Amazon Is Becoming Easier to Win But Harder to Operate Profitably
Source: Pexels
Two new industry reports paint an interesting picture of Amazon in 2026.
Nova Analytics' Seller Index 2026, based on responses from 181 sellers representing more than $2 billion in annual revenue, found that only 23% qualify as "thriving", defined as businesses experiencing both revenue growth and healthy margins.
The remaining sellers fall into three distinct groups: 38% are "grinding," generating more revenue while seeing margins decline; 24% are consolidating, with flat or declining sales; and 15% are distressed, facing declining revenue alongside deteriorating profitability.
At the same time, Marketplace Pulse reports that Amazon's competitive landscape is quietly changing. Combined monthly traffic across Amazon's global marketplaces increased to 5.5 billion visits, while the number of active sellers declined 16% year over year to fewer than 1.56 million.
In other words, there are now fewer sellers competing for a growing customer base.
However, Marketplace Pulse argues this doesn't necessarily make selling easier. Instead, it rewards businesses that execute better. The report notes that fewer than 8,000 sellers now account for half of Amazon's U.S. third-party GMV, illustrating how marketplace success is becoming increasingly concentrated among highly sophisticated operators.
Profitability Is Becoming the Real Competitive Metric
Source: Pexels
Perhaps the biggest takeaway from both reports is that sales growth alone is no longer a reliable indicator of business health.
According to Nova Analytics, sellers in the largest cohort continue increasing revenue while simultaneously losing margin. Rising CPCs, additional fulfillment fees, inbound placement charges, pricing pressure, and higher operating costs are offsetting much of that growth.
Meanwhile, Marketplace Pulse highlights several structural trends reshaping the marketplace, including increasing AI adoption, continued growth of Chinese sellers, tariff-related cost pressures, and ongoing fee expansion.
Taken together, these reports suggest Amazon is evolving into a marketplace where operational discipline matters more than ever.
Brands that closely monitor SKU profitability, advertising efficiency, inventory performance, and pricing strategy are increasingly separating themselves from businesses focused primarily on top-line revenue. Sellers looking to improve profitability should regularly evaluate Amazon PPC performance alongside Amazon listing optimization to improve both conversion rates and advertising efficiency instead of relying solely on higher ad spend.
The findings also reinforce the importance of making decisions based on contribution margin rather than sales volume alone. As Amazon continues rewarding operational maturity, brands with stronger reporting and forecasting capabilities are likely to outperform competitors despite a more challenging cost environment.
Amazon Isn't Too Competitive, It's More Demanding
These reports challenge one of the biggest misconceptions in ecommerce: that Amazon is becoming too competitive to grow.
The opportunity is still expanding. Customer demand continues to increase while active seller counts decline across many marketplaces. The difference is that Amazon increasingly rewards businesses that understand profitability, inventory efficiency, advertising performance, and operational excellence, not just revenue growth.
For brands that can optimize those fundamentals, today's marketplace may actually present more opportunity than it did several years ago.
If you're looking to improve profitability rather than simply grow sales, explore beBOLD Digital's Amazon Full Account Management Services to learn how our team helps brands optimize advertising, catalog performance, profitability, and long-term marketplace growth.
Sources
Only 23% of Amazon Sellers Thrive: Seller Index 2026
Amazon's Least Competitive Marketplace Is Now Everywhere
Comments