The Amazon Seller's Dilemma: Trapped in the Flywheel
How Amazon Keeps Changing the Rules—and Why Sellers Have No Choice but to Keep Up
Being an Amazon seller in 2025 feels like running on a treadmill that keeps speeding up. Amazon’s latest announcement slashing reimbursements for lost inventory is just the newest hit to our margins.
If you thought their promise of "simplicity and stability" in 2025 was a relief, you might be in for a surprise.
The only thing consistent about selling on Amazon is change: fees go up, policies shift, and sellers like us are left scrambling to adjust.
The Unstoppable Amazon Flywheel: Sellers Get Squeezed
Amazon’s entire ecosystem operates like a flywheel—one that benefits the company at the expense of its sellers. The FTC lawsuit makes it clear: we’re not here because Amazon is the best option, but because there’s no real alternative.
With over $750 billion in Gross Merchandise Value (GMV) moving through its marketplace, and third-party sellers driving most of that revenue, leaving Amazon isn’t an option—it’s a death sentence for many businesses.
The latest reimbursement change, which switches from a retail price calculation to a cost-based model, further shrinks our profits.
Now, sellers won’t be reimbursed for shipping, customs duties, or other expenses, making every lost item a direct hit to the bottom line. And the claim window? Slashed from 18 months to just 60 days.
These changes, according to eComCatalyst and Carbon6, are poised to shake up fulfillment strategies and increase seller frustration.
A System Built for Dependence
December’s Amazon worker strikes and the viral "Buy Now" documentary exposed the company’s treatment of its workforce. Yet, Black Friday sales soared to record highs.
This contradiction mirrors the plight of third-party sellers: we know we’re being squeezed, but we stay because we have no choice. The marketplace works for Amazon, not for us, and every change forces us to adapt—because walking away isn’t a real option.
Is the "Anti-Amazon Alliance" a Real Solution?
Industry analysts are buzzing about the so-called "Anti-Amazon Alliance"—a coalition of Walmart, Shopify, Temu, and TikTok trying to chip away at Amazon’s dominance.
Sellers are diversifying onto these platforms, but let’s be real: it’s a slow climb. Each dollar that flows through an alternative platform helps loosen Amazon’s grip, but for now, it still holds the power.
Meanwhile, Amazon’s dominance remains intact. The company is facing an antitrust lawsuit from the FTC, which alleges it manipulates pricing, punishes sellers for offering lower prices elsewhere, and enforces anti-competitive practices.
While a federal judge recently allowed the case to move forward, it’s unclear how long sellers will have to wait before seeing any real impact.
The Seller's Playbook for Survival
Amazon’s latest policy changes may feel like another punch in the gut, but the smartest sellers are already adapting. Here’s how:
🚀 Master Cost Efficiency – With Amazon paying less for lost inventory, sellers need airtight cost tracking and price recalibration to maintain margins.
💡 Expand Beyond Amazon – Walmart Marketplace, TikTok Shop, and Shopify are investing in seller-friendly initiatives. Diversifying sales channels is now a survival strategy, not an option.
⚖️ Stay Informed on Legal Battles – The FTC’s case against Amazon could reshape the marketplace. Smart sellers will be ready to capitalize on regulatory shifts that level the playing field.
The Future: Adapt or Get Left Behind
After 17 years in the e-commerce space, I’ve learned one thing: Amazon’s flywheel isn’t slowing down. The key isn’t fighting it…it’s learning to use its momentum to your advantage while building a multi-channel strategy that protects your business from future policy shifts.
Amazon’s power over sellers is real, but the best among us know how to turn challenges into opportunities. The question isn’t whether Amazon is good or bad—it’s whether we can build businesses strong enough to outlast the next change.
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