For a long time, Amazon was where risky sellers and small brands could thrive. Anyone with a little cash, a bit of initiative, and some product to sell could find some room on the marketplace. But in 2025, all that’s over rapidly.
Currently, there is an obvious and orchestrated shift in Amazon’s treatment of its third-party sellers.
It is not sufficient anymore to possess good products and plain marketing.
Amazon is making it harder, and those sellers who fail to keep pace are in a world of trouble.
Here’s a look at what’s changing, why it’s important, and what sellers must do to remain competitive in this new online shopping reality.
A Tighter, Tougher Marketplace
The most visible signs of change started earlier this year when Amazon slashed FBA storage capacity for many sellers. Where sellers previously had six months’ worth of storage space based on forecasted sales, the new limit is roughly five. That difference might seem small on paper—but in practice, it’s a 15–20% drop in inventory flexibility. For some accounts, the change was far more dramatic, with FBA limits slashed by as much as 75% during Q2 of 2025.
This is more than just an operations issue. It’s a wake-up call that Amazon is no longer interested in holding excess inventory for brands that can’t prove rapid sell-through or tight forecasting. Warehousing costs are rising, and Amazon wants only the most efficient players in the game.
But the storage crackdown is just the beginning.
The Reimbursement Model Flip
Amazon changed its policy for paying out sellers when products are lost or destroyed on March 31, 2025. Previously, sellers received payment based on the product’s retail price. Sellers, particularly those who ship fragile or high-value items, relied on this.
The payment to sellers is now calculated from the real cost of producing the item rather than the Amazon-listed price.
If the sellers don’t have documentation of that expense, they may receive much less—sometimes even a fraction of what they are owed. Payments sometimes fall 70 to 80 percent.
The response was quick and emphatic.
Reddit community r/FulfillmentByAmazon dubbed the move “nothing short of criminal,” and it indicates just how angry everyone was. Amazon isn’t, however, reconsidering. They desire greater transparency, improved cost control, and stricter guidelines regarding the proper records.
In Amazon’s view, this move isn’t punishing sellers—it’s making their system work better and more equitably in the long term.
Gating the Goldmines
Compounding the difficulty, Amazon is making its use of category and brand prohibitions more than ever before. Profit-rich categories such as Jewelry, Supplements, and Luxury Watches have long attracted a great number of sellers. But now, even in an attempt to list a new item in these categories, sellers frequently receive instant refusals such as “You do not qualify.”
The practice of getting up and running isn’t simply about putting a product up and getting some reviews anymore.
Sellers are now asked to offer in-depth brand information, documentation of their supply chain, and occasionally even invoices from authorized suppliers or manufacturers.
In brief, Amazon is making it increasingly difficult for new sellers to join high-value marketplaces, leaving these spaces only to established brands that are totally compliant.
A Marketplace Rebalanced—Not Reduced
One of the biggest misconceptions floating around is that Amazon is becoming less seller-friendly overall. That’s only half true. What’s really happening is a reallocation of opportunity.
According to internal data, monthly visits per active seller have increased from 2,162 in 2021 to 2,837 in 2025—a 31% jump. Traffic isn’t shrinking. It’s being funneled toward sellers with higher IPI scores, better sell-through rates, and more sophisticated operations.
Amazon isn’t just trimming the bottom. It’s actively rewarding the top with:
- Increased storage for efficient inventory
- Higher Buy Box percentages
- Access to invite-only programs and beta features
In short, they’re cutting noise and amplifying signals from the brands that treat Amazon not as a side hustle—but as a professional distribution channel.
What This Means for Sellers
There’s no sugarcoating it—Amazon is no longer the wild west of e-commerce. The “gold rush” period is over. Sellers can’t rely on a few viral reviews or aggressive PPC hacks to make their product stick. What’s needed now is something far more mature:
- Strategic inventory management
- Crystal-clear cost structures
- Strong brand documentation
- Compliance across the board—from reimbursements to category gating
This isn’t doom and gloom. In fact, for serious sellers, the current environment presents enormous opportunity. With fewer low-quality competitors, it’s easier to stand out—if you have the systems and structure to support scale.
At Ecomascendx, this is exactly where we’re focused. We’ve rebuilt our client operations to align with Amazon’s new direction—from uploading verified manufacturing costs to optimizing IPI scores and preparing brands for restricted category entry.
We’re no longer just optimizing listings—we’re building businesses that deserve to win on Amazon.
Final Thoughts
Amazon’s message is quite transparent:
To be successful in 2025 and beyond, you need to behave like an actual business, and not just a hobby.
This translates to investing in solid systems, and not band-aids.
It means envisioning sustained growth, not flash-in-the-pan tricks.
Above all, it means understanding that Amazon isn’t actively trying to drive sellers away.
They simply want to work with people who will take things seriously and develop.
The serious sellers who do so won’t merely survive the changes—they’ll do very well because of them.
