Is Bezos Overrated And Out Of Control?

Two weeks ago, Jeff Bezos stepped into one of the biggest PR disasters you could imagine. Aaron Cohen, a PR and brand executive. wrote:

Jeff Bezos’ Blue Origin may have made history on Monday for sending an all-woman crew into sub-orbit on its New Shepard rocket ship for all the wrong reasons.

From a pure PR perspective, this was a Jupiter-sized faceplant.

. . . It reeks of poorly performed virtue signaling. Showing extremely privileged women taking a magical vacation into space as passengers while leaving common folk grinding away at their hamster wheel does not a good deed make.

. . . It is difficult to imagine any PR team approving this launch without waving flaming red flags.

But just yesterday, Amazon and Bezos stepped in it yet again:

Punchbowl News reported on Tuesday that, according to a source familiar with the matter, the e-commerce giant will start showing the figure added to the value because of the duties right alongside a product’s total price.

The move is reportedly an effort by Amazon to inform customers cost rises have nothing to do with it and everything to do with the Trump White House.

Stephen Green at PJ Media wrote,

Mere hours after a blistering Briefing Room performance from PressSec Karoline Leavitt — who slammed Amazon as a “China-aligned” online retailer — the company backpedaled faster than a skinny-dipper who mistakenly waded into a piranha pool. Leavitt was responding to questions involving a Punchbowl News report that Amazon would break out the "Trump tariff" on the price of imported goods.

Elsewhere, Green linked to this post on X:

This will backfire.

Amazon buys Chinese trash for $0.70 cents. Pays $0.50 tariff. Sells to you for $18 plus $0.50. Customer realizes they’re buying Chinese trash. https://t.co/cowWJ0T0x5

— Rob Schmitt (@SchmittNYC) April 29, 2025

Green continued,

Nick Sortor reported that "minutes after President Trump called Jeff Bezos this morning, Amazon CAVED and backtracked on their plans." Bezos isn't CEO any longer, but he can still jerk some chains.

Whatever the truth is, what a shame Amazon isn't sticking to its guns. As I wrote earlier today, breaking out taxes and letting consumers know up-front where their merchandise is coming from would be a big win. Even that, however, wouldn't be enough to fix what's wrong with the Amazon-China Connection.

The chart below is from last year, before the tariff controversy:

But there are apparently other problems with Anazon's business model:

UPS will cut 20,000 jobs this year, about 4% of its global workforce, the company said Tuesday. But UPS added the decision is unrelated to tariffs and is instead due to increased use of technology and a previously announced plan to trim its Amazon business.

UPS in January announced a “glide down” plan to cut its business with Amazon, its largest customer, in half by the middle of 2026. UPS CEO Carol Tome said Tuesday that most of the Amazon business that it is giving up is “not profitable for us, nor a healthy fit for our network.”

The UPS package volume from Amazon was already down 16% in the just-completed quarter, which was a bigger drop than UPS had forecast for the period. UPS said it will close 73 US buildings by the end of June as the next part of that “glide down” plan.

So UPS is losing money on its business with Amazon. On the other hand, Amazon has its own delivery service, Prime -- so why was Amazon taking business away from itself and giving it to UPS? I've got to assume UPS was cheaper than Prime for Amazon to use it instead. But now UPS is forcing Amazon to use its own higher-cost shipping, because Amazon was ripping it off. These were factors in play before Trump's tariffs. But the tariffs are also just an outcome, not a cause:

Amazon (NASDAQ:AMZN) has quietly canceled a number of orders from suppliers in China and Southeast Asia, according to Bloomberg. The move appears aimed at avoiding the rising costs tied to U.S. tariffs but it's left some vendors with goods they can't sell.

. . . A consultant familiar with the matter told Bloomberg that Amazon canceled several direct import orders without warning. Because Amazon usually acts as the importer of record, it normally pays any tariffs once the goods arrive in the U.S. But when an order is canceled after shipping, that responsibility shifts to the vendor leaving them on the hook.

In its 2023 annual report, Amazon flagged risks tied to its China-heavy supply chain, warning that global events, security issues, or policy changes could affect results. Around 40% of items sold through Amazon come from these types of vendor relationships showing just how wide the impact could be.

In other words, Amazon was fully aware as early as 2023 of the risks in its supply chain, but it seems to have persisted in that risky business model for as long as it could.