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Every big tech platform that ecommerce sellers depend on eventually gets worse for the people who built it. Amazon, eBay, Etsy, Facebook, and Shopify all follow the same three-stage playbook: attract users with a great free service, lock them in, then squeeze both sides for every dollar of profit they can extract. In this episode of the My Wife Quit Her Job podcast, I explain why this pattern is so predictable and what you have to do to stop it from killing your business.
I have been selling on Amazon for over a decade, and I have personally watched the FBA program go from a no-brainer to a fee-riddled trap. The same thing happened to Facebook pages, then Facebook groups, then Facebook Messenger marketing. Each time I built on rented land, the landlord raised the rent or bulldozed the building.
Below I break down the exact stages every platform moves through, the specific 2024 Amazon fees that pushed sellers over the edge, and the “owned marketing” strategy I now use to keep my businesses insulated from the next platform meltdown.
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Table of Contents
Key takeaways
- Every big tech platform follows a three-stage pattern: win users, lock them in, then squeeze profit until quality collapses.
- Amazon FBA fees now regularly consume 45 to 60 percent of revenue between the 15 percent referral fee, 10 to 15 percent FBA fee, and 20 to 30 percent for ads.
- Amazon’s Q4 2023 third-party seller revenue hit 43.4 billion dollars, up 20 percent year over year, while retail revenue rose only 9 percent. Most of the growth came from squeezing sellers, not selling more products.
- Facebook has burned sellers three times: pages, groups, and Messenger all lost reach the moment they became valuable.
- The defense is owned marketing: email, SMS, and your own website. You control the customer list, so no platform can turn off the tap.
- Ride new waves early (TikTok Shop, TikTok organic) and expect them to enshittify on schedule too.
What is the enshittification of big tech platforms?
Enshittification is the predictable decay of a two-sided platform as it matures, moving from great for users, to great for business customers, to great only for shareholders. Cory Doctorow coined the term in 2022 to describe how Amazon, Facebook, Google, and TikTok all rot in the same way. The technical version is simple: platforms subsidize one side of the marketplace to grow, then squeeze both sides once they are locked in.
For ecommerce sellers, the pattern always plays out in three stages. First, the platform is generous with reach, low fees, and great support.
Then, once buyers and sellers cannot leave, the platform slowly turns every free feature into a paid one. Finally, the platform maximizes short-term profit until quality collapses and the whole thing stops working.
The three stages of platform enshittification
Every major ecommerce platform I have used moves through the same three stages, in the same order, on roughly the same timeline. Understanding the stages is what lets you predict where a platform is right now and how much runway you have left.
Stage 1: The platform bends over backwards for users
New platforms have no leverage, so they compete on service quality. Amazon FBA in 2010 charged tiny fees, accepted any quantity of inventory with no penalties, and threw in free Prime shipping for your customers.
Amazon warehouses had space, and Amazon actively begged sellers to try the program. It was a private ATM machine for anyone willing to import from Alibaba.
Facebook pages worked the same way. Post something in 2010 and 100 percent of your fans saw it. Building a fan page was the highest-ROI marketing activity on the internet for about three years.
Stage 2: The platform locks in both sides of the marketplace
Once buyers cannot easily leave (huge selection, low prices, generous returns) and sellers cannot leave (that is where the customers are), the platform quietly starts changing the rules. Amazon hit this stage around 2016 when they launched the Dragon Boat program and started aggressively recruiting Chinese sellers directly into US fulfillment centers.
Within three years, Chinese sellers flooded Amazon with dirt-cheap products, blatantly copied US sellers’ listings, gamed reviews, and manipulated rankings with impunity. Amazon did essentially nothing for years because from Amazon’s point of view, one seller being replaced by another is a wash. Amazon takes its cut either way.
Stage 3: The platform maximizes profit and quality collapses
Once a platform is public, the founder rarely controls the roadmap anymore. Shareholders want quarterly earnings growth, and the fastest way to hit those numbers is to raise fees on the side of the marketplace that cannot leave. That is when the fee squeeze accelerates and the service quality drops.
Amazon is deep into this stage now. Ads eat the first two pages of most search results, FBA fees keep climbing, and Prime deliveries regularly miss the promised window. The platform still makes money, but the ecosystem is being drained.
How Amazon FBA fees add up to 45 to 60 percent of revenue in 2024
Amazon FBA fees now consume roughly 45 to 60 percent of a seller’s revenue once you add up the referral fee, fulfillment fee, ad spend, and the newer surcharges. Here is the current stack most sellers are dealing with.
| Fee | Rate | What it covers |
|---|---|---|
| Referral fee | 15% of sale price | Amazon’s cut of every transaction |
| FBA fulfillment fee | 10 to 15% of sale price | Pick, pack, ship, customer service |
| Advertising (PPC) | 20 to 30% of sale price | Sponsored placements to stay visible |
| Inbound placement fee | $0.21 to $6.00 per unit | Distributing inventory to multiple FCs (new in 2024) |
| Low-inventory surcharge | Variable per unit | Penalty for holding too little stock at Amazon |
The inbound placement fee is new for 2024. Amazon now charges 21 cents to 6 dollars per unit just to accept standard and bulky products into the warehouse, which is supposed to reflect the cost of distributing your inventory across their network.
The low-inventory surcharge is the fee that made sellers furious. If you typically sell 1,000 units per month and your stock at Amazon drops to 500 units, Amazon charges you a per-unit fee on the missing 500. You get penalized for holding too much inventory (long-term storage fees) and now you also get penalized for holding too little.
Why Amazon buyers are getting worse products and slower shipping
Amazon’s buyer experience has also decayed measurably in the last few years. This past Christmas, I received fewer than 25 percent of my Prime orders inside the promised delivery window. Prime now costs 139 dollars a year, up from 79 dollars a decade ago.
Amazon also quietly changed some default behaviors that cost you shipping speed. Many product pages now default to a slower delivery option, and some items have minimum-order requirements to unlock free Prime delivery even if you are a paid Prime member. I have accidentally chosen slower shipping this way multiple times.
Product quality has slid too. Roughly 50 percent of top sellers on Amazon are now based in China, and a chunk of them violate trademark and copyright law with no meaningful consequence. One popular repair YouTuber recently tested several sets of 5-amp fuses bought on Amazon and found that none of them actually blew at 5 amps.
How Amazon’s own numbers prove sellers are subsidizing the growth
The clearest evidence that Amazon is in the squeeze stage comes from its own 2023 Q4 earnings. Third-party seller services revenue reached 43.4 billion dollars in the quarter, up 20 percent year over year. Amazon’s online store revenue was only up 9 percent over the same period.
Third-party sellers are growing revenue for Amazon at more than twice the rate of Amazon’s own retail sales. That gap is not because sellers are magically selling more units. It is because Amazon keeps taking a bigger cut of each transaction.
Customer service for sellers has moved in the opposite direction. Ten years ago you could get a real human on the phone at Seller Central. Today the responses are canned templates, and it can take weeks to resolve a suspended listing or an unfair review.
Facebook’s three-strike record: pages, groups, and Messenger
Facebook has run the enshittification playbook on ecommerce sellers three separate times, on three separate features. Each time the pattern was identical: build free reach, get sellers to invest years of effort, then throttle reach and demand payment for what used to be free.
Round one was Facebook pages. I built a large fan page when pages were driving huge referral traffic. Facebook then throttled organic page reach to a few percent of followers and forced page owners to pay to boost posts.
Round two was Facebook groups. Groups filled the void when pages died, and I built a private group of 20,000 users. Facebook then throttled group reach to make room for more ad inventory in the feed.
Round three was Facebook Messenger marketing. Free direct messages to opted-in subscribers were an incredible marketing channel, so I built a large Messenger list. Facebook then shut off the free messaging and started charging per message.
Which platforms are in which stage right now (2024)
Below is my read on where the main ecommerce platforms sit on the enshittification curve as of 2024. Wave riders should look at where a platform is on this list and plan accordingly.
| Platform | Stage | What that means for sellers |
|---|---|---|
| Amazon FBA | Late stage 3 | Fees maxed out, seller support collapsed, buyers frustrated |
| Facebook / Meta ads | Stage 3 | CPMs high, organic reach near zero, targeting weakened |
| eBay | Stage 3 | Fee creep and buyer trust issues |
| Etsy | Late stage 2 | Fees rising, mass-produced Chinese product floods harming artisans |
| Shopify | Stage 2 | Core is solid; app-tax and fee creep growing |
| Google Search | Stage 3 | Ads eating SERP, AI Overviews cutting click-through |
| TikTok Shop | Stage 1 | Wild-west era; subsidized discovery, low seller fees |
| TikTok organic | Stage 1 | Massive free reach still available |
How to protect your ecommerce business from the next platform meltdown
You protect your business from platform enshittification by building on assets you control, and by treating every third-party platform as a distribution channel you will eventually have to replace. That combination is what I call owned marketing, and it is the single biggest strategic shift I have made in the last decade.
Owned marketing is any channel where you personally control the customer list and the delivery mechanism. Email is the clearest example. Once you have a customer’s email address, you can email them as much as you want, and no platform can shut off the connection.
The owned marketing stack that actually survives
Owned marketing assets should be the foundation, and platforms should be the funnel that fills them. My current stack looks like this.
- Your own website (Shopify, WooCommerce, BigCommerce). You own the customer relationship, product data, and checkout flow.
- Email list. Highest-ROI channel, no platform sits between you and the send.
- SMS list. 95 percent-plus open rates, direct to the customer’s phone.
- A blog or content library you host. Feeds SEO and AI search citations independently of any social platform.
- A podcast or YouTube channel. Rented land, but the content library is portable across platforms.
Every platform channel (Amazon, TikTok, Meta ads, Google ads) should exist to funnel customers into one of the owned assets above. If a channel disappears tomorrow, the business survives because the customer list survives.
Ride new waves early, then get off before the crash
Owned marketing is defense. Riding new waves is offense. The best time to be on a platform is stage 1, when the platform is subsidizing your growth because it needs sellers to attract buyers.
TikTok Shop and TikTok organic are in that window right now. Fees are low, discovery is subsidized, and creators still get real free reach. That will not last, so you should be there today, capturing customers into your email and SMS lists while the platform is still generous.
The rule is simple: expect every platform to go to crap eventually, and it will keep you honest about diversifying before the squeeze starts.
Frequently asked questions
What is enshittification?
Enshittification is the predictable decline of a two-sided platform as it moves from serving users, to serving business customers, to serving only shareholders. The term was coined by writer Cory Doctorow in 2022 to describe how Amazon, Facebook, Google, and TikTok all decay in the same way once they lock in both sides of their marketplace.
How much does it cost to sell on Amazon FBA in 2024?
Total Amazon FBA costs typically consume 45 to 60 percent of a seller’s revenue. The stack includes a 15 percent referral fee, a 10 to 15 percent FBA fulfillment fee, 20 to 30 percent for advertising, plus newer surcharges like the inbound placement fee (21 cents to 6 dollars per unit) and the low-inventory surcharge.
What is the Amazon low-inventory surcharge?
The Amazon low-inventory surcharge is a per-unit fee Amazon charges when you carry less inventory in FBA than your recent sales velocity suggests you should. If you typically sell 1,000 units per month and your stock drops to 500, Amazon charges a fee on the 500-unit shortfall, on top of the standard FBA fees.
Is Amazon FBA still worth it?
Amazon FBA is still worth it for many sellers, but the margin is much thinner than it was five years ago, and it is no longer safe to rely on it as your only channel. Most successful Amazon sellers today treat FBA as one channel of several, use it to fund and grow an owned direct-to-consumer store, and capture email and SMS lists at every opportunity.
What is owned marketing and why does it matter?
Owned marketing is any marketing channel or asset that you personally control, with no third-party platform in between you and the customer. Email lists, SMS lists, and your own website are the core examples. It matters because owned channels survive platform algorithm changes, fee hikes, and account bans, which are the failure modes that kill platform-dependent businesses.
Which ecommerce platforms are safest to build on right now?
The safest ecommerce foundation is your own store (Shopify, WooCommerce, or BigCommerce) plus an email list, because you control the customer relationship end to end. Among third-party platforms, TikTok Shop and TikTok organic are currently in the subsidized early stage, which makes them the best places to acquire new customers cheaply before fees rise.
How do I know when a platform is about to enshittify?
The clearest warning signs are rising fees on sellers, more of the SERP or feed being replaced by ads, worse customer support, and heavy recruitment of low-cost sellers who race to the bottom on price. When those signals stack up together and the platform is publicly traded and past the founder-led era, the squeeze is already in motion.
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