NEW 3.5hp 4stroke stalls in idle

[sailor10029]

Hi everyone- I just purchased a brand new 4 stroke mercury 3.5hp outboard for my tender. It starts no problem, and as long as I have the throttle turned (giving it plenty of gas) it runs fine. However, it has begun to stall when idling (in neutral or forward gear) regardless of how long I warm it up.This it makes it difficult or impossible to switch from neutral into forward gear (since ideally this action should be done when the engine is in idle). I thought perhaps it has something to do with water in the gas but I purchased new 93 octane gas and put it in the engine with no improvement. Is is possible that the 10% ethanol mix may have a role? Any other ideas for me to check out?
Thanks-Joe