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Amazon News: Major Policy Shifts, Walmart Competition, and New Seller Risks This Week
Published 2 months ago • 10 min read
This Week's Top Amazon Seller News
Hey Reader,
This week’s edition highlights intensifying competition from Walmart, growing scrutiny on sellers and claims, major fulfillment and ad platform changes, and new risks around account security. Several of these updates could directly affect your visibility, costs, and compliance in the months ahead. 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 dive in! Click here to read on our website
Amazon is planning a massive 225,000-square-foot retail store near Chicago that combines groceries and general merchandise, marking its first true competitor to Walmart’s supercenter format. The store will include pickup-dedicated parking and sit next to a Costco, signaling Amazon’s push to compete directly in physical retail.
For Amazon sellers, this move shows Amazon doubling down on blending online and offline shopping — which could eventually reshape how inventory, local fulfillment, and Buy Box geography work. As Amazon expands its grocery and general merchandise footprint, sellers may see new opportunities for regional placement, same-day delivery, and omnichannel visibility.
A new PYMNTS report shows Walmart gaining online momentum, nearly tripling Amazon’s eCommerce growth rate in Q3 2025 and doubling its digital share of overall sales since 2022. While Amazon still dominates with 56% of U.S. online retail spending, Walmart’s 115% online growth over the past few years signals a structural shift driven by grocery, pickup, and omnichannel fulfillment.
For Amazon sellers, this matters because a rising Walmart means more competition for consumer attention and shifting buyer behavior—especially in groceries and essentials where Amazon’s share remains weaker. As Walmart turns in-store traffic into digital customers, sellers may see increased pressure on pricing, product mix, and cross-platform strategy.
Walmart is now testing sponsored ads inside Sparky, its AI shopping assistant, giving advertisers a new place to influence product recommendations as shoppers ask questions inside the Walmart app. The company is also expanding AI tools for brands, including “Marty,” an AI agent that automatically recommends bids, keywords, campaign fixes, and performance reports.
For Amazon sellers, this signals growing competition as Walmart accelerates its own AI-driven discovery and advertising ecosystem—directly challenging Amazon’s Rufus and Sponsored Ads. As Walmart’s agentic AI becomes a new product-discovery channel, sellers positioning on both platforms will need to optimize listings, creatives, and ads for AI-driven search.
Nearly 3 million seller accounts and over 24 million listings have been removed across Amazon, Etsy, eBay, Shopify, Temu, and other platforms since the INFORM Consumers Act took effect, as marketplaces crack down on fraud, counterfeit goods, and unverified sellers. About 40,000 high-volume sellers were suspended for failing to meet verification rules, with roughly half reinstated after submitting proper documentation.
For Amazon sellers, this signals heightened scrutiny around identity verification, product authenticity, and compliance—especially as enforcement actions increase, including a recent $2 million FTC fine against Temu. Marketplace oversight is tightening, so maintaining clean documentation and compliant listings is now critical for account health and long-term stability.
Amazon will begin deactivating dietary supplement listings on March 31, 2026 if any ingredient weights or potency claims on the product detail page do not exactly match the Supplement Facts Panel. This enforcement specifically targets inflated marketing claims—such as presenting “10,000mg raw herb equivalent” when the product only contains 500mg of extract—which Amazon now classifies as misleading and non-compliant.
For Amazon sellers, this marks a major shift: supplements are now being evaluated as regulated labels, not creative marketing surfaces, meaning all titles, bullets, images, and backend attributes must reflect precise, label-verified data. Sellers must perform full audits, update images to show complete labels, and rewrite any copy relying on raw-equivalent storytelling or exaggerated potency to avoid forced deactivation.
Amazon has announced its 2026 Preferred Pricing program for Multi-Channel Fulfillment, offering sellers discounted MCF rates and up to $1 in FBA credits per shipped unit starting January 15, 2026. Depending on volume and eligibility, sellers can receive up to 15% off outbound fulfillment fees across channels like Shopify, TikTok Shop, and more.
This program includes both 6-month and 12-month discounted tracks, giving new and high-volume MCF users strong incentives to route off-Amazon orders through FBA inventory. For Amazon sellers expanding beyond the marketplace, the waived Walmart-related surcharge and growing support for multi-channel automation make MCF a more cost-effective fulfillment strategy for 2026 and 2027.
Amazon is under scrutiny for blocking outside AI shopping agents like Perplexity’s while simultaneously using its own “Buy For Me” agent to shop on other brands’ websites—sometimes ordering outdated or out-of-stock products. This has created frustration among small brands that intentionally avoid Amazon but are now being pulled into Amazon’s ecosystem without consent.
For Amazon sellers, this highlights a larger power shift: AI shopping agents are reshaping product discovery, and Amazon is trying to control the rules while still expanding its reach across the open web. As agentic commerce grows and lawsuits pile up, sellers should expect more policy changes, tighter restrictions, and increasing influence from external AI platforms on how consumers shop.
U.S. online holiday spending hit a new record at $257.8B, though growth slowed to 6.8% as inflation and tariff-driven price pressures made shoppers more cautious. Cyber Week carried much of the momentum, with steep discounts and Buy Now Pay Later usage (up nearly 10%) helping drive sales of electronics, appliances, and other high-ticket items.
Adobe also reported massive increases in AI-driven shopping traffic, signaling that consumers are rapidly adopting AI assistants for product discovery and purchase decisions. For Amazon sellers, this means shoppers are still spending—but competing on price, mobile optimization, and AI-friendly listing quality is becoming more important than ever.
Amazon will require all U.S. sellers to use Amazon Prepaid Return Labels starting February 8, 2026, eliminating the long-standing exemption that protected high-value items from automatic returns. Sellers say this removes their ability to troubleshoot customer issues before a return—an essential step that often prevents unnecessary refunds, damage in transit, and massive losses on expensive or fragile products.
Many high-ticket sellers warn they may need to raise prices, cut certain SKUs, reduce ad spend, or abandon Amazon for some items entirely, as forced prepaid labels increase return abuse risk and shrink already-tight margins. For Amazon sellers overall, this signals another major shift in return policy—one that requires tighter margin buffers, revised ad strategies, and stronger evaluation of which items still make sense to sell on the platform.
A new phishing campaign is impersonating Amazon and tricking users into clicking “Update Your Account” emails that lead to fake login pages designed to steal credentials. Hackers are now using AI-generated, pixel-perfect replicas of Amazon’s branding, contributing to an explosion in shopping-related scams—up 30× during the holiday season.
For Amazon sellers, this matters because compromised buyer accounts can trigger fraudulent orders, chargebacks, account flags, and even abuse claims that impact seller metrics. Sellers should also reinforce security on their own accounts by enabling 2-Step Verification and passkeys, and avoid clicking any login links sent by email.
Amazon linked-account suspensions continue to be the most common—and most damaging—type of enforcement, driven by shared financial data, IP addresses, devices, logins, or old closed accounts that Amazon’s systems still associate with a seller. Because Amazon treats linked accounts as a single entity, one problematic or previously banned account can trigger immediate suspension for all connected accounts.
For Amazon sellers, this means even innocent overlaps—such as logging into a client’s account, using shared Wi-Fi, or reusing old business information—can result in shutdowns unless each account is fully separated with its own LLC, banking, devices, and operational footprint. Sellers hit with this suspension must investigate the link, gather documentation, and submit a precise appeal explaining the connection and proving account independence, often resolving older dormant accounts first.
Amazon is encouraging sellers to maximize Valentine’s Day performance by updating product images with seasonal themes and enhancing A+ Content to match what gift-givers are searching for. Sellers are also advised to curate themed collections in their Brand Stores—such as “for the tech lover” or “for last-minute shoppers”—to make gifting easier and improve conversion.
Creating compliant gift bundles and running targeted Amazon Ads can increase visibility during this high-intent shopping window, especially in competitive categories. Amazon also recommends planning now for Valentine’s 2027, since early preparation gives sellers more time to optimize products, creative assets, and inventory for next year’s demand.
This article breaks down how Amazon sellers can measure and improve their conversion rate—known in Seller Central as Unit Session Percentage—which shows what percentage of listing visitors actually buy. It explains where to find this metric in Business Reports and Brand Analytics, why sessions (unique visitors) matter more than page views, and what benchmarks look like across major categories.
For Amazon sellers, conversion rate is a direct profit lever: higher CVR reduces ACoS, improves PPC efficiency, and increases organic rank, while low CVR signals listing, offer, review, or traffic-quality problems. The article also outlines the main causes of low conversion rates and gives actionable fixes—stronger images, benefit-driven bullets, A+ Content, better pricing strategy, and tighter keyword targeting—along with how Amazon’s AI assistant Rufus now influences shopper behavior before they even click.
This article outlines the most effective ways Amazon sellers can find legitimate wholesale suppliers in 2026, emphasizing the importance of sourcing only from brand owners or authorized distributors to stay compliant with Amazon’s strict authenticity rules. It highlights practical sourcing methods—from Google filetype searches and supplier directories to trade shows, brand outreach, and reverse-engineering competitor products—to build a strong supplier list.
For Amazon sellers, the guide stresses verifying supplier legitimacy, securing compliant invoices, and analyzing true landed costs before committing, since Amazon’s enforcement actions continue to tighten. It also recommends building a repeatable sourcing process, testing small orders first, and avoiding dropshipping to prevent account risk.
This article explains how Amazon DSP becomes much more strategic and flexible once a brand moves from Vendor Central to Seller Central, giving sellers more control over pricing, inventory, and messaging that directly impacts DSP performance. It emphasizes that DSP should serve as a full-funnel demand engine—building awareness, retargeting PDP visitors, and expanding reach beyond Amazon—rather than being judged by short-term ROAS like PPC.
For Amazon sellers, the biggest opportunity lies in leveraging DSP audiences, sequencing creatives properly, and pairing DSP with Sponsored Ads to drive stronger new-to-brand growth and higher conversion efficiency. It also warns against common mistakes—treating DSP like PPC, over-segmenting audiences, and ignoring creative optimization—which often cause Seller Central brands to waste spend or shut down campaigns too early.
Danan Coleman reports being targeted by a coordinated buyer fraud scheme after refusing an unreasonable refund request from a customer who threatened to have friends buy, return, and sabotage his listing. Shortly afterward, Coleman saw repeated spikes in returns and negative customer experience reports—despite maintaining a near-zero return rate for over a decade.
Even with clear evidence, multiple support cases, forum posts, and direct escalation, Amazon has taken no action to stop the coordinated abuse. For Amazon sellers, Coleman’s experience highlights ongoing gaps in seller protection and the need to document every threat, return pattern, and customer interaction for potential escalation.
Amazon’s Maggie Zhang revealed new research showing that consumers overwhelmingly prefer interactive video ads, finding them more engaging, memorable, and likely to drive action than standard video formats. The study—based on 7,000 consumers, 10 brands, and eight interactive formats—found that shoppers value being able to add to cart or get more information without leaving the content.
For Amazon sellers, the data shows that interactive ads with direct “add to cart” CTAs deliver the strongest purchase-related outcomes, making them a powerful option for performance-driven brands. The research also highlights best practices such as pairing ads with engaging content genres and using urgency-driven messaging to boost conversions across the purchase funnel.
Steven Pope warns that Amazon’s February 12 variation review split will severely impact sellers—not just by separating reviews, but by tanking conversion rates, rankings, and PPC efficiency when isolated variations reset to zero reviews. Once split, each child ASIN must stand on its own review count, and many variations will lose Buy Box strength overnight.
Pope urges sellers to audit every variation now by counting how many reviews reference each specific child SKU, then immediately begin boosting review velocity through Vine, automated requests, insert cards, and targeted PPC. Sellers who prepare ahead of the rollout maintain ranking and market share, while those who wait for Amazon’s 30-day notice risk permanent damage.
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