What a small seller should know about competing with Amazon

Bizer · 2026-10-01

On 31 August 2026, the FTC and 22 state attorneys general, Louisiana among them, sued Amazon over its advertising auctions. The complaint alleges that for more than seven years Amazon added hidden surcharges to the auctions sellers use to buy sponsored placement, so that advertisers paid more than the rules Amazon described. These are allegations. Amazon has not been found liable, and the case is at its start.

That suit is the third major federal action against Amazon in three years, and it is the one closest to the wallet of a small seller. The old pages at these addresses were about Jeff Bezos's fortune and remarks. Rankings of who is richest move every month and say nothing useful to a seller. The question that lasts is what a small business should do about Amazon, as a rival and as a place to sell.

What has happened, with dates

5 July 2021: Jeff Bezos stepped down as Amazon's chief executive and became executive chair. Andy Jassy took over as CEO.
26 September 2023: the FTC and 17 states sued Amazon, alleging it illegally maintains monopoly power. Among the allegations: that combined fees force many sellers to pay close to 50 percent of their revenue to Amazon. The trial has been moved more than once and, as of October 2026, is set for 2027.
25 September 2025: the FTC announced a $2.5 billion settlement with Amazon over allegations that it enrolled customers in Prime without consent and made cancelling hard.
31 August 2026: the advertising suit above.

None of this changes the fee you pay on your next sale. It does tell you that the cost of selling on Amazon is contested at the highest level, and that you should know your own number exactly.

What does it cost to sell on Amazon?

As listed on Amazon's selling plans page on 1 October 2026:

Individual plan: $0.99 per item sold, no monthly fee.
Professional plan: $39.99 a month, no per-item fee.
Referral fees on every sale, a percentage of the price that varies by category, with a minimum per item.
Fulfillment fees if Amazon stores and ships for you, plus storage fees.
Advertising, which is optional in theory and close to required in practice for a new listing to be seen.

Add these up per product before you list. The number that matters is what lands in your bank account for a single unit after every fee and the ad spend it took to sell it. If you cannot write that number down, you do not yet know whether Amazon is profitable for you.

Should you sell on Amazon?

As one channel, often yes. Amazon says independent sellers account for more than 60 percent of the sales in its store. The customers are there, and for a product people search for by name, nowhere else gets you in front of as many of them.

As your whole business, no. Three reasons:

You do not own the customer. Amazon controls the relationship and limits how you contact buyers. When you stop paying, they stop seeing you.
The rules change without your vote. Fees, policies and search placement move, and a suspended account can halt your sales overnight.
You compete with the landlord. Amazon sells its own products in the same store.

So sell there, and build a way to reach customers that Amazon does not control: your own site, a list of past buyers, a shop counter.

Where can a small seller still win?

Not on price for commodity goods. Do not try. Win where Amazon's model is weak:

Local and same day, in person. Somebody who needs it this afternoon, or wants to see it first.
Expertise. Fitting, advice, installation, repair. Amazon sells the box; you can sell the job done.
Made, customised or rare. Things that are not identical across a hundred listings.
Relationships. A business customer who orders every month from a person they know.

The ecommerce checklist covers making your own store convert, which is the other half of not depending on one marketplace.

What is uncertain

The 2023 antitrust case has not been tried, and the 2026 advertising case has barely begun. Either could change how Amazon charges sellers, or could end in a settlement that changes little. We would not plan around any outcome. Plan around the fees you can see today, and around having somewhere else to sell if they rise.