Amazon Counters Tariffs With Luxury Beauty Surge

Amazon is leveraging its Premium Beauty category featuring luxury cosmetics to offset the impact of President Donald Trump's tariffs on its upcoming Prime Day sales event. Some sellers sourcing from China and other heavily tariffed countries have withdrawn from the event to protect margins, but Amazon is banking on high-margin beauty products from brands like Estee Lauder's Clinique, Olaplex, and L'Oreal's Urban Decay to cushion revenue and consumer sentiment. Premium Beauty sales have surged nearly 20%, as consumers increasingly view beauty products as essential even during economic challenges, and Amazon benefits from higher margins due to smaller packaging and less steep discounts compared to electronics and apparel. Discounts on beauty items during Prime Day are expected to be milder, ranging from 10 to 17 percent, while electronics may see 14 to 22 percent off, preserving premium brand value and margins. This strategic focus on luxury beauty also helps Amazon compete with specialty retailers like Sephora and Ulta, enhancing its appeal to affluent shoppers while mitigating tariff-related challenges. Overall, Amazon's investment in luxury cosmetics is a key part of its plan to sustain strong sales growth and profitability amid trade tensions.