Is Amazon FBA Dead In 2026? The Truth About Who Actually Makes Money

Is Selling on Amazon Worth It in 2026?

Overview of Amazon Selling Landscape

• The speaker asserts that selling on Amazon is generally not worth it in 2026 for most sellers, but acknowledges a small group achieving significant success.

• A stark contrast is drawn between successful sellers making $80,000 monthly and others losing money despite following popular strategies.

• The discussion will reveal the reasons behind this divide and what changes have occurred in the marketplace.

Key Changes in Selling Dynamics

• An example of a skincare brand making $60,000 monthly with minimal reviews illustrates how external platforms (Instagram/TikTok) drive traffic to Amazon.

• Previously, customers would discover products entirely within Amazon; now they often come from other sources, indicating a shift in consumer behavior.

• Sellers launching products without an audience are now competing against rising ad costs on Amazon rather than just product competition.

Understanding the New Business Model

• The speaker emphasizes that while it's still possible to make money on Amazon, the approach has fundamentally changed; it’s no longer a discovery platform but an infrastructure platform.

• Bringing your own traffic to Amazon can lead to better sales outcomes due to increased credibility and access to Prime shipping benefits.

Cost Implications and Traffic Strategies

• Competing for traffic through Amazon ads incurs high costs per click ($2-$3), which can erode profit margins before sales occur.

• If sellers generate their own traffic from social media or other channels, they only pay for infrastructure costs instead of advertising.

Evaluating Platforms: Amazon vs. Shopify

• The debate over whether selling on Amazon or Shopify is superior misses the point; the focus should be on who owns customer relationships post-sale.

• On Shopify, sellers retain customer data and ownership, while on Amazon, customers belong to the platform itself—affecting long-term business strategy.

Recommendations for New Sellers

• For new entrepreneurs wanting quick validation of demand, launching on Amazon is faster due to its established infrastructure.

• However, if building a brand with customer ownership is the goal, Shopify offers more control despite requiring more effort in setup and management.

E-commerce Strategies: Amazon vs. Shopify

Leveraging Both Platforms

• Successful sellers often utilize both Amazon and Shopify, building their brand on Shopify while offering customers the option to check out on Amazon for convenience.

• Some consumers prefer Amazon due to trust factors like Prime shipping and easy returns; thus, integrating both platforms can enhance customer experience.

• Sellers are not confined to one platform; they can leverage each for its strengths—using Amazon's infrastructure while maintaining control over branding through Shopify.

Who Should Sell on Amazon?

• Ideal candidates for selling on Amazon include those with an existing audience or traffic source (e.g., TikTok, email lists), as they can use Amazon’s fulfillment without needing to buy traffic.

• Testing product demand is easier on Amazon; sellers can launch products quickly and gauge interest before investing heavily in a full brand build-out.

• For marketers focused solely on product selection and attention generation, using Amazon simplifies operations like customer service and logistics despite associated fees.

Who Should Avoid Selling on Amazon?

• New sellers without a traffic plan should avoid starting on Amazon, as relying solely on ads or organic ranking is risky due to high competition and costs.

• Those who believe they can rank organically without external traffic will struggle since sales velocity is crucial for visibility in search results.

• Sellers unable to treat their venture as a testing ground may face significant risks due to high fees (40% - 60% of sale price), which could lead to financial losses if mistakes occur.

The Changing Landscape of E-commerce

• Many new sellers underestimate ad costs and fees when entering the market without an established audience, leading to poor financial outcomes.

• Attending e-commerce conferences like the Seller Summit provides insights from successful operators sharing practical strategies rather than theoretical advice.

Shifts in Seller Strategies

• Recent trends show that successful sellers now prioritize bringing their own traffic through social media channels instead of relying solely on Amazon’s tools for customer acquisition.

• The shift indicates that understanding how to drive discovery is essential for sustained profitability in e-commerce today.

Future Considerations

• Building an audience remains critical; if you lack attention or a strategy for gaining it, success will be challenging regardless of the platform used (Amazon or Shopify).

• Emerging technologies like AI search are changing how consumers find products, suggesting that traditional methods may soon become less effective.

The Importance of External Traffic for Success

Understanding the Shift in E-commerce Dynamics

• Organic traffic will become less significant in the future, emphasizing the need for sellers to adapt to external traffic sources.

• Sellers who fail to leverage external traffic by 2027 may struggle to succeed in the evolving marketplace.

• The key to success is not solely dependent on the platform (e.g., Amazon), but rather on whether you can engage potential customers with your product.

• If a seller cannot generate interest in their offerings, they must address this fundamental issue before focusing on platform strategies.

• Understanding how to attract and retain customer attention is crucial for thriving in e-commerce.