Are seller fees to thank for Amazon’s record profits 😩 [MDSR #40]

Hot Off The Presses 📰

Tariffs on, tariffs off. Preparing for the future of — and yes, writing about — U.S. trade policies is like trying to hit a moving target right now. 

Nonetheless, here’s what we know at the moment about the various ripple effects at play for ecompreneurs…

• Morgan Stanley estimates Amazon to be among the hardest-hit retailers with 25% exposure to China tariffs, which may or may not explain Amazon’s disappointingly conservative Q1 revenue forecast. 

• DTC brands are rightfully feeling like collateral damage right now after Trump squashed and then unsquashed the de minimis loophole. 

• Closing the de minimis loophole probably won’t kill Temu and Shein — but Temu is shaking up its business model anyway with a “half-custody” framework.

• On top of steep 25% blanket import duties on steel and aluminum products, Trump is making moves on reciprocal tariffs on all countries that will further strain global supply chains. 

For sellers, adaptability is the name of the game. So, don’t forget to prioritize flexibility in your sourcing, fulfillment, and pricing. 

And if it’s any consolation, almost everyone’s revisiting their pricing strategy right now. Retail spending just plunged for the first time since August, almost certainly due tariff fears. Now the end of the beauty boom is in sight thanks to these headwinds — and even Waffle House is charging a 50-cent fee on each egg it sells… And we think that says a lot. 

The good news is that despite the lukewarm revenue outlook, Amazon did see record annual profits last year. The bad news is that higher seller fees may be responsible for boosting their bottom line. 

In fact, a quarter of Amazon’s revenue now comes from seller fees, so it’s safe to say their bet that they can continue raising fees — as long as they provide enough market share and innovation to retain sellers — is paying off. 

Amazon innovations like turning old malls into distribution centers and putting +750,000 robots to work in fulfillment centers are interesting enough. The “Shop brand sites directly” feature that Amazon’s beta testing, however, is a little more intriguing.

And frankly, the decision to sunset their TikTok-esque ‘Inspire’ feed for product discovery makes perfect sense to us. No platform currently in existence can replicate the TikTok magic anyway, and that’s probably why Trump keeps floating ways to buy it. 

For now though, it’s back in action on the app stores despite its uncertain future, and appears to be thriving with the introduction of an encouraging “Most Loved” badge on popular products. They’re even testing an Amazon-challenging subscription model for TikTok Shop. 

The plot thickens…

Million Dollar Advice 💸 

If you think operational efficiency only impacts how smoothly your business days go, think again.  

In a time when Amazon is rewarding businesses with smooth operations and penalizing those who don’t, it’s on sellers to do everything in their power to better manage their stock and avoid costly mistakes.

Fortunately, SoStocked’s very own Chelsea Cohen is here to help.

Consumer trends to know for your 2025 marketing strategy ✍️

With so much going on for sellers right now, we’re certainly not here to judge if you haven’t planned out your 2025 marketing strategy yet. 

According to Amazon’s ad experts, there are 5 consumer trends that will shape the best approach to media and content this year — so, you should definitely apply them to your marketing strategy. 

Here are the highlights:

1. Consumers will lean further into AI when making purchases: 56% of online shoppers are comfortable using AI-integrated tools to buy products and services — and they want brands to use AI to provide price comparisons, deal alerts, support, and tailored recommendations.

2. Be empathetic about inflation concerns: In 2024, 1 in 3 consumers spent less due to inflation. Brands can embrace evolving shopping practices by demonstrating support and empathy across messaging touchpoints and finding ways to reward fiscally conscious shoppers in the new year.

3. Don’t forget about longform content: We all love shortform content, but longform content like podcasts and livestreams are just as valuable. Marketers should take a balanced approach, using both short and longform content to reach broader audiences and better engage customers in an ever-changing media landscape.

4. Influencer marketing won’t work without a baseline of trust: Trust is more important than discount codes or exclusive deals in influencer marketing. Influencers are even more important to successful marketing strategies for brands seeking to engage younger adult consumers. Nearly half of Gen Z makes purchases based on influencer recommendations.

5. Ad-supported streaming will continue to grow: In a nostalgic return to form, ad-supported streaming tiers are quickly becoming the norm in the streaming world, with only one in 10 consumers having updated their subscriptions to avoid ads. In fact, consumers now discover brands and products through this channel than they do outdoor advertising, personalized purchase recommendations on websites, ads in newspapers or magazines, or even ads seen in theaters.

Think these tips are helpful? Feel free to pass ‘em along 🙂 

eCom Stock Watch 📊

Click on the table below or view the full size data here. 

Join us for MDS Inspire 2025 🪄

It’s not every day that sellers get an opportunity to brush elbows with the highest concentration of 7-8 figure founders across Amazon, TikTok, and DTC commerce.

This isn’t your average event. MDS Inspire is a space where high-level sellers, generating over $1 million in sales, reveal the strategies that got them there. Forget the basics — this is about playing the game at the highest level and rewriting the rules.

📅 Date: March 24-25, 2025

📍 Location: Caesar Palace, Las Vegas

You are who you surround yourself with. So, step up and connect with sellers bigger than you, ready to share the tactics that transformed their businesses and can do the same for yours.

Don’t just take our word for it — hear some kind words from our attendees :) 

Connect with like-minded sellers at local events 🏙️ 

Are you an ecompreneur hungry to network with your local community?

Come join us in a relaxed atmosphere where you can enjoy drinks and food while networking with eCommerce sellers doing $1M+ in annual sales across channels including Amazon, Shopify, TikTok, and other DTC platforms.

• March 3rd | Chicago Seller Social 

• March 5th | MDS Connect Cocktail Social at Expo West in Anaheim, CA

• March 13th | Washington D.C. Seller Social 

• March 14th | Atlanta Seller Social

• March 19th | San Diego eCom Lunch 

Sign up if you’re planning to join — we hope you do! 

Did you see that post 📲

📑 A handy little template 📑 to give you hope for working with suppliers in China to offset the tariffs…

Until Next Time ✌️

As always, thanks for sticking with us until the end. 

If you’d care to share your thoughts on this newsletter, we’re all ears. Just hit reply to sound off. 

See you next time with more of the latest and greatest content you need to succeed this year 🔥

Sincerely, 

Looking for a mastermind community?

Million Dollar Sellers (MDS) is an exclusive community of 700+ like-minded Amazon and DTC sellers from all over the world. Collectively, our members generate more than 8 billion in annual sales and dominate some of the biggest categories on Amazon. MDS offers world-class events, chapters, industry discounts, resource libraries full of SOPs, templates, and video recordings of private trainings, workshops, events and so much more.

If you are looking for a business professional community made for ecom entrepreneurs, then consider applying today. 

*To qualify, you must be a full-time seller or brand owner and do at least 1 million in verified annual revenue. Will Amazon’s Returnless Resolutions solve the returns debacle? [MDSR #30]