Amazon sales grew 10% in its fiscal Q1, which ended March 31, with CEO Andy Jassy saying the online marketplace has “not seen the average selling price of retail items appreciably go up yet” as a result of U.S.-imposed tariffs.

No one knows “exactly where tariffs will settle or when,” CEO Andy Jassy told investors on Amazon’s Q1 earnings call.

So far, he said, Amazon has seen consumers buy more from certain categories “that may indicate stocking up in advance of any potential tariff impact.”

“We also have not seen the average selling price of retail items appreciably go up yet,” Jassy said. “Some of this reflects some forward buying we did in our first-party selling and some of that reflects some advanced inbounding our third-party sellers have done, but a fair amount of this is that most sellers just haven’t changed pricing yet.”

Meanwhile, in Q1, sales of items in Amazon’s “everyday essentials” category grew more than twice as fast as the rest of Amazon’s business, he added. They represented one out of every three units sold on Amazon in the U.S.

During “periods of discontinuity, substantial unexpected product trends emerge,” Jassy said. He gave the example of masks and hand sanitizer becoming popular items during the COVID-19 pandemic. And when the macroenvironment is uncertain, customers tend to choose sellers they trust who offer low pricing and speedy delivery, he added.

“We have emerged from these uncertain areas with more relative market segment share than we started and better set up for the future,” Jassy said. “I’m optimistic this could happen again.”

How products from China and tariffs impact Amazon

“Retailers who aren’t buying directly from China are typically buying from companies who themselves are buying from China, marking these items up, rebranding and selling to U.S. consumers,” Jassy said. “These retailers are buying the product at a higher price than Chinese sellers selling directly to U.S. consumers in our marketplace. So, the total tariff will be higher for these retailers than for China direct sellers.”

If higher tariffs arrive, Jassy noted, then Amazon’s 2 million or so sellers will not all take the same strategy.

“I mean, there are going to be plenty of sellers that decide to pass on those higher costs to end consumers, but they’re going to — we have a lot of sellers in lots of different countries, and not all of them are going to pursue the same track,” he said. “When you’ve got larger diversity like we have, we have a better chance of some of those sellers deciding that they’re going to capture share, and they’re not going to pass on all or any of those tariffs to customers.”

Days before the retailer had reported its earnings, the White House criticized Amazon after reports emerged that it was considering a plan to display the impact of U.S. tariffs on product prices, calling it a “hostile and political act.”

Following the backlash, Amazon issued a clarification. A company spokesperson had said the discussions about displaying tariff-related costs were “preliminary” and only involved Amazon Haul, a separate discount platform the company is piloting. There were no current plans to display tariff impact information across Amazon’s main retail platform, the company said.

Amazon sales Q1

In Q1, Amazon worldwide revenue hit $155.7 billion. That’s a 10% year-over-year increase.

Sales from Amazon’s online stores grew to about $57.41 billion in Q1. That’s up 6% from $54.67 billion in Amazon online sales during Q1 2024. Sales from Amazon’s physical stores — which include Whole Foods — also grew 6% year over year, to $5.53 billion in Q1 2025, from $5.20 billion the prior year.

In North America, Amazon Q1 sales grew 8% to reach $92.9 billion. Internationally, Amazon Q1 sales reached $33.5 billion 8% growth.

Amazon operating income was $5.8 billion, or a 6.3% margin, in North America. And internationally, it was a 3% margin with $1 billion in operating income.

Amazon ranks No. 1 in Digital Commerce 360’s Top 2000 Database. The database is how Digital Commerce 360 tracks the largest North American online retailers by their annual ecommerce sales. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database. That database ranks the 100 largest such marketplaces by third-party gross merchandise value (GMV).

Meanwhile, Amazon Web Services (AWS) revenue grew 17% year over year in Q1. That’s up to about $29.27 billion in Q1 2025, from $25.04 billion the year before.

Amazon’s AI business has a multibillion-dollar annual revenue run rate, Jassy said. It continued to grow triple-digit year-over-year percentages, he added. In Q1, Amazon introduced Alexa+, an upgraded version of its voice assistant that incorporates generative AI and launched with ecommerce features.

Amazon Ad revenue in Q1

Growing 19% year over year, Amazon Ads generated $13.9 billion in Q1 revenue. That reached $13.92 billion in Q1 2025, compared to $11.82 billion the year before.

Among the unit’s strengths, Jassy said, was its full-funnel advertising offerings in the U.S., which reach an audience of about 275 million people.

Amazon Ads reach targeted audiences on the merchant’s own entertainment properties, which include Prime Video, Twitch and IMDB.

Changes in Amazon fulfillment and delivery

Chief financial officer Brian Olsavsky said Amazon’s “newly re-architected” inbound network drove the retailer’s fulfillment and transportation network productivity in Q1. That led to better inventory placement and higher units per package, he said, which in turn resulted in lower delivery costs.

Still, Amazon is working on continuing to improve its cost structure by further “fine-tuning” its inbound network. Part of that will come from adding robotics and automation to its facilities, Olsavsky explained.

“Better placement drives more in-stock selection, reduces travel distances, and speeds up delivery,” Olsavsky said. “And having inventory in the right place at the right time increases the likelihood that multiple items can be combined in a package, which helps reduce packaging and cost.”

Amazon and the United Parcel Service (UPS) are also reducing their business together. UPS reached an agreement with Amazon to reduce the retailer’s volume in its network by more than half before June 2026, said Carol Tome, the carrier’s CEO.

“This volume is not profitable for us, nor a healthy fit for our network,” she said in UPS’ Q1 earnings call. “The Amazon volume we plan to keep is profitable and it is healthy volume. In other words, volume where we can add value like returns and seller fulfilled outbound volume.”

How tariffs can impact Amazon fulfillment

To keep operations smooth for busy selling periods such as Prime Day, Thanksgiving and the holiday season at large amid tariff uncertainty, Amazon has to be thoughtful about how much inventory it brings into its fulfillment nodes at any given time.

First- and third-party sellers might want to get as much inventory in as early as possible to try to beat a tariff deadline, he said.

“If you end up with too much inventory in your fulfillment network, it really slows down your productivity and your ability to get things out as quickly as you want for customers at the cost structure you want,” Jassy said.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s update on Amazon sales.