Amazon Leans on Premium Beauty as Tariffs Threaten Prime Day Participation

THE WHAT?  Amazon is turning to its growing Premium Beauty category to offset potential losses from declining Prime Day participation due to renewed tariff concerns under Donald Trump’s trade proposals.

THE DETAILS Some Amazon sellers are pulling out of Prime Day to protect margins as tariffs on imports from China and other regions come back into focus. In contrast, Amazon is leaning on high-margin categories like cosmetics to support revenue during the annual sales event.

Premium Beauty sales on Amazon grew 20% to US$15 billion between April 2024 and April 2025, according to NielsenIQ—outpacing the broader beauty category’s 14% growth and total e-commerce sales growth of 5%. Top brands like Estée Lauder, Olaplex, Clinique, and Urban Decay are now participating in the invite-only program, a shift from earlier reluctance due to concerns about image and counterfeiting.

These products typically see lighter Prime Day discounts—between 10% and 17%, compared with deeper cuts in electronics and apparel—making them more profitable for Amazon. Their small size and high value also reduce shipping costs, further supporting margins.

Amazon’s Premium Beauty now includes over 10,000 items. Sellers pay a 15% fee, but terms for major brands remain undisclosed. The program has allowed Amazon to compete more directly with Ulta and Sephora, while also attracting older, higher-income consumers, in contrast to TikTok Shop’s younger demographic.

  THE WHY? With sellers pulling back due to tariff concerns, Amazon is using Premium Beauty—where pricing is firmer and margins are higher—as a hedge to protect Prime Day revenue and maintain consumer interest.

Source: Reuters

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