Amazon Cancels Some Inventory Orders from China

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  One story that broke a couple hours ago is Amazon cancelling orders for multiple products made in China and other Asian countries thinking things like beach chairs,

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  scooters, air conditioners and things like that.

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  Joining us now is the reporter who broke that story, Spencer Soper, Bloomberg News Technology and e-commerce reporter.

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  How does all of this work for Amazon?

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  So they place orders how many months in advance and then what's the ripple effect here?

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  That's a great question and a lot of this stuff,

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  they kind of have like a target of how much they'll need and then they'll place orders maybe monthly or that sort of thing.

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  And so these cancellations affect what are called direct import orders.

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  This is where Amazon tells vendors, hey look, you're making this stuff in China or some other country in Asia.

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  We can actually transport it to the US cheaper than you can because we do so much volume.

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  Why don't you let us just buy it from you in the source country,

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  we'll import it, we'll pay the tariffs and pass those savings on to customers.

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  That makes a lot of sense previously, but now with tariffs in the mix,

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  it gives Amazon a lot of exposure to tariffs and that's why they've abruptly canceled a bunch of these types of orders.

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