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Amazon is now taking about a 61% cut of the average FBA seller’s revenue in fees, and the FTC has enough evidence in its landmark antitrust case that a federal judge ruled on October 7, 2024 that the case can proceed toward a potential $44 billion fine and a possible corporate breakup. Amazon’s Q2 2024 net sales rose 10% to $148 billion, but operating income roughly doubled from $7.7 billion to $14.7 billion, and almost all of the profit gain came from fee hikes on sellers and a 19.5% increase in advertising revenue, not from actual ecommerce growth (which was up only 4.6%). Consumers pay the difference through higher prices across the entire internet, because Amazon polices seller prices on other sites and removes the buy box if you undercut Amazon anywhere else.

I break down the Q2 income report, the new FBA fees introduced in 2024, the Prime membership changes that hurt buyers, the FTC case (including Judge John Chun’s October 7 ruling), the “alphabet soup” Chinese-seller tactic, and Amazon’s private-label search bias. This is my read as a seven-figure ecommerce seller who has watched Amazon squeeze the marketplace year after year.

Below we cover Amazon’s 2024 income report and where the profits actually came from, the new FBA fees that pushed the seller take to 61%, the specific Prime and returns changes that made buying worse, why Amazon can get away with all of it (the monopoly argument), and the specific playbook for FBA sellers who want to stay profitable.

Key takeaways

• Amazon Q2 2024 net sales rose 10% to $148 billion, but operating income roughly doubled from $7.7 billion to $14.7 billion. Online store revenue grew only 4.6%, so the real profit growth came from fees and ads, not sales.
• FBA seller fees now consume roughly 61% of the average seller’s revenue, up more than 30% since 2021.
• Amazon introduced three new 2024 fees on FBA sellers: an inbound placement fee, a low-inventory fee, and updated returns processing fees. Sellers get penalized both for holding too little and too much inventory.
• Amazon advertising revenue rose 19.5% year-over-year in Q2 2024. Without ads, most listings do not get shown at all, so this fee is effectively mandatory.
• Amazon Prime is $14.99/month or $180/year in 2024. Delivery has slowed (many non-metro areas no longer get two-day shipping), refunds now take up to 30 days, and Amazon can now deny refund claims after “investigating” reported missing items.
• On October 7, 2024, Judge John Chun ruled the FTC’s antitrust case against Amazon can proceed. Potential outcome includes a $44 billion fine and possible breakup.
• The top 50% of Amazon sellers are now Chinese, with a 25% year-over-year increase in Chinese sellers making over $1 million annually. Many use “alphabet soup” trademarks to flood listings.
• Amazon polices seller prices across the internet with bots. Sell lower anywhere else and Amazon strips your buy box. That is how Amazon indirectly inflates prices on other sites, not just its own.

Where Amazon’s Q2 2024 profits actually came from

Amazon’s Q2 2024 profits nearly doubled year-over-year (from $7.7 billion to $14.7 billion in operating income) even though its online store sales grew only 4.6% (from $53 billion to $55 billion). Almost all of the profit growth came from fee hikes on third-party sellers and advertising revenue, not from actual ecommerce demand.

The two revenue lines that did grow are the ones sellers pay directly. Third-party seller service fees rose 12%, driven by higher FBA charges plus the new fees introduced this year. Advertising revenue grew 19.5%, because without an ad spend most Amazon listings simply do not surface in search anymore.

That is the whole story of Amazon’s 2024 profitability. Sales barely grew. The take rate on sellers grew a lot. Sellers pay the fees. Consumers pay for the fees through slightly higher prices on and off Amazon.

Amazon FBA fees now take 61% of seller revenue

Amazon FBA sellers now pay Amazon about 61% of their revenue in fees on average, up more than 30% since 2021. The 2024 fee round pushed the take rate to a new high and introduced three specific new charges that reshape how sellers plan inventory.

The new 2024 fees are:

• Inbound placement fee. Amazon now charges sellers for the privilege of receiving goods into its warehouses. Whether Amazon spreads inventory across fulfillment centers (fast, expensive) or requires you to ship to one location (slower, cheaper) is now a paid choice.
• Low-inventory fee. Sellers get penalized for keeping too little inventory in stock. The theory is that low-stock listings hurt Amazon’s customer experience, so Amazon charges you to compensate.
• Updated returns processing fee. Amazon now charges sellers a per-item processing fee on returns above category-specific thresholds, in addition to any prior return costs.

Sellers are stuck balancing between the low-inventory fee (for having too little) and the existing long-term storage fee (for having too much). The sweet spot is narrow, and every miss costs money. That is the practical reality of the 61% take rate.

What changed with Amazon Prime in 2024 (and why it feels worse)

Amazon Prime in 2024 costs $14.99 per month or $180 per year, but buyers now get materially worse service than they did two years ago: slower delivery outside major metros, refund processing that can take up to 30 days, and a new adversarial claims process for missing or defective items.

Delivery speed has degraded across the board. Amazon still markets Prime as two-day shipping, but if you live outside a major metropolitan area, many Prime items now arrive in three to seven days or later. My personal Prime deliveries are consistently late during the holidays.

The refund policy also flipped. In the old model, Amazon refunded your money the moment you initiated a return. Now the refund can take up to 30 days to process after Amazon receives the item.

The change that most upsets loyal customers is the “missing item” workflow. Before, if a package arrived short, you clicked a button in the app and Amazon refunded you immediately. Now you have to file a report and wait for Amazon to investigate. Amazon can conclude that no error occurred and deny the refund entirely, leaving you to eat the cost. That is a real quality-of-service downgrade Prime members are paying more each year to receive.

Why the FTC is suing Amazon (and what changed October 7, 2024)

The FTC sued Amazon in September 2023 for illegally maintaining monopoly power through exclusionary practices that stifle competition, inflate prices across the web, and harm both consumers and third-party sellers. On October 7, 2024, Judge John Chun ruled that the FTC’s landmark antitrust case can proceed, a major defeat for Amazon.

The ruling is important for two reasons. First, more evidence from the case leaked as a result. Second, the possible outcome now includes a fine near $44 billion and a potential breakup of Amazon into smaller companies.

The FTC’s core argument is that Amazon controls sellers in ways no other platform can. Amazon accounts for more than 50% of U.S. ecommerce, over 200 million Americans (roughly 70% of U.S. households) are Prime members, and Prime buyers overwhelmingly buy from listings with the Prime badge. That combination gives Amazon coercive leverage over any third-party brand that needs to reach a mass U.S. audience.

The two specific control mechanisms are the buy box and the prime badge. If Amazon does not award you the buy box, your sales collapse. If your listing loses the Prime badge, Prime buyers filter you out. Amazon uses both as leverage to enforce off-platform price policing.

How Amazon inflates prices across the entire internet

Amazon inflates prices on other websites by monitoring third-party sellers’ prices across the internet with automated bots and stripping the buy box from any listing that undercuts Amazon anywhere else. Since most sellers depend on Amazon for 80% to 90% of their sales, they inflate their prices on their own Shopify sites and elsewhere to match Amazon and avoid retaliation.

That is how Amazon can look like the lowest-price site on the internet while functionally being one of the highest-fee marketplaces. Amazon does not have the lowest prices on merit. It has the lowest prices because it forces sellers to raise prices everywhere else.

The FTC argues that this is textbook artificial price inflation to maintain monopoly power. In a normal competitive market, a company that raised its take rate to 61% and let service quality drop would lose customers to competitors. Amazon’s control over the buy box, the Prime badge, and its bot-driven price surveillance prevents that market correction from happening.

How Chinese sellers and “alphabet soup” brands make everything worse

Chinese sellers now make up about the top 50% of Amazon third-party sellers, with a 25% year-over-year increase in Chinese sellers doing over $1 million annually, and many of them use an “alphabet soup” strategy of trademarking random letter strings (JHKLQ, XYZMN) and selling the same product under dozens of listings to corner category search results.

Because these sellers operate overseas, they can violate Amazon terms of service (incentivized reviews, copying competitors’ products, trademark abuse) with relatively little consequence. When Amazon shuts one down, five new ones open under different alphabet-soup trademarks.

Amazon has finally started enforcing some of these policies against Chinese sellers, but only after the FTC lawsuit created the political pressure to do so. That timing is not a coincidence. Amazon tolerated the chaos for years because the chaos helped Amazon.

Bad-actor sellers are useful to Amazon strategically. They keep prices low, they keep legitimate sellers on the defensive, and they give Amazon leverage to say “if you leave, five others will take your place.” That is what a monopoly with an unlimited supply of expendable sellers looks like.

Amazon’s private-label bias in search results

The FTC alleges that Amazon biases its own search results in favor of Amazon’s private-label brands (Amazon Basics, Solimo, and dozens of others), even when it knows third-party sellers offer higher-quality items. That bias shows up directly on competing sellers’ listings.

A friend of mine sells a niche home product on Amazon and Amazon runs a competing private-label copy at 33% off directly on her listing page. The Amazon private label sits above her buy box, at a lower price, with the Amazon Basics halo. Competing with that as a small brand is close to impossible.

The private-label bias is the endgame of Amazon’s leverage. Amazon watches which third-party products sell well, launches a private-label copy, prices it below the seller, and then uses its own search-result bias to push the private label to shoppers first. That is the entire “Amazon steals your product” playbook the FTC is now formally investigating.

What Amazon FBA sellers should do right now

FBA sellers should treat Amazon as one channel among several, not as the whole business. Concrete steps: build a direct-to-consumer Shopify presence (even a low-effort one), start an email list, invest in your own brand name so you are not competing on generic SEO alone, and stop optimizing purely for Amazon rankings that Amazon can strip at any moment.

Specifically:

• Build a Shopify or WooCommerce store under your brand name, even if it only does 5% to 10% of your Amazon volume in year one. That store is your escape hatch and your margin recapture channel.
• Start an email list at the checkout of both stores. Email is the only channel Amazon cannot take from you.
• Register your brand under Amazon Brand Registry if you have not already, to protect against private-label copies and alphabet-soup imitators.
• Diversify off Amazon over 18 to 24 months. Aim to get your Amazon share of revenue below 60% so a single Amazon policy change cannot end your business.
• Model the 61% take rate honestly. Many sellers still price as if fees are 40%. If yours are truly 61%, either your prices are too low or your margin structure needs to change.

Amazon is not going away, and selling on Amazon still works if you know what you are doing. But treating Amazon as the entire business in 2025 is the mistake that catches sellers out when the next fee round drops or the FTC case ends in a settlement.

Frequently asked questions

Is Amazon a monopoly?

The FTC formally accused Amazon of illegally maintaining monopoly power in September 2023, and on October 7, 2024, Judge John Chun ruled the case can proceed. Amazon accounts for over 50% of U.S. ecommerce, and over 200 million Americans (about 70% of U.S. households) are Prime members. Whether Amazon is legally a monopoly is now the question a federal court will decide, with a potential $44 billion fine and possible breakup as remedies.

How much do Amazon FBA fees actually cost sellers in 2024?

Amazon FBA fees now take approximately 61% of the average seller’s revenue, up more than 30% since 2021. That includes fulfillment fees, referral fees, storage fees, and the three new 2024 charges: inbound placement fees, low-inventory fees, and updated returns processing fees. Ad spend, which is now practically required for visibility, is on top of that 61%.

What new Amazon fees came out in 2024?

Three new Amazon fees launched or expanded in 2024: an inbound placement fee (for receiving your goods into Amazon’s warehouses), a low-inventory fee (penalizing sellers who keep too little stock), and updated returns processing fees. These come on top of existing storage fees for holding too much inventory, so sellers are squeezed on both sides of their inventory range.

Why does Amazon Prime feel worse in 2024?

Amazon Prime in 2024 costs $14.99 per month or $180 per year, but service has degraded across three areas: many non-metro U.S. addresses no longer get true two-day shipping, refunds can now take up to 30 days to process after Amazon receives a returned item, and Amazon can now investigate and deny “missing item” claims that used to trigger an instant refund. All three changes are documented in Amazon’s current help pages.

How does Amazon inflate prices on other websites?

Amazon runs bots that continuously monitor sellers’ prices across other websites. If a seller lists a product for less on Shopify, eBay, Walmart, or their own site than on Amazon, Amazon can remove their Amazon buy box or their Prime badge. Since most sellers get 80% to 90% of their sales from Amazon, they raise their prices on other sites to match Amazon, which inflates prices across the entire internet, not just on Amazon.

What are “alphabet soup” Amazon sellers?

“Alphabet soup” Amazon sellers are typically Chinese-owned brands that trademark random-looking strings of letters (like JHKLQ or XYZMN) and sell the same product under dozens of near-duplicate listings to corner search results in a category. This tactic exploits Amazon’s Brand Registry system and floods listings with essentially identical products, pushing legitimate sellers off page one.

Should you still sell on Amazon FBA in 2025?

Yes, but treat Amazon as one channel among several, not the entire business. Sellers who diversify into a Shopify store, an email list, and their own brand name typically make more profit than sellers who put 100% of their revenue on Amazon, because they have leverage when Amazon raises fees, changes policies, or launches a private-label copy of their product. Aim to keep Amazon under 60% of revenue over 18 to 24 months.

Ready To Get Serious About Starting An Online Business?

If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

Podcast: Download (Duration: 43:12 — 49.7MB)

You need a side hustle in 2025 because a single paycheck is now the single point of failure for your household finances. AI, automation, and cheap remote labor are quietly hollowing out both blue-collar and white-collar jobs, and the people I know who feel safest right now are the ones who already have a second stream of income running on the side. The bar to start one has never been lower, and the cost of ignoring it has never been higher.

This episode is a conversation with my longtime co-host Toni Herrbach about why the side hustle has moved from optional to essential, plus the specific low-cost hustles regular people in her family and mine are running today. We cover why AI is different from every previous wave of job displacement, the exact Instagram-only playbook Toni’s daughter-in-law used to build a weekend dog-grooming business, why word of mouth still beats paid ads in the service space, and how a side hustle grows into a full business or a saleable asset over time.

If you have been thinking “I probably need something on the side,” this post is the answer to what and how.

Key takeaways

• Relying on one job in 2025 is high-risk. AI is displacing coders, retail workers, and support staff at the same time, and construction and skilled trades are the only categories that still look reasonably safe.
• The cheapest, fastest side hustles today are service-based and run entirely off Instagram or a Facebook page. No website required to start.
• Word-of-mouth referrals still beat paid ads for service side hustles. Post before-and-after photos, get tagged by happy customers, and let organic sharing do the marketing.
• Recurring-revenue plans (monthly dog grooming, monthly trail rides) are the fastest way to turn a random gig into a real income stream.
• Everyone has time. Most people who claim they do not have time to build a side hustle are spending hours a day on YouTube, TikTok, or streaming.
• The real payoff comes when you monetize the knowledge behind the hustle. Franchise it, sell a course, or sell the business.

Why you need a side hustle in 2025

You need a side hustle in 2025 because job security has stopped being a category that exists in most industries. Toni and I both spent the last two years watching friends in tech, retail, and administrative work get replaced by software or by cheaper remote labor, and neither of us thinks the trend reverses. A second income stream is the practical way to spread the risk.

Here in Silicon Valley, computer science graduates are having real trouble finding jobs because AI can now write production code. In my own business, I no longer hire writers, and I code most of what I need myself with an AI assistant. One engineer can genuinely do the work of five, which sounds great until you realize the other four are the ones losing their jobs.

The retail side is moving just as fast. Airports and grocery stores are rolling out self-checkout, robotic coffee makers, and unmanned snack bars. Amazon’s “just walk out” stores were partially staffed by roughly 1,000 remote reviewers in India before Amazon quietly wound the technology down in 2024. The pattern is the same everywhere: fewer humans on the floor, more cameras and automation behind the scenes.

Which jobs are safest from AI and automation

The jobs safest from AI and automation right now are skilled trades, in-person hospitality where warmth is the product, and personalized service work. Anything that requires a body, a tool, and physical presence on site is hard to automate. Anything where the customer specifically wants to be seen and treated well by a human still commands a premium.

Chick-fil-A is the clearest example of the second category. Their drive-through lines back up city planning because customers will wait for the two people in the brightly colored vests who ask your name and hand you your food with a smile. McDonald’s replaced most of that job with a kiosk, and you can feel the difference the moment you walk in.

Blue-collar work is not immune to change, but it is far more insulated. Roofers, plumbers, electricians, and remodelers still need to be on site, and the labor pool has been shrinking for a decade. A skilled trade is one of the more durable bets you can make in 2025.

How to pick a side hustle that fits your life

The best side hustle to pick is one that leverages something you already know, love, or have professional experience with, so the learning curve is short and the work does not feel like a second job. Toni’s daughter-in-law is a hospital procurement officer during the week and a dog groomer on the weekends because she genuinely loves animals. My daughter is building a print-on-demand course because she has been running an entrepreneurship club at her high school.

Three filters worth applying before you commit:

• Skill or interest match. If you already do it, teach it, or love it, you will not burn out in month three.
• Low start-up cost. Under $500 for tools and setup is a reasonable ceiling for a first hustle. You want the ability to walk away.
• Path to more. Ideally the hustle can grow into recurring income, a business you can hire out, or knowledge you can eventually package and sell.

If you cannot think of anything, start by listing what your friends already ask you for help with. Referrals are the earliest signal that a skill has market value.

The best side hustles to start in 2025

The best side hustles to start in 2025 are service-based businesses run off social media, monetized skills you already have from a day job, and small e-commerce or digital product stores that can be launched from a laptop. All three have a low cost of entry and a real path to full-time income.

Here are the specific hustles Toni and I recommend based on what is actually working for people in our lives right now.

Pet grooming and pet sitting

Pet grooming and pet sitting is one of the strongest weekend side hustles in 2025 because pet ownership is high, owners are willing to pay for convenience, and word of mouth spreads fast. Toni’s daughter-in-law runs her entire grooming business off a single Instagram account. She posts before-and-after photos, accepts bookings by DM, and puts every client on a monthly grooming plan for recurring income.

The American Pet Products Association estimates U.S. pet industry spending at roughly $150 billion a year, with grooming and boarding among the fastest-growing segments. You do not need a storefront to enter. A grooming license, a starter kit, and a phone are enough to begin.

Christmas light installation and seasonal services

Christmas light installation is a seasonal side hustle that few homeowners want to do themselves and that scales into a real business over time. Toni drove past a trailer the other day advertising exactly this service, which is a signal that the model is working locally. Hang lights for six weeks a year, price by linear foot, and you can gross meaningful money in a short window.

The same logic applies to gutter cleaning, pressure washing, leaf removal, and holiday decorating. All of them are physical, seasonal, and hated by most homeowners.

Delivery driving that grows into a fleet

Delivery driving for Amazon, FedEx, or Instacart is a common entry-level side hustle, but the real move is buying your own truck and turning it into a small logistics business. My first employee at Bumblebee Linens started delivering for Amazon at night while working for us. He saved, bought his own truck, and today he owns a small delivery fleet running routes for Amazon and other clients.

The Amazon Delivery Service Partner program specifically funds this path. It has clear entry requirements and a documented playbook for going from single driver to fleet owner.

Monetizing your day-job expertise

If you have 10 or more years in one industry, monetizing that expertise as coaching, courses, or consulting is one of the highest-margin side hustles you can start. Our friend Kelly Snyder built Adore Your Wardrobe teaching women how to dress for their body shape after years in the apparel industry. She now earns more than most of the Nordstrom administrators she used to work alongside.

The pattern works because your day-job knowledge is genuinely rare to the customer. What is obvious to you is a mystery to them, and they will pay to skip the learning curve.

Print on demand and digital products

Print on demand is one of the cheapest ways for a teenager, a stay-at-home parent, or anyone with a laptop to start selling online in 2025. There is no inventory, no shipping, and no upfront cost per design. You upload artwork, list it on a platform like Printful, Printify, or a Shopify store, and the print partner handles fulfillment when an order comes in.

My daughter is building a print-on-demand course right now from her bedroom with a laptop, a phone camera, and a $50 microphone. The class is going through her high school entrepreneurship club first as beta students, then she will sell it publicly.

Instagram-only ecommerce

You can now run a functional ecommerce business entirely off Instagram if you have a strong visual product and a following in your niche. My nephews work at an exotic plant nursery that posts pictures of rare plants with a note like “we have 16 of these” and sells the entire batch inside five minutes. That single channel roughly doubled the nursery’s revenue.

Instagram Shopping, checkout by DM, and the ability to link a Shopify catalog into your feed make this viable without a website. The catch is that you need product photos people want to save and share.

How to market a service side hustle without a website

The fastest way to market a service side hustle in 2025 is a single dedicated Instagram or Facebook page, before-and-after photos of every job, and a DM-only booking flow. That is exactly what Toni’s daughter-in-law does, and she has never spent a dollar on advertising.

Three tactics do most of the work:

1. Post before-and-after photos of every job. Tag the client. When they re-share, their friends see it and comment “who groomed your dog?”
2. Get discoverable on local search. Instagram now surfaces posts by location, so tagging your city or neighborhood puts you in front of local buyers automatically.
3. Book by DM. Skip the website. A conversation in Instagram messages converts higher than a booking form.

Instagram Broadcast Channels are worth adding once you have a base. Subscribers get one broadcast a day, which is effectively a poor person’s email list, and open rates on it are far higher than email in 2025.

Why recurring revenue turns a side hustle into a business

Recurring revenue is what turns a side hustle from a series of one-off gigs into a predictable business you can plan around. Toni’s daughter-in-law puts every grooming client on a monthly plan, so income arrives whether or not she books new clients that week. Her brother’s ranch does the same with monthly trail-ride memberships, giving customers a discount in exchange for filling empty ride slots midweek.

The math is simple. Ten monthly clients at $100 each is $1,000 a month you can count on, and it is far easier to sell one recurring plan than to chase 40 individual bookings.

Any service that customers need again on a schedule is a candidate. Lawn care, cleaning, grooming, pool service, and pest control all fit. Ask for the recurring commitment on the first job, not the fifth.

How to build word-of-mouth referrals fast

The fastest way to build word-of-mouth referrals is to publicly demonstrate expertise in the communities your customers already hang out in, without ever pitching your services. Grayson Bell built a full WordPress-repair business by answering technical questions in blogger Facebook groups for free. He never once said “and by the way, I do this for hire.” After a year, whenever anyone in those groups asked for a WordPress fix, 16 commenters would tag Grayson.

Carson Chow did the same for Shopify design inside the ECF community. When newcomers asked who designed their store, the answer was always Carson. Both built six-figure businesses on two rails: free public expertise, and referrals from happy customers.

The rule is that you have to give away the answer, not the pitch. Prove you know the thing. The business comes to you.

How much time do you really need for a side hustle

You need about five to ten hours a week to make real progress on a side hustle, and almost everyone has that time hidden inside their week if they audit where it goes. I asked my daughter why she had not filmed her next course video, and she told me she had no time. I pulled the traffic log off our home router, saw several hours a day of YouTube, and had my answer.

I am not immune to it either. I waste plenty of time every day. The point is that time is a priority problem, not a supply problem.

A useful exercise: write down every hour you spend on entertainment or scrolling for one week. Cut half of it, and put those hours into the hustle. Most people find eight to ten reclaimable hours inside seven days.

How side hustles grow into businesses you can sell

Every serious side hustle has a monetization path beyond your hourly rate, and the highest-value move is usually productizing your knowledge or building an asset you can eventually sell. Kelly Snyder turned apparel-industry expertise into a course. My delivery-driver former employee turned one truck into a fleet. The septic-tank owner who is currently digging up my yard drives a $170,000 pickup because he sold the labor part of his job to employees years ago.

Bumblebee Linens started with a goal of earning $50,000 a year to replace my wife’s salary, and it turned into far more. This blog started as a side project to cover the mortgage, and it did the same. The key move both times was starting, then compounding, then reinvesting.

If you own the business, the customer list, and the brand, you own something you can eventually sell. If you only own the hours you personally work, you own a job.

Frequently asked questions

Do I really need a side hustle in 2025?

If your household relies on a single paycheck, yes. AI, automation, and offshoring are hitting both white-collar and blue-collar jobs at the same time, and having a second income stream is the practical way to spread the risk. A side hustle also builds skills, an audience, and optionality your day job does not.

What is the cheapest side hustle to start in 2025?

The cheapest side hustles to start in 2025 are service-based gigs marketed off a free Instagram or Facebook page, like dog walking, cleaning, tutoring, hair braiding, or lawn care. Total start-up cost can be under $100 if you already own a phone and basic tools.

Can I run a side hustle without a website?

Yes. Many service side hustles in 2025 run entirely off a dedicated Instagram or Facebook page, taking bookings by DM. You should still register a domain and set up a simple landing page once the business has recurring clients, but it is not required to start.

How much money can a side hustle realistically make?

A part-time service side hustle running five to ten hours a week can realistically clear $500 to $2,000 a month within the first year. Recurring plans and word-of-mouth referrals are the two biggest drivers of how fast that number grows. The ceiling is much higher for hustles that scale into fleets, franchises, or productized knowledge.

Which side hustles are safest from AI displacement?

Side hustles safest from AI displacement are ones that require physical presence, human warmth, or in-person expertise. Skilled trades, pet grooming, home services, in-person coaching, and hospitality all fit. Purely digital hustles that produce generic writing, code, or graphics are the most exposed.

How do I find time for a side hustle with a full-time job and family?

Audit where your time goes for one week using screen-time reports, then reclaim two to three hours a day from entertainment and social media. Most people find eight to ten hours a week that way, which is enough to grow a hustle steadily. Working in tight one-hour blocks after the kids go to bed is more productive than trying to find a free weekend.

What is the best side hustle for a teenager?

The best side hustles for a teenager in 2025 are print-on-demand, tutoring, pet sitting, hair or makeup services, lawn care, and social media management for local businesses. All are low-cost, teach real business skills, and can fit around school hours.

Ready To Get Serious About Starting An Online Business?

If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!

Podcast: Download (Duration: 13:03 — 15.2MB)

The new US crackdown on the de minimis rule effectively kills China dropshipping within about 18 months. Three changes matter: every China-origin package now owes customs duties and Section 301, 232, or 201 tariffs regardless of value; the seller must now collect the buyer’s Social Security number to claim the de minimis exemption on that buyer’s behalf; and every shipment must file an electronic certificate of compliance with US safety regulations at time of entry. None of those requirements survive contact with a real dropshipping customer buying a $10 mouth guard.

I break the whole thing down in this solo episode. If you are already running a Shopify or WooCommerce store fulfilled by AliExpress, DSers, CJ Dropshipping, or AutoDS, this post explains exactly what changed, why the economics no longer work, and what to do instead. If you are just thinking about starting a dropshipping business, reconsider.

Below is the full explainer plus what still works, what does not, and the path forward.

Key takeaways

• The de minimis rule (packages under $800 entering the US duty-free) is being narrowed to exclude Chinese e-commerce shipments. That was the entire cost advantage of AliExpress dropshipping.
• All China dropshipping shipments will now owe Section 301, 232, or 201 tariffs plus normal customs duties, no matter the package value. Section 301 alone covers roughly 40% of Chinese imports.
• Sellers must now collect the buyer’s Social Security number to file the de minimis exemption on the buyer’s behalf. Almost no US customer will hand that over for a cheap online order.
• Every consumer-goods import must file an electronic certificate of compliance with US safety regulations at entry. The buyer becomes the importer of record and legally responsible for that filing.
• Timing is roughly 18 months for full enforcement based on industry consensus. The rules do not switch on overnight because of the paperwork volume.
• Domestic US dropshipping and AliExpress fulfillment from US warehouses are not affected. Only cross-border shipments from China to US buyers are.
• The long-term move for anyone starting an online business is to build a real brand with your own products, not to resell $2 junk from China.

What is China dropshipping and why did it work

China dropshipping is a business model where a seller lists products from AliExpress or a similar Chinese supplier on their own Shopify or WooCommerce store, and when a US customer orders, the Chinese supplier ships the item directly to that customer. The seller never touches the product and never holds inventory. The model worked because three economic advantages stacked on top of each other.

The first advantage was raw price arbitrage. That snoring mouth guard I mentioned in the episode sells for $39.99 on Amazon and costs $1.72 on AliExpress, a 23x markup. Almost any consumer good sourced from a Chinese factory carries similar spreads.

The second advantage was cheap shipping. The ePacket program, launched in 2011 to promote US-China ecommerce, priced a 1-pound parcel from China to the US at roughly $1 to $1.50. Domestic US shipping for the same weight costs several times that.

The third advantage was the de minimis exemption. Any package entering the US worth $800 or less passed through customs duty-free and tariff-free. Stack cheap product, cheap shipping, and zero import taxes together, and you have the economics that made AliExpress dropshipping a viral side hustle for a decade.

What is the de minimis rule and why did the US change it

The de minimis rule is a US customs provision that lets any package worth $800 or less enter the country without paying customs duties or tariffs. It was designed to save Customs and Border Protection from processing paperwork on low-value personal shipments like a $30 toy from another country. The current administration is changing it because Chinese e-commerce platforms have used it to ship billions of dollars a year in commercial merchandise into the US duty-free.

Temu and Shein are the two biggest examples. Temu launched in 2022 and by 2024 had expanded to 79 countries and captured roughly a third of Amazon’s US web traffic. Amazon’s apparel sales fell about 30% year over year as Temu and Shein took share, with virtually every Temu and Shein order arriving in the US duty-free under de minimis.

Customs and Border Protection processed more than a billion de minimis shipments in fiscal 2023, up from roughly 140 million a decade earlier. The rule was written for a smaller trade era and is now the single biggest loophole in US import law.

What are the three de minimis rule changes killing China dropshipping

There are three changes to the de minimis rule that together kill the China dropshipping model. Each one on its own would hurt margins. Stacked together, they make the business unworkable.

Change 1: All China shipments now owe tariffs and duties

The first change requires every package containing goods covered by Section 301, 232, or 201 of US trade law to pay full tariffs and customs duties, regardless of the shipment’s value. In practice that means the de minimis exemption no longer applies to most Chinese-made consumer goods entering the US.

Section 301 targets electronics, textiles, and machinery, and covers roughly 40% of all Chinese imports. Section 232 covers steel, aluminum, and related materials. Section 201 covers products like solar panels and washing machines.

Most dropshipped consumer goods fall under Section 301, so if you sell phone accessories, apparel, home goods, or gadgets from a Chinese supplier, expect your landed cost to jump. Doubling the cost still leaves headroom on a 23x-markup product, but the next two changes are where the model actually breaks.

Change 2: You must collect the buyer’s Social Security number

The second change requires the seller to collect and submit the buyer’s identifying information, including the buyer’s Social Security number, to claim the de minimis exemption on that buyer’s behalf. Commercial importers use an Employer Identification Number for entry filings. Individuals importing for personal use are identified by their SSN.

Because dropshipping treats each customer as the individual importer of record, that means asking your Shopify customer for a Social Security number at checkout to complete a $12 order. Nobody is going to hand over their SSN to buy a phone case from an unfamiliar store, especially one that is obviously fulfilling from China. Identity theft is already at historic levels in the US, and consumers are hyper-aware of Chinese data collection.

This change alone would end the model, and the third one seals it.

Change 3: Certificates of compliance are required at entry

The third change requires every consumer-goods shipment to file an electronic certificate of compliance with US safety regulations at time of entry. The certificate confirms the product meets applicable Consumer Product Safety Commission, FDA, or other regulatory standards for its category.

The reason this rule exists is that a huge share of what ships out of AliExpress and Temu fails US safety standards. AliExpress phone chargers are almost universally not UL certified, which is why lithium-battery fires linked to cheap Chinese electronics have been a recurring story since the hoverboard recalls. Temu has been repeatedly flagged for children’s toys containing unsafe levels of lead and phthalates. Shein has faced regulatory action for clothing containing formaldehyde and azo dyes, and for cosmetics containing mercury.

Under the new rules, the buyer becomes the importer of record and is legally responsible for filing the compliance certificate. No US consumer is going to accept legal liability for the safety compliance of a $10 phone case from a random Shopify store.

When do the new de minimis rules take effect

Full enforcement of the new de minimis rules is expected in roughly 18 months based on industry consensus. The changes cannot switch on overnight because Customs and Border Protection has to build the electronic filing infrastructure, and enforcing immediately would back up US ports of entry for years.

The direction of travel is not in question. Enforcement will phase in as the paperwork systems come online, and by the time it is fully live, the AliExpress and CJ Dropshipping model will not clear economically.

If you are running a China dropshipping store today, treat 18 months as the runway to migrate off the model. If you are still in the planning stage, do not start one.

Which dropshipping models still work under the new rules

The dropshipping models that still work under the new US rules are domestic US dropshipping, AliExpress or CJ Dropshipping orders fulfilled from US warehouses, and print on demand with US-based print partners. Anything that ships cross-border from China to a US customer under the de minimis exemption is what the new rules target.

| Model | Still viable | Why |
|—|—|—|
| Direct China-to-US dropshipping (AliExpress, CJ, DSers direct) | No | Loses de minimis, requires SSN and compliance filing |
| AliExpress or CJ with US-warehouse fulfillment | Yes | Enters US as commercial import, seller is importer of record |
| Print on demand (Printful, Printify, US printers) | Yes | Printed and shipped domestically |
| Domestic dropshipping from US suppliers | Yes | Never crossed a border in the first place |
| Private-label ecommerce (import in bulk, hold inventory) | Yes | Standard commercial import; you own the brand |

The private-label model is the one I recommend for anyone building a real online business. You import product in bulk, pay tariffs and duties upfront, hold inventory, and sell under your own brand. The margins are lower per unit than fake-margin dropshipping, but the business is durable and worth something when you sell it.

What sellers should do right now

Right now, sellers with an active China dropshipping business should start migrating suppliers to US warehouses, testing private-label alternatives, and preserving cash for the transition. Do not wait for enforcement to hit before making the move. Below is the practical sequence.

1. Audit your current SKUs. Identify which products fall under Section 301, 232, or 201 tariffs and estimate the landed-cost jump when duties apply. Kill anything that will no longer clear a reasonable margin.
2. Ask suppliers about US warehousing. Many AliExpress and CJ Dropshipping suppliers now stock inventory in US 3PL warehouses. Fulfilling from there sidesteps the border entirely.
3. Test print on demand for graphic-driven categories. Apparel, mugs, and posters can move to Printful or Printify without touching your product catalog structure.
4. Start sourcing for private label. Pick your two best-selling categories and negotiate bulk orders from the same Chinese factories that were fulfilling your dropshipping orders. You pay tariffs once on the bulk import, then sell under your own brand.
5. Build an email list and a real brand. Cheap-junk dropshipping stores have no repeat customers. Owning the customer relationship is what makes the pivot worth it.

Dropshipping was always a tough long-term business because you had no control over product quality, shipping speed, or brand. Every serious ecommerce operator I have interviewed on this podcast who started with dropshipping eventually moved on. Even the CEO of Spocket admitted as much when he came on the show.

Frequently asked questions

What is the de minimis rule for US imports?

The de minimis rule allows any single shipment entering the United States worth $800 or less to enter duty-free and tariff-free. It was created to spare Customs from processing low-value personal packages. Chinese e-commerce platforms have used it to ship billions of dollars a year of commercial goods into the US duty-free.

Is China dropshipping dead in 2025?

China dropshipping is on a roughly 18-month runway to becoming economically unviable under the new de minimis rule changes. Duties and tariffs will apply to virtually all shipments, sellers must collect buyer Social Security numbers to claim any exemption, and every shipment needs a filed certificate of compliance. If you dropship from China direct to US customers, migrate now.

Does the de minimis change affect all dropshipping?

No. The de minimis change targets cross-border shipments from China to US customers. Domestic US dropshipping, AliExpress or CJ Dropshipping orders fulfilled from US warehouses, and print on demand with US printers are unaffected.

Will Temu and Shein still work in the US?

Temu and Shein will keep operating but their prices will rise as they lose the de minimis exemption on direct-from-China shipments. Both are already building US warehouses to fulfill domestically, which lets them keep some price advantage but forfeits the duty-free entry that made them viral. Their headline price gap versus Amazon will narrow.

What can I sell instead of China dropshipping?

The most durable alternative is a private-label ecommerce business, where you import your own product in bulk from a factory, pay the tariffs and duties once, and sell under your own brand at higher margin with real repeat customers. Print on demand and domestic dropshipping also work as lower-margin starting points.

What is a certificate of compliance in customs?

A certificate of compliance is an electronic filing that confirms an imported consumer product meets applicable US safety regulations from the Consumer Product Safety Commission, FDA, or other regulators. Under the new de minimis rules, every consumer-goods shipment must include one at time of entry, and the importer of record is legally responsible for its accuracy.

How long do I have before the new rules take effect?

Industry consensus is roughly 18 months for full enforcement, though phased implementation may hit certain categories sooner. Customs needs to build the electronic filing systems and phase in the paperwork volume. Treat the runway as short and plan the migration off China-direct dropshipping now.

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The de minimis crackdown announced by the Biden administration on September 13, 2024 removes the tariff-free import loophole that let Temu and Shein undercut US sellers on price, and it does so in three ways at once. First, products covered by Section 301, 232, or 201 tariffs no longer qualify for the $800 de minimis exemption, which affects roughly 70 percent of what Temu and Shein sell into the US.

Second, sellers now must supply a 10-digit tariff classification and the buyer’s identifying information (potentially a Social Security number) for every de minimis shipment. Third, all consumer-good importers must file a certificate of compliance with US safety regulations at time of entry, closing the loophole that let unsafe children’s toys, chargers, cosmetics, and textiles slip through untested.

For US ecommerce sellers, this is the biggest structural leveling of the playing field with Chinese direct-to-consumer platforms in a decade. Temu was already losing an average of $30 per US order, PDD Holdings just lost about $55 billion of market cap in a single day, and Temu suppliers are staging sit-ins in Guangzhou over unpaid balances. Rule changes that push retail prices up will accelerate all three trends.

Below I walk through the three advantages Temu leveraged to dominate US ecommerce, why every one of them has now collapsed, exactly what changed in the de minimis rules, and what US sellers should expect over the next 12 to 24 months.

Key takeaways

• Temu was losing about $30 per US order and roughly $588 to $954 million per year, subsidized by PDD Holdings, which has a market cap near $179 billion.
• PDD stock dropped over 28 percent in one day (about $55 billion of market cap) after missing quarterly revenue estimates and a bearish outlook.
• The de minimis change removes tariff-free entry for goods covered by Section 301, 232, or 201, which together cover about 70 percent of Temu and Shein’s US-sold catalog.
• Sellers now must file a 10-digit HTS code and buyer identifying information (Social Security number or EIN) for every low-value shipment claiming de minimis.
• All consumer goods must arrive with an electronically filed certificate of compliance, blocking untested items that violate US safety regulations.
• Temu suppliers held a sit-in in Guangzhou; one seller reported roughly 2 million yuan (about $276,000) in payments frozen by Temu.
• Effectiveness depends on enforcement, and full CBP operational rollout will likely take 12 to 24 months.

What is the de minimis rule and why did Temu depend on it?

The de minimis rule allowed any shipment valued at $800 or less to enter the United States free of import duties and tariffs, which let Temu and Shein ship packages direct from Chinese factories to US buyers without paying the tariffs a US-based importer would pay. That single exemption is what made a $5 t-shirt or a $12 phone case possible at Temu prices. Every US ecommerce brand importing full container loads has been paying Section 301 tariffs (often 7.5 percent to 25 percent) on the same goods.

The threshold was raised from $200 to $800 in 2016 to speed up small package customs. Chinese direct-to-consumer platforms then built entire business models on top of it, splitting inventory into individual $10 to $30 parcels and shipping them one at a time to US buyers.

The volume grew fast. US Customs and Border Protection processed roughly 1 billion de minimis shipments in fiscal 2023, more than three times the volume in 2019.

The three advantages that let Temu dominate US ecommerce

Temu’s US dominance rested on three specific structural advantages, and every one of them has now weakened or disappeared. Understanding each one is the fastest way to see why the new rules are so damaging in combination.

• A billion-dollar sugar daddy. PDD Holdings (Pinduoduo), Temu’s parent, has a market cap near $179 billion and used it to subsidize aggressive US pricing.
• A desperate seller base. Slower Chinese domestic ecommerce demand pushed thousands of Chinese manufacturers onto Temu at whatever margin the platform demanded.
• The de minimis loophole. Sub-$800 shipments avoided tariffs entirely, giving Temu a structural 10 to 25 percent price advantage over any US importer.

Why PDD Holdings can no longer subsidize Temu

PDD Holdings can no longer bankroll Temu’s losses because its own business is deteriorating fast. In August 2024, PDD grossly missed quarterly revenue estimates and Chinese executives gave pessimistic remarks about domestic ecommerce and PDD’s global outlook. The stock dropped over 28 percent in a single day, marking the largest one-day decline in company history and erasing about $55 billion in market cap.

Temu’s own unit economics are ugly. Wired reported that Temu was losing about $30 per US order, and China Merchants Securities estimated total US losses at $588 million to $954 million per year.

The influencer spend has visibly dried up too. I used to receive constant sponsored-content requests from Temu; over the past few months the activity has stopped almost entirely. Whether they run a Super Bowl ad again in 2026 will be the next real signal.

Why Temu’s Chinese sellers are revolting

Temu’s Chinese sellers are staging sit-ins because Temu’s price-squeeze model has left them unable to make a profit and frequently unable to withdraw their earnings. Hundreds of Temu suppliers recently demonstrated at a Temu-affiliated office in Guangzhou over unfair fines and withheld payments. One household-goods seller reported about 2 million yuan (roughly $276,000) in completed-sale proceeds that Temu had frozen.

The mechanic is punishing by design. Temu regularly demands sellers lower their prices, and if the seller refuses, Temu simply removes the product from the marketplace. If the seller agrees, Temu often lowers the price without disclosing the new number in advance, leaving the seller to discover it after the fact.

China tech analyst Ivy Yang of Wavelet Strategy has said the discontent has been brewing for a while and has finally reached a tipping point. When the underlying supplier base breaks, catalog quality and fulfillment reliability go with it.

What changed in the new de minimis rules (September 13, 2024)

The Biden administration’s September 13, 2024 announcement introduces three specific changes to how de minimis shipments enter the United States, and each one hits Temu and Shein’s model directly. Together they close the loophole for the categories those platforms rely on and add compliance friction to every remaining shipment.

Change 1: Section 301, 232, and 201 tariff goods lose the exemption

Any product subject to Section 301, 232, or 201 tariffs is now excluded from the $800 de minimis exemption, so those shipments owe both customs duties and full tariff rates regardless of parcel size. Section 301 tariffs cover electronics, textiles, and machinery; Section 232 covers steel, aluminum, and related materials; Section 201 covers solar panels and washing machines. Together those categories represent about 40 percent of total US imports from China and roughly 70 percent of what Temu and Shein sell into the US.

Prices on affected items will move to full-tariff-inclusive levels overnight once enforcement is in effect. The 10 to 25 percent effective price increase on most Temu and Shein SKUs erases most of the platform’s headline price advantage over Amazon, Walmart, and US direct-to-consumer brands.

Change 2: Stricter information collection on every de minimis shipment

Every low-value shipment claiming the de minimis exemption must now include a 10-digit HTS tariff classification number and buyer identifying information, which lets US Customs and Border Protection flag or duty items that should not have qualified. When goods are imported for personal use above certain thresholds, the buyer normally provides a Social Security number or EIN. Under the new rules, that requirement can flow through to individual Temu and Shein customers.

Almost no US consumer will hand a Chinese ecommerce app their Social Security number to save $3 on a t-shirt. Existing paranoia about Chinese data collection alone will kill conversion the day the field appears.

If the US chooses to enforce this rule aggressively, it functionally shuts down direct-to-consumer parcel flow from Temu and Shein to US buyers on any covered item.

Change 3: Certificates of compliance required at entry

All importers of consumer goods must now electronically file a certificate of compliance at time of entry, even for de minimis shipments, closing the loophole that let Chinese platforms ship products that failed US safety regulations. The Consumer Product Safety Commission gains real ability to block non-compliant items. This is the change that directly targets the safety-scandal categories Temu and Shein have gotten away with for years.

Concrete examples the rule targets:

• Children’s toys shipped with unsafe levels of lead, phthalates, and other harmful chemicals.
• Counterfeit phone chargers and power banks without mandatory UL certification, creating fire and shock risk.
• Shein-sold textiles and clothing containing formaldehyde or azo dyes linked to skin and allergic reactions.
• Cosmetics containing mercury or hydroquinone with documented long-term toxicity risk.
• Children’s apparel and cribs failing US flammability and choking hazard tests.

Consumers who buy uncertified items may themselves be asked to file a certificate of compliance. In practice, almost nobody will do that, which functionally blocks the item.

Temu and Shein price impact: how much will bargains actually rise?

Expected price impact on Temu and Shein US listings is roughly 10 to 25 percent on affected SKUs once the tariff exemption is removed, with additional friction from the new documentation and safety-certification requirements. That range mirrors the underlying Section 301 tariff rates that will now apply. On lowest-margin items (apparel, home goods, small electronics), the increase is often the whole difference between “half of Amazon” and “same as Amazon.”

The knock-on effect is even larger than the sticker price move. Once Temu is no longer meaningfully cheaper than Amazon, its core value proposition (“shop like a billionaire”) disappears and the platform reverts to a slow-shipping Chinese marketplace with an unfamiliar brand.

Shein faces the same math with worse category exposure. Apparel is entirely inside the affected tariff categories.

What this means for US ecommerce sellers

US ecommerce sellers gain the biggest structural pricing tailwind in a decade because the tariff arbitrage that let Chinese direct-to-consumer platforms undercut them is going away. If you sell any category with meaningful Temu or Shein competition (small home goods, apparel, phone accessories, kitchen gadgets, kids items), you should expect measurable share recapture over the next 12 to 24 months as enforcement ramps up.

Concrete actions to consider now:

• Audit your top-selling SKUs for Temu and Shein listings. Note the current price gap. Model what happens to Temu’s price at plus 15 to 25 percent.
• Refresh product photography, listing copy, and reviews on Amazon, Shopify, and Walmart. Buyers migrating away from Temu will search on their most familiar platforms first.
• Lean into US safety compliance in your marketing. CPSC-tested, UL-listed, and FDA-registered claims mean more the moment consumers realize Temu was skipping them.
• Consider raising prices modestly on any SKU where you have been under-earning to match Temu. Recovered margin funds ad spend and inventory.

How fast will the new de minimis rules actually take effect?

Effective enforcement of the new de minimis rules will likely take 12 to 24 months to reach steady state because CBP has to update systems, issue final regulations, and staff for the increased inspection workload. The September 13, 2024 announcement was a proposed regulatory change, and the formal rulemaking process (notice, comment, final rule, and effective date) typically runs 6 to 18 months on its own. Serious enforcement follows that.

I still expect early aggressive enforcement to set an example. Regulators typically pursue high-visibility actions in the first 6 to 12 months of a new rule to establish precedent, and Temu is the highest-visibility target imaginable.

Sellers should not assume slow rollout means no impact. Even the threat of enforcement plus voluntary compliance from major carriers has already moved prices in some Temu categories.

Frequently asked questions

What is the de minimis rule?

The de minimis rule is a US customs provision that allowed shipments valued at $800 or less to enter the country free of duties and tariffs. It was designed to speed up small package customs but became the loophole Chinese direct-to-consumer platforms used to ship tariff-free to US buyers.

Will Temu prices go up because of the new de minimis rules?

Yes. Temu prices on tariff-affected goods will rise by roughly 10 to 25 percent once the new de minimis rules are enforced, because Section 301, 232, and 201 tariffs will now apply to those shipments. Roughly 70 percent of Temu’s US-sold catalog falls in the affected categories.

Will I have to give Temu my Social Security number?

Under the new rules, buyers of items above certain personal-use thresholds may need to provide a Social Security number or EIN to claim the de minimis exemption. Almost no US consumer is expected to hand a Chinese app their Social Security number, so the practical effect is that affected items will simply carry duties and tariffs like normal imports.

Are Temu products actually unsafe?

Regulators and independent testers have found multiple categories of unsafe Temu and Shein products, including children’s toys with elevated lead and phthalate levels, uncertified phone chargers and power banks with fire risk, and textiles containing formaldehyde and azo dyes. The new certificate of compliance requirement is designed to keep those items out of the US market.

Is Shein affected by the same de minimis rules?

Yes. Shein is affected by the same de minimis changes as Temu, and its apparel-heavy catalog falls almost entirely inside the Section 301 tariff categories that now lose the exemption. The tariff exposure on Shein is arguably greater than on Temu.

Will US ecommerce sellers benefit from the de minimis crackdown?

US ecommerce sellers will benefit because the crackdown removes a 10 to 25 percent structural price advantage that Temu and Shein have enjoyed for years. Sellers competing in the same categories should expect share recapture on Amazon, Shopify, and Walmart over the next 12 to 24 months.

When will the new rules actually take effect?

The September 13, 2024 announcement kicked off a formal rulemaking process that typically runs 6 to 18 months before final rules take effect, with full operational enforcement likely taking 12 to 24 months. Early high-visibility enforcement actions are likely once the rules are final.

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You can grow Black Friday and Cyber Monday sales without slashing your prices by stacking a waitlist launch, a loyalty-point event, bundles, free-with-purchase gifts, and daily flash sales with real scarcity. In this episode of the My Wife Quit Her Job podcast, Toni Herrbach and I walk through the exact BFCM playbook we run in our own stores (Bumblebee Linens for me, The Happy Homeschool for Toni) so you protect your margins instead of racing competitors to the bottom.

The math is brutal on discounting. If you sell at 50% margin, a 20% off sale means you have to sell roughly twice as many units just to break even on gross profit. So we keep our biggest discount at 15% and lean on offers that feel bigger to customers than they actually cost us.

Below is the full framework: how long your promotion should run, how to warm the list up, how to structure the waitlist, and the specific daily emails we send from mid-November through Cyber Monday.

Key takeaways

• Never discount more than you have to. A 20% off sale at 50% margin forces you to double unit sales just to hold your gross profit flat.
• Run the promotion 12 to 14 days, not two weeks of teasers. Teasing too early trains customers to pause spending until the sale starts.
• Launch a new product or run a challenge in the first week of November so people who need to buy that month still have a reason.
• A one-day waitlist coupon (stacked on top of the sitewide discount) is our single biggest revenue day of the year.
• Use a loyalty program as a “1% discount that feels like 20%”: bonus-point days, half-price rewards, and outright point bonuses.
• Free-with-purchase and bundles boost AOV and let you liquidate slow-moving SKUs without touching the sticker price.
• Dial down Facebook ads in October and November of election years. CPMs commonly run 2x to 4x normal on top-of-funnel campaigns.

Why deep Black Friday discounts destroy profit

Deep Black Friday discounts destroy profit because a small percentage off the price is a huge percentage off your gross margin. If your product costs $10 and sells for $20 (a 50% margin), a 20% off promotion drops your revenue per unit from $20 to $16 and your gross margin from $10 to $6. You now need to sell roughly 1.67 units for every one unit you used to sell just to keep gross profit flat.

At 30% off, that break-even multiplier jumps to about 2.5 units. This is why we cap our biggest promotion at 15% at Bumblebee Linens and lean on offer structures that feel bigger than they cost.

How long should your Black Friday promotion run?

Twelve to fourteen days is the sweet spot for most stores, running from the Wednesday or Thursday before Thanksgiving through the Saturday after Cyber Monday. Big-box retailers now stretch “Black Friday” through the entire month of November, and Walmart drops its holiday catalog before Halloween, but small brands do not need to match that.

A shorter, more concentrated window keeps the sale from cannibalizing full-price sales in early November. Two weeks is long enough to hit every segment of your list with multiple emails without the message going stale.

I am not a fan of teasing the sale two weeks before it begins. When you announce “big Black Friday deals coming in 14 days,” you train your customers to hold off on every purchase they were about to make at full price, and pre-sale revenue tanks.

What to sell in the first two weeks of November

Give people who need to buy in early November a reason to buy from you at full or near-full price, so you do not lose those sales while waiting for Black Friday. There are three plays that work well.

1. Launch a new product the first week of November. We have done this for two years in a row. Launch pricing gets set at whatever the Black Friday discount will be, and we tell customers directly, “This is the best price this product will ever be. You will not see it lower on Black Friday.”

2. Run a five-day themed challenge. Pick a topic customers care about, send five daily emails on that topic, go live on Facebook, and put related products on a small discount during the challenge window. This works when you do not have a new product to launch.

3. Sell a genuinely limited-edition November-only product. Size the run based on the last three years of November order volume, so you can actually sell out and market the scarcity honestly. A holiday-themed tote bag or seasonal design works for almost any category.

Why a loyalty program beats a sitewide discount

A loyalty program is functionally about a 1% discount, but it feels to customers like a much bigger reward. That is why loyalty is the core of my BFCM strategy at Bumblebee Linens instead of deep sitewide markdowns.

The specific levers I run during Black Friday week are double-points days, half-price rewards (customers redeem their points for twice the usual value), and outright bonus-point drops for existing members. Every one of those becomes an excuse to send another email.

Each email adds another chance to make a sale without touching the price a first-time visitor sees. New shoppers still get the sitewide 15% off; loyalty members feel like they are getting something extra.

How to run a Black Friday waitlist that stacks on top of your sale

The waitlist is our single biggest revenue day of the entire year, and it works by giving list members one 24-hour window with an extra discount on top of the regular Black Friday sale. If sitewide is 20% off, waitlist members get an additional 10% off on the first day only.

Toni has been running this for three years at The Happy Homeschool and increases the stacked discount by five percentage points each year. Here is the exact five-email sequence.

Email 1 (three weeks out): “Black Friday is coming. We are doing something we have never done before. Get on the waitlist to know exactly when the one-day discount starts.” Use a click-to-tag in Klaviyo so subscribers do not have to opt in again.

Email 2 (five to six days later): Sent only to people not yet on the waitlist. Add a free-with-purchase gift that day only (something you already need to liquidate from the warehouse).

Email 3 (resend to unopens): Same content as email one or two, new subject line, sent to the segment that never opened the previous email.

Email 4 (48 hours before the sale, text-only): A short two-sentence personal-style email. “Hey Steve, tomorrow you get 35% off. You are not on the waitlist and you will not get the coupon. Click here and I will email it to you.” Even this two-sentence email consistently makes real money.

Email 5 (waitlist day, 6am): “Here is your coupon. Live until midnight.” Follow at 2pm with a reminder to unopens who have not purchased.

How to use free-with-purchase to raise AOV without discounting

Free-with-purchase moves the needle because a $3 gift feels bigger to the customer than a 10% discount, and it costs you less than the equivalent markdown. If your average order is $100, a 10% discount costs you $10 in margin; a $3 free gift costs you $3.

Set a purchase threshold that pushes AOV up ($50 or $100, depending on your price point). Make the free item something that only exists during this window, so it has “collect it or miss it” pull.

Beauty brands like Clinique run this play with limited-edition makeup bags every holiday season and it works because the bag itself is never available for sale. Any brand can do the same thing with a seasonal tote, holiday-themed accessory, or overstock SKU.

How to bundle products to boost average order value

Bundles let you raise the ticket size and quietly move slow-moving inventory at the same time. We create gift packs during BFCM that are only offered during the sale, price them higher than any single item, and stuff them with SKUs we want out of the warehouse.

Customers feel like they are getting more product for their money. In reality, the perceived value is high and our unit-level margin on the bundle is often better than the individual items would be at their sale price. Think of the pre-made stockings at drugstores in December: cheap toys in a stocking with a “Look at everything you get for $19.99” label.

How to refresh product photography for the holiday season

Reshoot your best sellers in holiday settings so customers who did not think they needed the product suddenly picture it in their home. A napkin ring on a bare table is a commodity; the same napkin ring on a fully-set Christmas table with evergreen, red plates, and glassware is a gift.

You can do a lot of this with AI now. Upload a real product photo to Midjourney or a similar tool and prompt it to set a Christmas table or stage the product in a seasonal scene.

For anything you sell (glassware, barware, table runners, home goods), the holiday-reframed shot becomes the hero image on the product page and the header of every BFCM email. That single change often lifts click-through without any price movement.

How to run daily flash sales with scarcity-based coupon codes

Flash sales keep sales alive on the “dead” days in the middle of BFCM (Monday through Wednesday before Thanksgiving, when families are traveling), using coupon codes with hard, limited-quantity caps. This is Toni’s signature Cyber Week play at The Happy Homeschool.

The email lists five coupons, each with a cap:

• Free shipping (first 10 orders)
• $10 off your order (first 25 orders)
• $5 off your order (first 25 orders)
• Buy one, get one free (first 30 orders)
• 10% off your order (first 25 orders)

Customers click through and race to try codes until they find one that still has quantity left. It creates urgency without touching the sitewide price, and it teaches you (via the back end) which offer type moves your specific audience the most.

For The Happy Homeschool the winner is consistently free shipping and dollar-off coupons; buy-one-get-one barely moves the needle. For Bumblebee Linens, small dollar-off coupons attract low-margin customers and percentage-off coupons attract the AOV we actually want.

How to segment the flash-sale email for maximum lift

Send the limited-coupon email to three distinct segments and treat them as separate campaigns. The revenue-per-recipient numbers tell you where the offer is really working.

Segment 1: Everyone who has not purchased yet this Black Friday. This produces the biggest raw revenue number because it is the largest audience.

Segment 2: One-time buyers who have not purchased in six months. This is the highest-performing segment on a per-recipient basis. It reactivates lapsed customers with a low-friction reason to click.

Segment 3: Subscribers who have never purchased. This email consistently converts more never-buyers than any other campaign we run.

Should you dial down Facebook ads on Black Friday?

Yes, dial down Facebook ad spend in November of an election year, and consider dialing it down every November regardless. CPMs and CPCs on Meta commonly run 2x to 4x their normal level in October and November of election years because political advertisers flood the auction.

Ads that break even in a normal month can bleed cash in an election-year November. Google search ads are usually less affected because search intent is stable; Meta and other social platforms take the biggest hit.

We start dialing Meta spend down in September of election years and shift budget toward email (which has near-zero incremental cost) and toward retargeting only the warmest segments.

How to use live video to sell during Black Friday

Going live on Facebook or your own site during BFCM does three things at once: it becomes another excuse to send an email, it legitimizes your business to shoppers who have never bought from you, and (when you run ads to the live) it produces cheaper impressions than a standard video ad.

If you do not want to be on camera, film the warehouse. Show orders being packed, bundles being assembled, and the shipping team working. That is the same social-proof pattern that makes TikTok Shop convert so well: real people, real physical product, real fulfillment.

Pair the live with a ManyChat flow that watches for a keyword in the comments. When someone comments “hanky,” the bot DMs them a product link and a coupon code. That turns passive viewers into a segmented list you can email again.

Frequently asked questions

What is the highest Black Friday discount you should offer?

Cap your biggest sitewide discount at 15% to 20% if you sell at typical 50% gross margins. Anything deeper forces you to sell dramatically more units just to hold gross profit flat, and it trains customers to wait for the sale next year.

How long should a Black Friday sale run?

Twelve to fourteen days is the sweet spot for most ecommerce stores, starting the Wednesday or Thursday before Thanksgiving and ending the Saturday after Cyber Monday. That is enough time to email every segment without the message going stale and without teasing customers so early that pre-sale revenue collapses.

Do Black Friday waitlists actually work?

Yes. A one-day waitlist coupon stacked on top of the sitewide sale is consistently the highest single-day revenue driver of our year. The key is giving list members a real reason to sign up (an extra 10% off on top of the sale) and delivering the coupon in a short, text-only email at 6am on the promised day.

How much can a loyalty program replace discounting on Black Friday?

A well-run loyalty program (double-points days, half-price rewards, bonus-point drops) functions as roughly a 1% discount that feels like a 20% reward to members. It cannot fully replace a sitewide sale because new visitors do not have any points, but it can shift a large share of holiday revenue from discount-driven to reward-driven.

What should I sell in November before Black Friday starts?

Launch a new product the first week of November at what will become the Black Friday price, run a themed five-day challenge, or drop a genuinely limited-edition November-only SKU. Any of the three gives early-November shoppers a reason to buy from you at full price rather than wait.

Does free-with-purchase work better than a discount?

Free-with-purchase almost always beats an equivalent-cost discount because a $3 gift with a $30 perceived value feels bigger than a 10% coupon. It also lets you liquidate overstock and creates a “collect it while it lasts” seasonal hook that percentage-off coupons cannot match.

Should I run Facebook ads during Black Friday in an election year?

Dial Meta spend down starting in September of an election year because CPMs commonly hit 2x to 4x normal. Keep Google search ads running (search intent is stable), and shift the freed budget into email, SMS, and retargeting your warmest audiences.

What is the biggest Black Friday mistake ecommerce sellers make?

Racing competitors to the deepest discount and destroying gross profit for the whole holiday quarter. The stores that win Black Friday are the ones that grow revenue through offer structure (waitlists, bundles, free gifts, loyalty rewards, flash-sale scarcity) rather than through a bigger percent-off number.

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You turn first-time ecommerce buyers into repeat customers by running a loyalty program that behaves like a 1% discount but feels like a 20% reward, layered with a post-purchase email flow that reintroduces the program two weeks after the first order. In this episode of the My Wife Quit Her Job podcast, Toni Herrbach and I break down the exact loyalty structure we run in our stores (Bumblebee Linens for me, The Happy Homeschool for Toni), including point values, VIP tiers, redemption thresholds, and the Klaviyo flows that turn point balances into a second, third, and fourth purchase.

Repeat customers already drive between 36% and 50% of our revenue. That number climbs when a loyalty program gives us another reason to email without discounting the sticker price a first-time visitor sees.

Below is the full playbook: how many points to award for which actions, when to trigger a “you have $5 to spend” flow, how to run a triple-points event so it lifts your entire email account, and when in your business it actually makes sense to sign up.

Key takeaways

• A loyalty program is functionally a 1% to 3% discount, but psychologically it feels far bigger and drives repeat purchases without touching the sticker price.
• Award 3 points per $1 spent, 250 points for a product review, 500 points for a birthday, and 200 points for signup. Reward the actions you want more of.
• Redemption rates run 7% to 10% on average. Unclaimed points are pure margin, like unredeemed gift cards.
• Trigger a “congratulations, you have $5” Klaviyo flow the moment a customer hits 500 points. That flow can hit 70% open rate and 11% click-through.
• Introduce the program in a post-purchase email two weeks after delivery. New-member versions of this email hit ~10% click-through.
• Run triple-points events two to three times a year. Even when they do not spike revenue, they lift open and click rates across your entire email program.
• Sign up for a paid plan (Smile.io, Yotpo, etc.) once you hit roughly 1,000 monthly orders, or sooner if paid ads are your primary acquisition channel.

Why a loyalty program is the best way to earn repeat customers

A loyalty program earns repeat customers because it behaves like a 1% to 3% discount, but psychologically feels like a much bigger reward, and every point balance becomes another reason to email. Redemption rates run between 7% and 10% at most stores, which means most of the points you award are never redeemed. That gap is pure margin.

The two levers that consistently drive repeat purchases without cutting price are loyalty points and free-with-purchase gifts. Both let you feel generous to the customer without giving up gross profit like a 20% off sale would.

Airline miles, hotel points, and coffee-shop apps prove the psychology. A 1% cash-back rate at Starbird chicken changes where I choose to eat lunch, even though the actual dollar value is tiny.

How much does a loyalty program cost for an ecommerce store?

Most stores on Shopify or BigCommerce will use a third-party app, and the practical price range is $49 to $1,000 per month depending on tier and features. Smile.io starts at $49/month for the base plan, jumps to about $200/month for the mid-tier where the interesting features live, and $1,000/month for the Plus plan.

Start on the $49 tier if your store is doing anywhere from six figures to low seven figures a year. Every store I know that runs even the base tier makes back the $49 many times over from the extra emails alone.

Do not start on the $1,000 Plus plan just because it has cool features. Those features only pay for themselves once you are running weekly loyalty campaigns to an engaged list, which is not where you are on day one.

What actions should a loyalty program award points for?

Award points for every action you want customers to take more often, weighted by how much you value each one. Here is the point structure I recommend based on what we run at The Happy Homeschool.

• 3 points per $1 spent (translates to roughly a 3% cash-back rate at 100 points = $1 redemption)
• 200 points for signup (turns email opt-in into a low-friction “you already have $2 waiting” hook)
• 250 points for a product review (high value because reviews compound over years)
• 500 points for a birthday (customer gives you a segmentable date; you get another annual email trigger)
• 50 points per social share (Facebook, Instagram)
• 500+ points for user-generated video content (the highest-value asset most brands are starved for)

The point-per-dollar rate is the only number you have to get right for your margin. Everything else is a knob you can turn based on what you need more of this quarter.

How to structure loyalty program VIP tiers

Add a VIP tier that unlocks after the second purchase, because statistics consistently show a customer who has bought twice is likely to become a long-term repeat buyer. That single threshold does more work than a five-tier system does at most small brands.

The tier-two benefit should be a real bump: 2x reward points on every subsequent order. That is a benefit worth chasing without costing you meaningful margin (2x of a 3% cash-back rate is still just 6%).

Setting the tier requirement at “two purchases” rather than “500 points” prevents customers from creating throwaway accounts to farm signup and review bonuses. Marriott, Hyatt, and every airline prove the point: status tiers change where people book.

How to introduce the loyalty program in your post-purchase email flow

Introduce the loyalty program in a dedicated post-purchase email that lands roughly two weeks after delivery, split into two versions (one for members with zero points, one for members who already have some). The 14-day timing matters because the customer has the product in hand, has probably used it, and has forgotten about you.

The zero-points version explains the program from scratch: how to earn, what points are worth, what actions get the biggest boost. This version hits about a 10% click-through rate at The Happy Homeschool because most recipients are learning about the program for the first time.

The existing-member version reminds them of their current balance and nudges the next action (“Only 100 points from your next $5 reward”). It runs about a 50% open rate and near-4% click-through.

How to trigger a “you have $5 to spend” reward flow in Klaviyo

Trigger a celebratory Klaviyo flow the exact moment a customer’s point balance hits your lowest redemption threshold (500 points = $5 at our standard rate). Toni borrowed this pattern from Chubbies, the men’s swimwear brand, and it consistently outperforms almost every other automated flow in her account.

Email 1 (immediate): Fireworks, confetti, “Congratulations, you have $5 to spend.” 70% open rate. 11% click-through. 0.6% order rate.

Email 2 (7 days later): A share-with-a-friend nudge ($5 for you, $5 for them). Lower engagement, higher revenue per person.

Email 3 (14 days later): Subject line “Have you checked your balance lately?” 60% open rate. 10% click-through.

The whole flow triggers when the Klaviyo profile property “points balance” hits 500. Set it once and it runs forever.

How to run a triple-points event for maximum email engagement

Run a triple-points earning event for a 24-hour window two to three times a year, and send it only to segments that already have points (a signal of engagement). This does two things at once: it drives repeat purchases from existing customers, and it lifts your open and click rates across your entire email program.

At The Happy Homeschool, one of Toni’s triple-points events during the summer back-to-school sale sent only to point-holders. It hit strong per-recipient revenue despite going to under 20,000 people.

The real win was the follow-up email 24 hours later, sent only to the roughly 500 people who purchased during the triple-points window. Subject line: “You just earned all these points, spend them while things are still on sale.” Result: 71% open rate. 20% click-through rate.

That single email dragged the sending domain’s engagement metrics up for the rest of the campaign. Even the revenue-per-send was modest ($481 from 500 recipients), the deliverability lift compounded across every other email that week.

How to stack a loyalty reward with a sitewide sale and a free gift

Stack three things in one email to point-holding customers during a big sale: the sitewide discount, triple loyalty points, and a free-with-purchase gift. This is Toni’s highest-converting sale-email template.

The psychology matches how humans actually shop. Give a busy customer one offer and they weigh it against their to-do list. Give them three offers, and they feel the compounding value (“I would be leaving money on the table if I did not buy”).

The free-with-purchase item should be something you need to liquidate from the warehouse (perceived value $25 to $35, actual cost to you $1 to $3). Toni cleared an entire slow-moving SKU with this exact stack in a single week.

What redemption threshold moves the most customers?

The $5-off redemption is consistently the most-used reward, followed closely by $10 off, at stores that offer both. At The Happy Homeschool, the $5 coupon is the top redemption; $10 is second (customers wait to build up); the free digital product (a $10-perceived-value Bible study) is a distant third.

The lesson: keep your lowest threshold reachable after the first or second order. A 500-point threshold at 3 points per $1 hits after roughly $167 in spend, which is well within most customers’ second purchase.

Do not let the first order redeem the signup bonus alone. Require the second order for the first redemption, so the reward system reinforces the behavior you actually want (repeat purchases), not just email signups.

How to use a loyalty program to collect user-generated content

Award outsized point bonuses (500 to 1,000 points) for customer video testimonials and photos, because user-generated content is one of the highest-leverage assets in ecommerce and it is chronically undersupplied at most brands. Short-form video especially compounds across TikTok, Instagram Reels, YouTube Shorts, and your own product pages.

Set explicit hooks in the loyalty page: “Upload a photo of you holding the product: 500 points. Upload a video review: 1,000 points.” The point value should feel absurdly generous, because most customers will never take the action, and the ones who do are giving you a permanent marketing asset.

Product reviews often do not need extra incentive because they arrive organically. Reserve the biggest point bonuses for the assets you cannot generate any other way.

When should you sign up for a paid loyalty program?

Sign up for a paid loyalty app once you hit roughly 1,000 monthly orders, or sooner if paid ads are your primary customer acquisition channel. The order threshold matters more than the revenue threshold because 1,000 orders means you have around 800 to 1,000 distinct customers to enroll in a given month.

If you are spending $10 or more to acquire each customer through Meta or Google ads, sign up sooner. Every dollar you spend making a customer come back is a dollar you do not have to spend acquiring a new one.

The one non-negotiable: have your email templates and campaign calendar ready to go before you enable the paid plan. Loyalty programs die when brands sign up, dump the widget on the site, and never mention it in another email.

How to display point balances in every email you send

Drop the Klaviyo merge tag for point balance at the very top of every marketing email you send, right below the header. When a customer opens a Black Friday email and sees “You have 780 points” (worth $7.80 off), it materially raises purchase probability without changing the offer.

Segment your list into “has points” and “has zero points” and send a different top-of-email block to each. The zero-points version is a short paragraph explaining how to earn (avoids showing an ugly “null” balance and turns the empty spot into an acquisition moment).

Every major loyalty app (Smile.io, Yotpo, LoyaltyLion) exposes point balance as a Klaviyo profile property. Set the merge tag once in your header block and it flows through every campaign automatically.

Frequently asked questions

What is the average redemption rate for ecommerce loyalty programs?

Ecommerce loyalty programs typically see 7% to 10% redemption rates on earned points. That means 90% of the points you award are never redeemed, which is why the effective cost of a loyalty program is far lower than the headline point-back rate suggests.

How much does a loyalty program cost per month?

Most third-party loyalty apps start at about $49/month for the base plan and scale to $200/month for mid-tier features and $1,000/month for enterprise tiers. Smile.io is the most widely-used option on Shopify; Yotpo and LoyaltyLion sit in similar price ranges.

What is a good point-per-dollar rate for a loyalty program?

Three points per $1 spent, with 100 points equaling $1 in rewards, is a solid default (roughly a 3% cash-back rate). Higher-margin categories can offer up to 10% back; lower-margin categories should stay closer to 1%.

Should loyalty points expire?

Expiring points create urgency but risk alienating customers who feel punished for not redeeming fast enough. Most successful programs (including The Happy Homeschool) keep points permanent and use expiring bonus points for time-limited campaigns instead.

Can you allow customers to redeem points on their first order?

You can, but requiring the second order for the first redemption reinforces the repeat-purchase behavior you actually want. If you already give a signup bonus (say 200 points = $2), gating that first redemption to order two makes the program a repeat-purchase driver, not an acquisition discount.

How do you get customers to redeem loyalty points?

Trigger an automated Klaviyo flow the moment a customer hits your lowest redemption threshold, then follow up 7 and 14 days later. That three-email sequence at The Happy Homeschool consistently produces 60%+ open rates and 10%+ click-through rates.

Do loyalty programs work for stores that do not get repeat purchases?

Loyalty programs still add value even in one-and-done categories (wedding, mattress, hot tub) because point balances make every marketing email more engaging and unlock referral mechanics. Adjust the point structure to reward shares, reviews, and referrals rather than repeat purchases.

How many revenue points come from repeat customers vs new customers?

Existing customers typically drive 30% to 50% of total ecommerce revenue at healthy stores. At Bumblebee Linens (wedding, mostly one-and-done) repeat customers are about 36%; at The Happy Homeschool (homeschool curriculum, high LTV) they are about 50%.

Ready To Get Serious About Starting An Online Business?

If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's absolutely free!