Why Amazon Keeps Raising Fees…And What Sellers Need to Do Next | EP. #231

Amazon isn’t going anywhere, but the way brands use it has to change.

In this 231st episode of The E-Comm Show, Andrew Maff breaks down the reality of selling on Amazon in 2026 and what brands need to do to stay competitive. Learn how to adapt your strategy, diversify your channels, and build a more sustainable e-commerce business beyond the marketplace.

What You’ll Learn:

• Why Amazon's margins are shrinking
• How to compete in a saturated marketplace 
• Why DTC is becoming essential
• How to future-proof your e-commerce brand

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Transcript

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Andrew Maff: 0:24

Hello everyone, and welcome to another episode of the E comm show. As usual. I'm your host, Andrew Maff, and today's episode is brought to you by fuck Amazon. This stuff's getting ridiculous. Okay? This one's going to be, I'm getting heated on this one because I'm getting kind of like, it's pissing me off now. So here's, here's my normal spiel, right? If you've ever seen me speak over the past couple years, there's some wild statistics that I've always kind of talked about. They are scary. Over the last five years, there has been an average increase of 10% in FBA fees year over year. So every year, on average, they have increased by 10% CPCs have averaged an increase of 8% year over year. And then was it? Competition is averaging. Competition is average an increase of 6% year over year. It's 2026 in I just it wasn't prosperous. So 2025 prosper. I spoke on a stage right next to Amazon's booth. I don't know why they would do that to me. And someone came up to me after my my talk, and they were worked at Amazon. And the guy told me he was actually, I thought he was gonna yell at me because I was not nice to Amazon. I never am. And he told me he goes, actually, it's way worse. He said that set. He said, 73% of sellers, 7376 something like that, in 2024 73-76% of sellers in 2024 were sellers from overseas. So they are, what did he say? They either have an entity in the States, but they're based overseas, or they're literally just overseas. So that's the

Narrator: 2:14

groundbreaking get to know the ins and outs of

Andrew Maff: 2:14

job to figure out that's what I've been kind of preaching. More or less. I take that with a grain of salt too. I don't know if that dude if that dude hated his job or whatever, but that just seems astronomically high to me, even if it's half that, that's still wild, but it makes sense, because Amazon's a race to the bottom, but it has just gotten so much worse at this point, like sellers are so pissed that a lot of them are boycotting. So if you haven't heard just in 2026 we're not even halfway through the year yet. We had new FBA inbound placement fees that went in play in January. Then as of recently, they did a 3.5% fuel and logistics surcharge. And now they're doing was it the reserve hold seven days after delivery, or whatever? So you're not getting paid until seven days after the customers received the product, as opposed to the way they were doing it the e Commerce Industry, from top leaders in the space. Let's before. And then the other thing that really pissed people off that Amazon, this one, at least they corrected and pushed it out get into it! to August, but they are now taking Amazon advertising costs out of your overall payment, as opposed to through a credit card, so it won't hit your credit card unless you're spending more money in ads than you're actually making, which hopefully that's not the case. So say goodbye to all your credit card points. good all of our brands, are super It's so I swear there's someone's job to figure out new sellers, the mastermind that a bunch of E commerce brands are in. They got super cranky about it, and so they boycotted on that day, where they turned off all their ads, or, I believe some people like, reduced it just to $1 so they didn't, kind of lose some of the ranking spot. Sellers are pissed, pissed off when they did the reserve hold thing and push for seven days. Oh my god, a we made a mistake where we heard about it, and because operations and finances, like, we're in the marketing area, so like, we don't we try not to touch that type of stuff. We, you know, we let the people that are specialized in that do that, marketing when it was happening, or really what, how it was going to work, and it went into place so fast. And I can tell you right now the amount of clients that reached out to us that were super pissed off because they thought that, like, sales had tanked or something crazy was going on. And so we had to, like, explain to a lot of brands, like, Yeah, so us and like two others, but I they did this whole thing. So there was a whole uproar of a ton of brands that we work with, which, oh, I can only imagine how many people like, didn't get the notice and like, the next thing you know, like, they just weren't being paid out. I know that if you've ever if you've ever seen me speak, if you ever spoken to me, if you've ever listened to this podcast, if you've ever read any of my content, if you've ever seen any my social media posts, all I do is bitch about Amazon and it's it's fun to me, but at this point, like, Dude, fuck Amazon. This is ridiculous. The amount of stupid fees. Like, if you're a healthy Amazon brand, and you have really, kind of, like, stuck to that, like, you know you're a healthy Amazon brand, you have really good margins. You're probably sitting at like, So I have a theory on kind of what's happening, more or less like, 18 to 20% tacos, give or take, right? That's kind of on the higher end. I mean, I know a ton of brands that are super don't know if they're going to let me keep that after this thrilled if they're at a 10% I know some brands that are thrilled even a lower percent, but, like, even that fuel surge surcharge just three and a half percent gone. So now, like, good luck if you're at 15. Like, it's just ridiculous, like, the amount of ridiculous stuff that they keep adding. ish, so I'm going to get kicked out of this group by by episode, but whatever. So in the Advisory Council, this was last year. Yeah, last year. So two years ago I it was buy with prime, and I'm all in on buy with prime. I love it, and they don't pay me anything. There's literally no benefit to they send us brands. This is, this is my benefit. They send us brands continuing to talk about this stuff, but that's fine. I don't to help implement buy with prime, and then we get to meet the brand, and then obviously we learn about their marketing, and we talk to them from there, right? So it's kind of a lead generator for us. But outside of that, that's it. I have no other benefit. There's literally nothing else. So when I tell So I like it because we've done it enough times that I have seen the math that A, it improves your conversion rate on your website. B, even if you ignore the Buy with prime orders, we still see conversion rate improvements, because theoretically being all of that additional Amazon branding, the reviews, etc, all of that kind of helps with social proof and a little bit more comfortable, especially for like, net new customers, and so you kind of get over that barrier to entry, and so they're more likely to convert. I love it. I think it makes a ton of sense. I also love that I get to keep the data. I also know that so many people come to our websites, and then they leave and they go to Amazon, because that's just where they prefer to shop. And so this keeps them on the site. You get to keep the data. You can control the customer and etc. Plus, now they let you drive traffic from Amazon to your website if you have buy with prime by using DSP. So it's fantastic. I loved it all in on it, 2024, 2025, comes around. We have next advisory council meeting, which always happens around, accelerate, and there's a big shift. I am not an operations guy. We are not an operations company. I cannot tell you about inventory and fulfillment and when you should do it. That is not my job. My job is marketing. All we focus on is marketing, and that is it. Sometimes that comes back to bite us in the ass, but it is what it is. But what I found very interesting was that conversation in 2025 was there was just a huge shift. All they talked about was, like, operational stuff, and there's a big push to MCF. I really like MCF too. Ish, my problem with MCF is there's not you can still get, like, it's not prime branding, but you can still get, like, some of, like, the guaranteed shipping, and, you know, there's certain timeframes that you can get shipping involved. And like, it's a lot more like the actual day it's going to show up, is a little bit more realistic, and you can still do the DSP thing, but like, you're not really getting too much of the other benefits. So like, from a conversion rate perspective, it's not fantastic. It's just great from an operational perspective. So me, as a marketer, I go, cool. I'm glad that your warehouse is a little bit like. Lighter and people you should do buy with prime and they're like, oh, easier for you to manage, but like, doesn't really affect your marketing, excluding, like slightly more on the improved that's all you talk about. You're probably getting shipping side. So they started really pushing it. And then they started talking about, oh man, see, I'm not in operations. I something for like, No, I get nothing. always forget what this stuff's called.

Narrator: 10:18

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Andrew Maff: 10:51

Amazon is now helping control like freight, so like shipping from, you know, overseas, putting it on a boat and getting it to the docks, like that, that type of stuff, right? So they're, they're handling the whole pipeline of the operation and inventory, and so you can get involved with that. So they talked about that a ton. And one of the things that I found very interesting was there was so much conversation around the operational side and, like, inventory and fulfillment, etc. And they kind of got away a little bit from buy with prime ish. And they've definitely, like, completely, like, even when you go to accelerate, they talk about some of the normal crap that you would hear at Amazon, but a lot of it was like DSP, and now you can run ads on Netflix, and you can, you know, run ads here and there, and they talked about all these things that were off marketplace. And I started to kind of put two and two together. The one thing that Amazon just no one can beat them is their fulfillment, right? Even Walmart's not always getting it to you as fast as they say, or on the exact day that they say they're going to do it. You know, all these other marketplaces with Shein and all Chewy, like all of them, like there's so many, they're not always getting it to you as fast, like Amazon's fulfillment is, where they have their biggest differentiator. And so when I realized they're leaning in heavier on MCF, made me realize they're trying to really own if every product is ordered and could go through Amazon, they would 100% have it that way. So what it made me kind of realize, after hearing that and then going to accelerate. It was like, I don't, I don't want to say they're giving up on the marketplace. That would be obscene, but it's almost like Amazon is accepting that there's they're hitting a wall if in 2025 there was less new sellers than normal. So like their percentage of increased in new sellers coming on board went down, even though it's way easier to get onto Amazon now. And so the other thing is, I think that Amazon has realized the monster that they've created. They made it so easy for people to get onto Amazon and sell a ton of product, and they made it super easy for overseas sellers to get on Amazon to sell a ton of product, that they turned it into this race to the bottom. And so Amazon is just becoming this glorified flea market of crack product. Like, there's just a bunch of stuff on there that sucks. Like, if you shop on Amazon a lot, you know, if you buy the least expensive thing, you're probably going to have to buy it again. One of my favorite sayings ever is, cheap is expensive. And if you go on Amazon, you buy the cheapest thing, it gets expensive because you have to repurchase it over and over and over again. So you usually don't get the cheapest thing. You kind of look at reviews, and you move up a little bit and go, don't get the cheapest one. Go, you know, few dollars up or whatever. Keep going on a tangent time. But so I think that Amazon has realized they're hitting a capacity right. Like, I don't know if you remember, there used to be guys who would make podcasts like this, or they'd be posting on social media all the time about we can help you find product to sell on Amazon. Right? They would find keywords that had a good amount of search volume but not a lot of competition, and you would just go randomly create some product and sell a bunch of random shit on Amazon, and then they would make money that way, right? I don't hear those guys much anymore. I can't tell you the last time I saw something like that, and I don't want to say like, All right, we're selling all of the products now, that's clearly not the case. I think what's happening is. So all of the products that are already known are pretty much capped out, and now it's up to differentiation, either from invention or from basically differentiated audiences, in which case the only way that you're going to build a brand on Amazon with a me too, product. If you really think that I created something that's maybe you can argue it's a little bit better, but it's really just the marketing is catered more towards this audience. Take liquid death. It's fucking water like, but all they did was market it to a different way, right? So all of a sudden it's everywhere. That's literally what I'm talking about. Like, okay, you picked a different audience, and you went that direction. Liquid death did not make their money on Amazon. They had to educate the market, they had to build a brand, they had to build their authority, and then they went on to Amazon just to make sure that they were available, right? It's the same thing. So now we're in the DDC world. Normally I would be sitting here going, Oh man, it's my time to shine, because I've been talking about omni channel diversification for years. But Amazon, I like Amazon. I love Amazon as a customer acquisition channel. It's a middle of funnel platform. People are searching. It is just a glorified product search engine. People are actively looking for stuff. As long as you're there and you show up, you're going to get that customer. And then my role was, okay, we've got your Amazon a good place. Let's acquire as many new customers as we can from that search, and then let's find ways to get them off Amazon, diversify you to DTC and or to other marketplaces so you're not so relying on the channel. Let's own your own customer data. Let's control the customer's future. Let's control your messaging. Let's actually build a brand. Let's actually build like, a true massive e commerce business and everyone retires to Fiji, right? Well, Amazon keeps jacking up these damn fees that it's like, Fuck man, like, like, you can't how are you supposed to run a viable business with these ridiculous Amazon fees, this I'm going to get in so much trouble. This is I'm getting cranky On this episode, and that's okay fuck it. I'm also cursing like a sailor, but like, I have a I'm prepping for a event we're doing tomorrow, and like, I'm just running the statistics and the numbers on this. Of like, how do you make money doing this anymore? CBCs are up, and there's significantly more competition, and so now you've just got less real estate. So like, obviously CPCs are going to continue to go up. You have this other issue where you have overseas sellers with these ridiculous margins, because they can make these products for basically nothing. And so now they're just jacking up CPCs so they can just own the spot, basically playing the waiting game until all their competitors go screw it. I can't do this anymore. And they close like this. It's just, it's brutal. It's this is, you know, you had a 2010, to 20, like 18 being like, the heyday, everyone was making their money on Amazon. It was great, where everyone was rolling in it. They were super happy. You could throw up a shitty product with a shitty listing, and then it would work totally fine. You can't do that anymore. You can't even come close to doing that anymore. It's it's made e commerce less attractive, like there's less sellers going on to Amazon. But then there's way more sellers starting to diversify. They're going to other every marketplace they could possibly think of. In my opinion, the smarter ones are developing their own website. Like this is going to kind of level the playing field. One of the reasons that I'm also such a big fan of developing your own website, which, by the way, side note, it's not right for every single product, right? Like, there's products out there that, like, you don't need your own website. Like, what are you doing? Like, this is a ancillary, like, I'm going to grab this real quick type of product. You're going to do great on marketplaces. You're going to suck building a brand. I'm sorry. It's the reality. It is what it is, unless you build such a large product line towards a very specific category that your website is actually your product. It's the thing that generates a lot of business for you, and people come there to shop, to buy a ton of stuff, because you have such a large offering outside of that doesn't really work. But if you are building your own website, you are building your own brand. One of the reasons I love this is the biggest thing, and it's especially when I mentioned this, I see, I see E commerce sellers, ears perk up, because they never think about it. It's not about the immediate Well, it's not 100% about the immediate profitability, right? Like, obviously you have to be profitable. Let me be very clear that I'm not saying, like, don't be profitable and be rich. No, that's not what I'm saying. But what I am saying is the value of your business skyrockets when you have your own website as. Well as your other marketplaces, right when you're selling marketplaces, and you go to exit one day, all you have to offer is, you know, the processes that you may have built out, and then your inventory, and then obviously, like, projected profits, and they kind of just judge it from there, on average, if you're about a $10 million brand, and let's say you're only on Amazon or other marketplaces, or like an FBA brand, you'll exit for like a two to three XE. But a give or take, that is kind of what I've seen, like the industry standard be, if you have your own website, that almost doubles. If you're a $10 million brand, you have your own website, it jumps like three to five because you have control the customer. You have the customer data. You have social media following. You have an email list, you have people visiting your website. You have all these people that you've pixeled, you've like, you all this data that you can leverage. So not only does it make it more attractive to another business, because now they can come in and have some data to leverage. It also opens up your buyer pool, because instead of getting sucked into one of these garbage aggregators that basically aren't lasting anymore, you open up to being purchased by like a complimentary company. So if they, if you sell, you know, pet supplies, and they sell pet food, they can absolutely be interested in acquiring you because now they can not only take on your product line, your processes and, you know, project profitability, like I just mentioned, they can also take on your customer data and sell them other products. So now all of a sudden, it improves their business as well. So your value is that much higher. So on average, you're jumping up to a three to 5x even if you're like, in that, like, literally, like, right at that eight figure range. That's typically what I've seen. So that's why I always lean into developing your own website. And the more and more that Amazon keeps jacking up these fees, like, it's, it's gonna be like, it's gonna be like, fucking Tiktok, that's what's gonna happen. It's gonna be, it's gonna be like Tiktok. Tiktok. I don't know if you knew this. I had another podcast on this. So if you want to hear me rant about Tiktok for a little bit, go check that one out. But basically, when I was at so we were at prosper innovate asgtg And I went to some MDS event, some additional MDS event, I can't remember, but everyone I spoke to, and by the way, at prosper, I even spoke to two Tiktok agencies that said the same thing, which blew my mind. No one's profitable on that channel. No one like if you are, it's minimal, it's it's such a great customer acquisition channel, where you can introduce the product to new people, right? So you have, they're giving up good percentage to affiliates, because you want to get the better affiliates, you're going to have to give a better percentage. Those affiliates want to see volume, so they usually ask you to, like, discount the product a little bit, then you've got, you know, cogs and fulfillment and all that fun stuff. So by the time you actually factor in your return on Tiktok, yeah, great. You're doing six figures a month. It's literally making you$0 but if you have your own DTC business, that's awesome, because now you're you're acquiring customers at, ideally a break even, and then you can look at, okay, how can I upsell them on my website and through retention marketing? And you know, what's the LTV? So all of a sudden, now this is where I find Amazon sellers. When they go to DTC always have these problems. Is they're so used to I spent this and I made this, what are my tacos? And that's it. So it's literally they're living day by day. But in DTC, you're living in the future. You're living on customer acquisition cost to LTV ratio, right? What does it take you to acquire a customer, and how much money are they going to spend with you over whatever you define the lifetime to be? That's that's what you have to focus on. And that's a different mindset. And that's kind of where that becomes a little bit more of a struggle for E commerce sellers. I usually try to keep these like between 2025 minutes, and I'm kind of coming out. Minutes, and I'm kind of coming up to an edge. And I know that I got heated on this one. I kind of got frustrated. I hope if you're at Amazon, I still really enjoy working with everyone on that team. I apologize. But thank you all appreciate it. I'm going to cut this one out. Please do the usual thing, rate review, subscribe all that fun stuff. Or head over to the ecommshow.com to check out all of our previous episodes. Or shoot me an email at andrew@bluetusker.com if you want to come on this show and just vent like I do, screw it. Let's have let's turn this into a therapy session. Thank you all. Appreciate you joining me, and I will see you all next time. Have a good one!

Narrator: 24:42

Thank you for tuning in to the E comm show. Head over to Ecommshow.com to subscribe on your favorite podcast platform or on the Bluetuskr YouTube channel. The E comm show is brought to you by Bluetuskr, a full service digital marketing company specifically for E commerce. Sellers looking to accelerate their growth, go to Bluetuskr.com now for more information, make sure to tune in next week for another amazing episode of the E comm show!