Amazon's Prime Day is losing its luster among a critical group: sellers. Some third-party merchants who previously sold China-made goods during Amazon's premier July shopping event are sitting it out this year or reducing the amount of discounted merchandise they offer.

Participation in Prime Day is optional for Amazon vendors, but the e-commerce giant spends millions promoting the shopping holiday each year, inciting merchants with the opportunity to sell their

Some third-party Amazon merchants (NASDAQ:AMZN) who previously sold China-made goods during Prime Day are sitting it out this year or reducing the amount of discounted merchandise they offer, according to an exclusive Reuters report from Monday.