Amazon Sellers stay one step ahead with our insightful newsletter - 'Unlock Your Success.' Every week
Share
Amazon News: AI Backlash, FBA Visibility Issues & Big Tariff Shifts Hitting Sellers
Published 3 months ago • 9 min read
This Week's Top Amazon Seller News
Hey Reader,
This week’s edition dives into mounting legal pressure on Amazon, growing tension around AI shopping agents, visibility issues inside FBA, and major shifts in social commerce and global regulation. Several of these stories directly affect discoverability, trust, and compliance — so this is one to read closely. Join us live today at 12 PM Eastern / 9 AM Pacific!
We’ll discuss the latest Amazon news and how it impacts your business. Tune in for valuable insights to help you stay ahead. Catch the live stream on LinkedIn, YouTube, and Facebook. Let’s get into it! Click here to read on our website
Amazon’s “Buy For Me” agentic AI feature is under fire after small businesses reported their websites were scraped without consent, leading to AI-generated product images, incorrect listings, and orders for items they no longer sell. Merchants like Bobo Design Studio say they were unknowingly opted in, struggled to opt out, and are now dealing with customer complaints, mismatched product data, and fulfillment issues.
For Amazon sellers, this controversy highlights the growing tension between AI-driven discovery tools and marketplace trust—especially as Amazon tightens controls on third-party shopping agents while simultaneously aggregating off-Amazon data. Sellers expanding into DTC sites should monitor how these agentic features evolve, as legal exposure, inaccurate listings, and customer confusion could impact brand reputation and overall operations.
A U.S. judge ruled that Amazon must face a class-action lawsuit accusing the company of allowing and participating in price gouging on essentials during the COVID-19 pandemic. The complaint alleges Amazon inflated prices on both third-party offers and its own inventory, with some items increasing more than 1,000%, and that consumers had “no meaningful choice” but to buy from Amazon during shortages.
For Amazon sellers, this case underscores growing regulatory pressure around pricing fairness, especially during supply-chain disruptions, and signals that marketplaces may face stricter enforcement of price controls. Sellers should expect tighter monitoring of price spikes, more aggressive compliance actions, and potential changes to Amazon’s pricing policies going forward.
Amazon is facing a major strategic shift as AI shopping agents from OpenAI, Perplexity, Google, and others increasingly let consumers shop without ever visiting Amazon, threatening the company’s control over discovery, checkout, and customer relationships. Despite blocking 47 bots and even suing Perplexity, Amazon is now quietly hiring for partnerships in “agentic commerce,” signaling that it may need to work with AI agents rather than fight them.
For Amazon sellers, this emerging landscape could reshape how customers find products, who controls pricing and visibility, and which platforms own the buying experience. Tools like Rufus and Buy For Me show Amazon preparing for an AI-driven future, but the bigger question is whether third-party agents will bypass Amazon entirely—and what that means for seller traffic, attribution, and competitiveness in the years ahead.
Amazon admitted it had been “regionalizing” certain FBA listings for nearly two months, causing products to disappear for shoppers in major cities like Miami, NYC, and Chicago—even while inventory was in stock and fully compliant. Sellers only discovered the issue by chance, as FBA listings still showed as “Featured Offer” in Seller Central, making the glitch nearly impossible to detect without testing multiple ZIP codes.
For Amazon sellers, the impact was devastating: massive sales drops, restock limits triggered due to lower velocity, and the risk of long-term storage fees on inventory customers couldn’t even buy. While Amazon claims the issue was resolved after removing ASINs from an “experimental program,” the lack of transparency raises concerns that Amazon may be testing intentional regional restrictions on FBA listings without informing sellers.
TikTok Shop has rapidly become a dominant force in social commerce, reaching 18.2% market share in 2025 and projected to hit 24.1% by 2027, driven by explosive sales growth and its ability to merge entertainment with instant purchasing. Sales on TikTok Shop jumped 407% in 2024 and another 108% in 2025, positioning the platform as a massive discovery engine—especially for Gen Z and Millennials.
For Amazon sellers, this signals a major shift in where product discovery and impulse buying happen, with TikTok increasingly capturing attention (and conversions) before shoppers ever reach Amazon. As social commerce grows past $100B by 2026, sellers who diversify into TikTok Shop—particularly with low-price, trend-driven products amplified by creators—stand to gain significant incremental revenue.
China’s new data-driven tax regime is forcing platforms like Amazon, Shein, and Alibaba to report merchant profits, driving a 12.7% surge in eCommerce tax revenue—but also creating major strain for cross-border sellers operating on thin margins. Many Chinese exporters say the new 13% VAT for businesses over 5M yuan in sales wipes out profitability, with Amazon sellers reporting average margins of only 8–20%.
For Amazon sellers in the U.S., this matters because higher taxes on Chinese competitors could shift pricing dynamics, reduce ultra-cheap competition on certain categories, and potentially change sourcing behavior globally. At the same time, rising return rates—expected to hit $849.9B in the U.S. by 2025—add pressure on retailers everywhere to manage costs and protect margins.
Amazon will begin limiting how reviews are shared across product variations, ensuring only closely related variations—such as color, size, quantity, or model fitment—share feedback. Variations with meaningful functional differences will no longer pool reviews, which may reduce star ratings and total review counts for many listings.
For Amazon sellers, this means variation strategy becomes mission-critical: misuse of variation themes could cost review equity, while properly aligned variations will retain review sharing. These changes roll out by category from February through May 2026, with Amazon giving sellers 30 days’ notice before their listings are affected.
New U.S. tariffs have reshaped the 2025 e-commerce landscape, driving up costs for foreign sellers and pushing many consumers toward domestic platforms. Temu and Shein have seen steep declines in traffic and active users as their low-cost model falters, while Amazon continues to grow thanks to strong U.S. logistics, local inventory, and AI-powered personalization.
For Amazon sellers, this shift means less competition from ultra-cheap imports, higher consumer trust in domestic listings, and increased demand for fast, reliable delivery. As AI accelerates product discovery and local-first shopping grows, sellers positioned in the U.S. with efficient supply chains stand to gain the most.
Amazon is updating the FBM refund process on January 26, 2026, extending the refund window from two business days to four calendar days, giving sellers more time to inspect returned items. However, if a seller fails to process the refund within that period, Amazon will issue an automatic refund—and SAFE-T reimbursement will not be available except in cases where the return never arrived.
For Amazon sellers, this raises the stakes on tight return workflows and makes the Guided Refund workflow even more important for applying restocking fees and documenting damaged or missing items. Sellers who handle FBM need to adjust their operations now to avoid unnecessary losses and protect margins.
Amazon.ca now requires sellers to submit a strict Self-Attestation document identifying all individuals who own or control 25% or more of the business, aligning with updated Canadian KYC laws. This verification includes legal names, birthdates, ownership percentages, and full business structure, and disbursements can be held if documents are incomplete or outdated.
For Amazon sellers, this means higher compliance burdens, zero room for mismatched documents, and the need to maintain accurate ownership records—especially for corporations with layered parent structures. The shift signals a broader global trend: marketplaces are tightening identity controls, and anonymous or lightly verified seller accounts are becoming a thing of the past.
Amazon has quietly changed how Brand Stores are scored, moving from engagement-based metrics like dwell time to a sales-focused rating system that ranks stores as High, Medium, or Low based on attributed revenue. This shift means Amazon sellers must optimize storefronts for conversions rather than just browsing behavior, as higher-rated stores are now tied directly to stronger sales performance.
The update rolled out globally on December 12, 2025, and introduces new API metrics so advertisers can track sales within 14 days of store visits. For sellers, the message is clear: Brand Stores must be strategically structured, conversion-driven, and aligned with peer benchmarks to maintain visibility and ad efficiency across Amazon’s retail media ecosystem.
A new January 2026 report ranks the highest-earning third-party Amazon sellers, with multiple private-label brands generating more than $1 billion in estimated annual revenue. The list highlights how dominant well-optimized D2C brands have become on Amazon, with sellers like GLAM_AZON, EZ Sportzwear, and Renpho all leveraging large catalogs and strong review velocity to scale massively.
For Amazon sellers, this data reinforces the importance of brand-building, catalog expansion, and operational efficiency—because the biggest revenue winners overwhelmingly follow a private-label/D2C model rather than wholesale or arbitrage. It also shows that U.S.-based sellers still lead the marketplace, while a few Hong Kong and China brands continue to break into the top tier with strong electronics and wellness products.
Amazon reminded sellers that 1099-K forms for the 2025 tax year will be issued in January 2026, with reporting thresholds remaining at $20,000 in gross sales AND more than 200 transactions. Sellers can access the form in the Tax Document Library, but only the primary account user will be able to download it.
Amazon also noted that some states have different thresholds, and non-US sellers must update expiring W-8 forms by December 30, 2025 to avoid account issues. For Amazon sellers, this update is a straightforward reminder to prepare tax documentation early so payouts and account health aren’t disrupted.
Tariffs surged to their highest levels in decades, reshuffling the entire retail landscape and driving consumers toward value and resale, while squeezing brands that rely heavily on imported goods. Winners included Costco, Walmart, and U.S.-made brands that benefited from shifting demand, along with resale platforms like ThredUp and The RealReal that gained customers seeking tariff-free options.
On the losing side, Temu, Best Buy, Under Armour, and many small businesses were hit hard as tariff-driven costs rippled through supply chains, raising prices and cutting margins. For Amazon sellers, the takeaway is simple: import-heavy brands are facing tougher economics, while value positioning, diversification, and onshoring strategies are becoming critical survival tools.
Hymie Zebedeexplains why enrolling a new product in Vine at full price backfires—because reviewers still judge value based on the listed price, even though they get the item for free. A small flaw feels unacceptable at a high price, often resulting in a 4-star review that weakens your listing from day one.
Lowering your price during Vine enrollment flips reviewer perception, making small imperfections feel insignificant and dramatically increasing the odds of earning 5-star reviews. For Amazon sellers, this means launching low, securing a strong review base, building rank early, and then gradually raising the price as conversion stabilizes.
Brandon Fishman highlights a major inconsistency in Amazon’s price-parity enforcement: Poppi keeps the Buy Box even though its product is cheaper on Target, while smaller brands routinely lose the Buy Box for even minor price differences. Losing the Buy Box tanks ads, sales, and ranking—yet Amazon appears to overlook the same violations for well-known retail favorites.
For Amazon sellers, the takeaway is that enforcement isn’t equal, and smaller brands must be extra vigilant about price variance across channels to avoid sudden penalties. The situation raises concerns about fairness and transparency in how Amazon applies its own rules.
Todd’s Top Tip: Maximize Reimbursements Under the New Manufacturing Cost Policy
Sellers, here’s a practical strategy for January 2026: submit detailed sourcing cost proofs for lost or damaged FBA inventory.
Effective since March 2025, Amazon reimburses based on your product’s sourcing cost (manufacturer price, excluding shipping or duties) instead of retail value.
Providing accurate documentation helps avoid Amazon’s lower estimates, minimizing payout reductions by 50-75% in some cases.
Your plan:
In Seller Central, navigate to “Inventory” > “FBA Inventory” > “Inventory Defect & Reimbursement” > “Manage Your Sourcing Cost.”
Enter your sourcing cost for affected ASINs, like electronics or apparel.
Upload proof-of-value documents, such as supplier invoices or cost breakdowns (ensure they’re clear and untampered).
Submit the request; if declined, resubmit with additional info or appeal via Seller Support.
Track reimbursements in the Reimbursements Report, aiming to validate costs for all high-value items.
Use tools like Inventory Lab to organize documentation for quick submissions.
This approach ensures you recover the maximum eligible amount and protects your margins.
This week brings significant platform changes for Amazon sellers, including the end of commingled inventory, new AI advertising costs, and rising shipping rates that could impact your bottom line. Amazon continues testing delivery innovations while expanding partnerships that may reshape how sellers compete across channels. Read the full digest on our website or listen to the podcast News Commingling Is Officially Dead Amazon ended commingled inventory as of March 31, requiring new labeling...
This week brings significant operational changes for Amazon sellers, from the end of commingling on March 31 to new shipping tools and AI developments reshaping the platform. Amazon's logistics partnerships are shifting while new delivery options could change fulfillment expectations. Read the full digest on our website or listen to the podcast News Amazon Ends Commingling Policy March 31 2026 Amazon officially ends commingling of pooled inventory from multiple sellers, protecting brand...
This week brought significant changes to Amazon's operational landscape, from Prime Day timing shifts to payment policy updates that demand immediate seller attention. Legal developments and AI tool launches are reshaping how sellers operate on the platform. Read the full digest or listen to the podcast on our website News Amazon Prime Day Moved to Late June 2026 Amazon has moved Prime Day from July to late June, possibly to avoid competing with World Cup games. Why This Matters: Prime Day...
