On April 2, some Amazon sellers got an email that many saw as a breaking point. Starting April 15, Amazon said, their advertising costs would be deducted from their retail proceeds first, with a credit or debit card used only as a backup if those proceeds fell short.
For sellers already contending with delayed payouts and new fees, the change felt like the last straw.
Under the old setup, sellers could pay for advertising on a credit card, collect points, and benefit from the extra time before the bill came due. Under the new approach, ad costs would come out of proceeds first, reducing float and tightening cash flow.
Ad spend is one of the biggest expenses for many sellers, said Eugene Khayman, founder of Million Dollar Sellers, a network of more than 800 e-commerce founders doing nearly $15 billion in annual Amazon revenue.
“When you’re getting 4% cash back on your third-largest expense in the business, ads, you can live off of that,” he told Business Insider. “You can pay an extra person a salary. You can invest more in the business.”
Amazon later announced it would delay the change to ad payments until August 1, 2026. The company also offered sellers a $2,500 promotional ad credit, Khayman said.
In a statement to Business Insider, Amazon said:
“We are committed to supporting the success of selling partners in our store and continue to help them achieve record sales year after year. We invest heavily in powerful tools, services, and programs to enable their business growth at a cost that is typically lower than alternatives. The recent changes to advertising payment methods and reserve settings align a small subset of sellers with standard practices already used by an overwhelming majority of our selling partners.”
‘Death by a thousand cuts’
Khayman said the April email circulated quickly through the MDS community because it followed several other changes in a short period.
“A lot of people were very frustrated because it’s like the fourth change they made in a matter of a month.”
Among the most consequential recent changes, Khayman cited three in particular: Amazon delaying when sellers receive their money, a 3.5% fuel and logistics-related surcharge, and the ads payment change.
Amazon’s DD+7 (delivery date + 7 days) policy, which holds seller payments for seven days after an order is delivered, creates a cash-flow problem, said Aaron Biner, founder of Little Jupiter, a kids’ brand that sells plush toys and arts and crafts.
“If Amazon’s paying you slower, you’re going to think twice before you launch a new product or think about adding more styles or different colors onto a product,” Biner said. “Because you’ve got to support each one of those with solid cash flow financials.”
That is just one of several pressures sellers say they are facing.
Biner said he tracked 16 fee increases, added fees, or lost perks between 2021 and the change that’s slated for August 2026.
“During that same period, there were 10 small positive changes for sellers,” he said, classifying most of them as “give-backs, to soften the blow of the negative changes.”
For years, selling on Amazon has felt like “death by a thousand cuts,” he said. He compared avoiding extra fees to navigating a fast car down a narrow lane. “There is almost no room for error.”
Alex Yale, who runs the cleaning product brand Uncle Todd’s, said the pressure is not coming from a single source.
“It feels like a continuous, almost a multi-front margin squeeze and not just like a single policy change,” Yale said. Each new fee or policy change may be survivable on its own, but “if you look at the compounding effect on these already thin margins, that becomes a very dangerous proposition.”
The frustration culminated in an April 15 ad boycott, in which some sellers paused Amazon advertising for a day to get the company’s attention.
Rethinking life beyond Amazon
The answer to tighter margins is not as simple as raising prices.
“If I go from $10 to $11.50 to offset my increase in costs, am I then going to be the most expensive option, or a more expensive option, and thus lose conversion rate on Amazon? Am I going to lose sales velocity? Am I going to lose ranking on the Amazon page?” Yale said. “The answer is probably yes.”
Biner offered a concrete example. One of his plush toys, which sold for roughly $16.99 to $17.99 in 2019, now sells for $23.49, but the higher price has not solved the problem.
“As we’ve increased the prices, we’ve sold fewer units, and we’ve made less money,” he said.
Some sellers, including Rich Tesoriero, who sells floral handbags, are trying to become less dependent on Amazon. He’s an Amazon veteran, having sold on the platform since 2008, but recently, it’s become exhausting to manage.
“Amazon has become, for me, sort of this whack-a-mole,” he said. “You solve one problem, another one pops up.”
Tesoriero said he is increasingly focused on building outside Amazon. About 20% of his revenue came from Shopify last year; in the first quarter of 2026, he said, that figure rose to 35%.
Biner added that many sellers are also experimenting with channels like TikTok.
“When you feel like a business isn’t hearing you, loud and clear, like Amazon, that pushes a lot of people to try to innovate their business,” Biner said. “Necessity is the mother of invention.”
‘Amazon is a frenemy’
For all their complaints, the sellers Business Insider spoke with were careful to say they are not anti-Amazon. Many still rely heavily on the platform, and several credited it with helping them build successful businesses.
Tesoriero, a former engineer who now runs his e-commerce business full-time with his wife, put it simply: “Amazon is a frenemy.”
“My greatest successes and frustrations come from Amazon,” he said.
For sellers who can adapt, Amazon’s tougher environment may present an opportunity.
“It is an exciting time in a way because we hear that the number of sellers is going down,” Tesoriero said. “And so the people who have the operational skill, this is an opportunity to grow their business. I’m still optimistic.”
To survive, many sellers lean on communities like MDS, which members described as a kind of collective brain.
“In this community, we don’t really have a union,” Biner said. “It’s the closest thing we have to a group voice.”
For sellers who feel increasingly squeezed, that kind of shared knowledge may be becoming almost as essential as Amazon itself.
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