player decided to stop cooperating the whole game plan falls apart and this star player and the good coach break apart that's exactly what happened between the US and China right now and why Trump is making these three big changes the US produces so few essential Goods that is become heavily dependent on China leaving China holding most of the cards in the relationship right now the US trade deficit is at $1. 1 trillion in other words we've given the rest of the world $1. 1 trillion of business way more than they've given us and guess which country has the highest Trade Surplus in the world it's China with a staggering 823 billion more than any other country in the world now to make things worse the US has a bunch of favorable policies that allow China to sell Goods here in the United States at prices lower than what US businesses can offer to their own people for example did you know that it's actually cheaper to send a one PB package from China to New York than it is from New York to California this pricing disparity is due to an old program called e packet which was enacted to promote crossb Commerce Chinese Merchants also enjoy significant tax advantages when selling to us customers thanks to the D Minimus rule which states that Imports under $800 enter the US duty-free so they don't have to pay any taxes additionally China has a reputation for Flatout copying us Innovations now as an Amazon FBA seller myself an e-commerce store owner for over 5 years as well as helping manage a product that's done figures in profit this past year I can tell you firsthand that if you have a bestseller on Amazon someone in China will likely copy it within 3 months but keep in mind there is a way to avoid this which we'll go over later and since most United States sellers manufacture our products in China competing on price becomes almost impossible now do you think all this is okay should something be done about this tradeing balance well Trump definitely thinks so this leads me to the first big change Trump is making which is tariffs if you don't know tariffs are essentially taxes on imported goods design designed to protect domestic Industries while making foreign products more expensive so if you buy these $20 headphones from China they might now cost $30 or more after the tariffs are applied but if they were made here in the United States they'd already be priced higher at $50 or $60 due to the higher labor in manufacturing costs this means tariffs not only make foreign Goods less competitive but they also push consumers to buy products made in the USA even if they cost more right now tariffs are relatively low on many Goods especially those from China which allows imported products to undercut americanmade ones this creates an uneven playing field where American businesses struggle to compete that's why the first thing Trump is doing is increasing tariffs with Chinese Goods jumping from 25% to as high as 65% in taxes now for Amazon sellers like you and me this means higher costs for imported goods especially for those of us who rely on Chinese manufacturing for products now this is huge tariffs going from 25% to 65% is big if you're importing thousands of dollars of goods from China this jump could literally turn your business from being highly profitable to barely being able to break even and the worst part is this tax only applies to you and not the manufacturer that's right people assumed that tariffs mean that the overseas manufacturers would be forced to pay more to import but it was not on the manufacturer the Tariff has to be paid by you and me the sellers we pay the fee to get our Goods through customs and sell them in the US we're the ones faced with this massive increase so it's not like you can just just increase your prices on Amazon because then you'll just be selling a more expensive product than your competitors and who's going to buy a $30 spatula when the same one is available on Amazon for $5 exactly now however there is a solution to this which I'll reveal at the end of the video but for 99% of Amazon sellers they are done they will be forced to stop selling on Amazon they will have to shut down their business and they may even go bankrupt because these new tariff fees are massive the second major change Trump is bringing to am on FBA sellers is tax incentives under tr's proposed policies companies manufacturing 100% of their products in United States could see their corporate tax rate drop from the low 20% range to just 15% this is a GameChanger for sellers with unique higher margin items this could make us-based manufacturing far more competitive it's especially great for sellers who have already been eyeing ways to move production out of China either to avoid tariffs or just for the Peace of Mind of not relying on International Supply chains but for sellers with low margin generic products this won't be enough to offset the massive increase in import costs they'll either have to Pivot to more specialized products or risk being priced out entirely now this doesn't hurt Amazon sellers nearly as much as the new tariff law does but it's just something to keep in mind and lastly the third thing that Trump is changing is Tik Tok shop now Tik Tok shop has grown like wildfire over the past eight months with almost every single e-commerce seller going to the platform to capitalize on its low competition and high engagement but when Biden was in office he was pushing heavily for Tik Tok to be banned in fact it was supposed to be banned and removed from the App Store this January but Trump isn't as concerned about Tik Tok as Biden so as Trump's election could stabilize Tik tok's future in the US meaning that it's probably here to stay but here's the kicker with Tik Tok shops staying in the game it's going to be even harder for Amazon sellers to make money especially if you're selling unbranded or even branded generic products the drop shippers are selling because now you're not only competing with Amazon sellers but also drop shippers and not to mention Tik Tok has 1.
5 billion users while Amazon only 310 million so those drop shippers selling that same product as you will likely take a lot of your customers that you could have gotten from Amazon so with the Tik Tok shop staying competition is going to be harder than ever for Amazon sellers now I want to let you in on a dirty little secret there's a way to avoid all these problems because these 3T problems of tariff taxes and Tik Tock shop that Trump is bringing into the Amazon world are really only going to kill two primary groups of Amazon sellers wholesalers and private labelers now if you don't know what that is I'll break them down for you right now wholesaling is a technique to sell on Amazon this is where you buy a product just like this scented cat litter for just $27. 99 using a wholesale discount and then sell the same product on Amazon. com for almost $37.
99 you buy the product sell it at a higher price and then keep the profit the good thing about this is is that you can keep selling the same product repeatedly because it's not just a flash sale the problem however is that other Amazon sellers can find that product and sell the same product as you making this method extremely saturated plus with tariffs increasing making a profit from products like these will be nearly impossible and Chinese manufacturers will likely steal your product and sell it directly on Amazon if they do see that you're making any sort of money not to mention when selling unbranded products like these you're now competing with drop shippers on Tik Tok so there are a whole lot of issues with wholesaling now that Trump is in office the second technique of selling on Amazon is private labeling for example this UV flashlight to spot dog urine might not be the most exciting product to sell but they're making over $859 in sales every single month you can find out how much any product on Amazon is selling by going to the product listing page scrolling down to the best seller's rank number copying it into the free jungle Scout sales estimator tool and then selecting the marketplace and category this filter is under pet supplies and when you hit enter you can see that this product sells over 9 $30 units per month by multiplying that by the product cost we can see that this product makes over $859 each month even though this product sells for $19. 99 on Amazon you can go to alibaba. com to buy the product overseas for cheap we can see that this exact product is being sold for $4.
