Why Amazon Is Desperate, and Why That’s Good for Sellers

Amazon is losing control of shopping, and in April 400 sellers proved it when they turned off their ads all at once and forced a policy reversal within 48 hours. Combined, those sellers make over two billion dollars a year.

Amazon called their bluff at first, then blinked. After 19 years in ecommerce, I have never seen sellers organize like this and actually win, and it worked because Amazon is in a position it has never been in before.

The most powerful company in retail is genuinely terrified, and its moves over the last six months look reactive, sloppy, and exactly like a company realizing the ground is shifting under it. Their panic is your opportunity, and here is what is really happening.

Key takeaways

• Amazon is losing both discovery and research. Shopping journeys starting on Amazon fell from 61% (2022) to 51% (2025) and keep dropping.
• A seller boycott won. 400 sellers worth $2B turned off ads, and Amazon reversed a payment change in 48 hours, because money is the only thing that moves it.
• Amazon’s moves reek of desperation: blocking AI bots, scraping brand sites with “Buy for Me,” Shop Direct, and a self-promoting Rufus assistant.
• Sellers are leaving: 2025 had 44% fewer new seller registrations, a decade low.
• Your move: build your own store as primary, show up where Gen Z discovers, and get embedded in AI answers.

Why Gen Z discovers products off Amazon

Gen Z discovers products on social media, and that shift is draining Amazon’s biggest advantage.

Right now, 44% of Gen Z consumers discover products on social media, and per Mintel, half of Gen Z are actively trying to spend less on Amazon.

The generation that will dominate consumer spending for 30 years treats Amazon as an afterthought for discovery.

In 2022, 61% of all online shopping journeys started on Amazon. That was the moat that made sellers tolerate fee hikes and policy changes, because where else would you go?

By 2025 that share dropped to 51%, and in 2026 it is plummeting. Among Gen Z, 56% start on Google, YouTube, or AI, and 12% start on TikTok.

At my conference last year, serious sellers who built decade-long Amazon businesses had stopped asking how to optimize PPC. Their question was whether Amazon should even be their primary channel.

Where shoppers research products instead of Amazon

Shoppers now research products on YouTube, Reddit, ChatGPT, and Gemini, so Amazon is losing the research phase on top of discovery. Research is the stage where someone already wants a standing desk and figures out which one to buy.

That stage used to happen on Amazon. Now it goes to YouTube for comparison videos, Reddit for real reviews, and AI assistants for direct answers.

Losing one phase could be temporary. Losing both at once means Amazon’s value as a place people go to shop is eroding.

Amazon’s own numbers show the squeeze. Advertising revenue grew 22% year over year and seller services grew 11%, while retail sales grew only 7%.

When the organic funnel weakens, sellers cannot get found without paying. Amazon adds ad placements and makes organic ranking harder to hold, and the ad line looks great on the earnings call.

That is Amazon covering for a broken discovery engine by charging you more for visibility you used to get free. My own ad costs have climbed double digits every year for five years.

How Amazon’s AI blocking, Buy for Me, Shop Direct, and Rufus signal desperation

Amazon has made four reactive moves in the last year, and together they look like a company acting out of desperation. Each one patches a leak while the underlying problem builds, and the cost lands on the sellers still on the platform.

• Blocking AI. In August 2025, Amazon added 47 AI bots to its blocked list, shutting out OpenAI, Anthropic, Perplexity, and Google. If someone asks ChatGPT for the best vacuum under $200, Amazon loses the session, the ad impression, and the sale.
• Buy for Me. Amazon launched Buy for Me in February 2025, and its AI finds and buys products elsewhere when Amazon does not carry them. Brand owners started receiving orders from a buyforme.amazon.com address for products they never listed, because Amazon’s AI scraped their sites and bought without permission. The orders often got product info wrong and created customer-service headaches, all from the same company that blocks 47 external AI bots from scraping Amazon.
• Shop Direct. Amazon now refers customers to merchants who keep their own inventory and fulfillment, covering over 100 million products across 400,000 merchants. In this model Amazon owns the traffic while merchants own the product, which is Amazon admitting it can no longer win on selection.
• Rufus. Amazon’s AI shopping assistant has seen users rise 140% and interactions rise 210%. As covered by Retail Tech Innovation Hub, 83% of its suggestions point to Amazon-branded or Amazon-sold products, with Amazon Basics in 41% of results regardless of fit. Rufus works as a promotional tool dressed up as discovery, and Amazon keeps the button tiny because users complained loudly when it tested a popup. Shoppers never asked for it, and Amazon keeps pushing it on them anyway.

Amazon new seller registrations hit a decade low in 2025

Amazon had 44% fewer new seller registrations in 2025 than in 2024, the lowest annual total in a decade.

Per Marketplace Pulse, American sellers dropped from 26% of new registrations to 16%, while Chinese sellers are now nearly 60% of sign-ups.

How 400 sellers forced Amazon to reverse a policy in 48 hours

On April 15, 400 sellers doing over two billion dollars combined turned off their ads simultaneously, and Amazon deferred its ad-payment change within 48 hours. The boycott answered three new policies at once.

Amazon had rolled out a 7-day payout delay after delivery, a ban on using credit cards to pay for ads, and a new 3.5% fuel surcharge.

The honest read is that Amazon flinched because the coalition threatened a real number in advertising revenue. Money is the only thing that moves this platform.

How to build a brand that survives Amazon fee hikes

Amazon’s weakening grip on discovery and research is good news for sellers, because its leverage over you has never been lower. The argument for total Amazon dependence was that customers started there with no alternative, and that is no longer true.

When your brand is strong, a fee hike is a nuisance. When Amazon is your only channel, the same hike is a crisis, so here is how to build the strong version.

Make your own ecommerce store the primary business

Your own store is where you own everything Amazon has been renting to you: the customer relationship, the email address, the data, and the margin. Every sale there is a customer Amazon cannot charge you to reach again.

I have run the DTC side of my handkerchief business alongside Amazon for years, and its margins are more than double, especially counting lifetime value.

Show up on the social platform where Gen Z discovers products

Social and AI have won discovery for Gen Z, which leaves Amazon as the place where the transaction happens after the idea forms somewhere else. Pick one platform where your customer actually spends time and post once a day, the way winning sellers do.

Get your products recommended in AI answers

Amazon blocked 47 AI bots because an AI answer means a lost visit, so your strategy should be the opposite. When someone asks ChatGPT or Gemini for the best product in your category, an answer comes back, and you want to be that answer.

To get there, create content, collect reviews, and get mentioned across the web. Amazon is building a wall to keep AI out, and you want to be embedded in it.

Sell on TikTok Shop, Shopify, Amazon, and Walmart

The sellers in the best position spread their bets across TikTok Shop, Shopify, Amazon, and Walmart, wherever customers are. No single policy change can take them out.

Amazon still does over half a trillion dollars in retail and will stay a major channel. It is changing in ways that favor sellers who built a real brand over those who are all-in with nowhere else to go.

Frequently asked questions

Why is Amazon losing control of shopping?

Amazon is losing control of shopping because discovery and research moved off the platform. Shopping journeys starting on Amazon fell from 61% in 2022 to 51% in 2025, as Gen Z discovers products on social media and researches them on YouTube, Reddit, and AI tools.

Did the Amazon seller boycott actually work?

The Amazon seller boycott worked. Around 400 sellers with over two billion dollars in combined revenue turned off their ads at once, and Amazon deferred its ad-payment policy change within 48 hours because the coalition threatened real advertising revenue.

Why did Amazon block AI shopping bots?

Amazon blocked 47 AI bots in August 2025, including those from OpenAI, Anthropic, Perplexity, and Google, because every shopping question an AI answers elsewhere costs Amazon the session, the ad impression, and the sale. At the same time, its own Buy for Me agent scraped brand websites and bought products without permission.

What is Amazon Rufus and is it useful?

Rufus is Amazon’s AI shopping assistant, and about 83% of its suggestions point to Amazon-branded or Amazon-sold products, with Amazon Basics appearing in 41% of results. It works more as a promotional tool than a neutral discovery tool, and users have pushed back on it.

Are sellers leaving Amazon?

Fewer sellers are joining Amazon, and new seller registrations hit a decade low in 2025, down 44% from 2024. American sellers fell from 26% to 16% of sign-ups while Chinese sellers rose to nearly 60%, and established sellers increasingly question whether Amazon should be their primary channel.

What should sellers do as Amazon’s grip weakens?

Sellers should make their own store the primary business so they own the customer, data, and margin. They should also show up daily where customers discover products, get recommended in AI answers through content and reviews, and sell across several channels so no single policy change can take them out.