This episode explores Amazon's Q1 2025 earnings report and its implications for third-party sellers, focusing on Amazon's growth, FBA fees, advertising fees, and the potential impact of tariffs. The core retail business of Amazon's online store revenue grew by 7% for the quarter, which is typical compared to the growth rate since COVID. While Amazon warns of potentially shaky performance in the future due to tariffs, FBA fee growth was nearly identical to overall online store revenue growth, suggesting that Amazon has kept its word about not increasing fees. In contrast, advertising revenue grew by 19% year over year, outpacing retail sales growth and indicating that sellers are paying more for advertising. This growth surpasses that of other major tech companies like Meta, Microsoft, and Alphabet. If sales decline due to tariffs, Amazon may increase advertising fees even further to maintain profit growth.
