Amazon sellers report sales plummet during recession fears

Multiple Amazon sellers reported dramatic sales declines across marketplace forums between May and August 2025, with many experiencing drops between 60-80% compared to previous years. According to forum discussions posted between June and August 2025, long-term sellers described unprecedented challenges affecting their businesses during a period of heightened economic uncertainty.

"We are almost 80% down compared to last year," posted one seller in early August 2025. Another marketplace veteran with over 12 years of experience stated their daily sales dropped from 40-60 units to 5-10 units if they were fortunate. Multiple forum participants described similar patterns across different product categories and fulfillment methods.

The timing coincides with broader economic concerns. Retail sales experienced their first monthly decline since February 2025, falling 0.33% on a seasonally adjusted basis in June, according to data released July 11, 2025, by the National Retail Federation's CNBC/NRF Retail Monitor. The decline occurred across nearly all sectors as consumer concerns about government policies and economic uncertainty began influencing household budget decisions.

Prime Day performance disappoints sellers

Despite Amazon's claims of record-breaking Prime Day 2025 sales during the July 8-11 event, many third-party sellers reported underwhelming results. "Prime day was a bust, no sales increase, slow prior to prime day," stated one seller. Another described their experience: "3x sales, and ZERO PROFIT."

Multiple sellers noted that increased sales volume during promotional periods often resulted in reduced profit margins. "You are selling products FBA between $10 and $20. After '$100 participation fee', FBA fees, selling fees, ship to FBA fees, product cost, customer returns that are yet to come, return fees, damaged product, and that wonderful PPC, I have a feeling it doesn't matter how many you sell, but how much actual profit you have left," explained one longtime seller.

The disconnect between Amazon's reported success and individual seller experiences highlights the platform's increasing focus on large-scale operations and advertising revenue. Amazon's advertising revenue reached $15.7 billion in Q2 2025, representing a 22% year-over-year increase.

Tariff impacts create additional pressures

Multiple sellers cited tariff-related cost increases as contributing factors to their declining performance. One merchant reported losing the buy box after raising prices to account for 30% tariffs on incoming shipments. "We are receiving a shipment of product in a couple weeks, and we have to pay higher prices, AND 30% tariffs on this shipment. I raised my prices yesterday on the products, and Amazon has disabled my buyboxes," the seller explained.

Amazon's algorithm-driven pricing controls created additional complications for sellers attempting to maintain profitability while accommodating increased costs. Several forum participants described scenarios where price increases necessary to cover tariffs resulted in suppressed listings or lost buy box eligibility.

Algorithm changes affect visibility

Sellers frequently mentioned difficulties with product visibility and search functionality. "Amazon is making our products invisible," wrote one merchant. "As a customer I discovered I can no longer change search to relevant, or pricing low to high or other. Now its just sponsored products and it is almost impossible to find other products."

The shift toward sponsored product placement created additional financial pressure for sellers. Multiple forum participants described scenarios where organic visibility declined unless merchants increased advertising spend. "The algorithm that Amazon runs on is not like a person. It doesn't think or feel. It strictly analyzes numbers. It's a robot," explained one experienced seller providing detailed analysis of advertising challenges.

Amazon's introduction of AI-powered systems and algorithm modifications appeared to favor larger sellers and branded products. Several sellers noted that handmade and small business categories faced particular challenges with reduced discoverability.

Veterans abandon platform

Long-term sellers increasingly expressed intentions to reduce or eliminate their Amazon operations. One seller with 12 years of experience announced their departure: "Yesterday, I decided that October 15, 2025 would be my last day for selling." The merchant described earning approximately $1.5 million in net profit over their Amazon career but noted deteriorating platform conditions.

"Amazon was soooo much better at first, then as time went on, it became worse and worse with ever changing metrics and gated merchandise," the departing seller explained. Similar sentiments appeared throughout forum discussions, with experienced merchants describing increased fees, reduced support quality, and algorithmic uncertainty.

Multiple sellers advised against treating Amazon as a long-term career path. "I have discussed with my kids to look at Amazon as a way to make a few extra bucks on side. DO NOT think this as a 20+ year career. I would say this to ANY seller on Amazon," wrote the departing veteran.

International competition intensifies

Several forum participants attributed declining performance to increased competition from international sellers, particularly those with established manufacturing relationships. "Amazon is dead for local sellers. If you're not a Chinese factory, which is considered a vendor, with 5 to 10 Amazon stores, selling the exact same products to all Amazon marketplaces, then your kind out of luck," posted one merchant.

The observation reflects broader marketplace dynamics where sellers with direct manufacturing access can offer significantly lower prices while maintaining profit margins. Traditional retail arbitrage and wholesale sellers face disadvantages when competing against vertically integrated operations.

Economic uncertainty drives consumer behavior

Multiple sellers connected their declining sales to broader economic concerns affecting consumer spending patterns. "The recession/economy is terrible right now. People are even giving up their pets at record numbers currently due to the High Cost of Living," noted one participant.

Consumer behavior shifts included delayed purchases, increased price sensitivity, and preference for essential goods over discretionary items. "People consume a lot of products on prime day, and more platforms such as TEMU TIKTOK shein have divided up consumers' wallets," observed another seller.

The combination of economic uncertainty and increased competition from alternative platforms created multiple pressure points for Amazon sellers. Traditional retail categories faced particular challenges as consumers sought lower-cost alternatives through direct-to-consumer channels.

Platform fee structure compounds problems

Amazon's fee structure received widespread criticism from affected sellers. Multiple forum participants calculated scenarios where total platform costs exceeded profit potential, particularly for lower-priced items. Storage fees, return processing costs, advertising requirements, and referral fees created cumulative financial pressure.

"Amazon's failure to eliminate scams and fake reviews, the increasing likelihood of accounts being terminated without any real recourse, pervasive crappy treatment of honest sellers from countries all over the world who are trying to follow the rules and provide quality products," listed one experienced seller among platform concerns.

The marketplace's emphasis on advertising revenue created additional complications for sellers operating on thin margins. Multiple participants described scenarios where advertising costs consumed potential profits without generating proportional sales increases.

Looking ahead

The challenges facing Amazon sellers reflect broader e-commerce marketplace dynamics during economic uncertainty. Retail sales data showing declining consumer spending suggests continued pressure on discretionary purchases through the remainder of 2025.

Platform competition from alternatives like TikTok Shop, Temu, and direct-to-consumer channels provides consumers with additional options during budget-conscious periods. Traditional Amazon sellers face decisions about platform diversification or exit strategies as marketplace conditions evolve.

Amazon's advertising success indicates the platform's focus on revenue generation from existing merchant base rather than expanding seller profitability. This strategic direction may accelerate the departure of smaller sellers while concentrating marketplace power among larger operations capable of sustaining higher operational costs.

Timeline

August 2025

• Multiple Amazon sellers report 60-80% sales declines year-over-year across marketplace forums
• Sellers cite tariff costs, algorithm changes, and economic uncertainty as primary factors

July 8-11, 2025

• Prime Day 2025 extends to four days, achieving record sales according to Amazon
• Individual sellers report disappointing results despite platform's claimed success

July 2025

• Amazon advertising revenue jumps 22% to $15.7 billion in Q2 2025
• Retail sales drop 0.33% in June as recession fears grow

June 2025

• Long-term Amazon sellers begin reporting sustained sales declines across multiple product categories

May 2025

• First reports emerge of significant year-over-year sales drops affecting established marketplace merchants

PPC Land explains

Amazon Sellers Third-party merchants who list and sell products through Amazon's marketplace platform, distinct from Amazon's direct retail operations. These sellers range from individual entrepreneurs to established businesses utilizing Amazon's fulfillment services or managing their own shipping. According to forum discussions, many sellers have operated on the platform for over a decade, building businesses around Amazon's marketplace infrastructure. The seller community includes various business models from retail arbitrage to private label manufacturing, with many reporting significant revenue declines during 2025.

Prime Day Amazon's annual promotional event traditionally lasting 48 hours but extended to four days (July 8-11) in 2025. The event offers exclusive deals to Prime members and represents Amazon's largest annual sales period. While Amazon reported record sales for Prime Day 2025, individual sellers experienced mixed results with many reporting minimal profit increases despite higher sales volumes. The event requires sellers to pay participation fees and often involves deep discounting that reduces profit margins, creating a disconnect between platform success and merchant profitability.

Economic Recession The broader economic downturn affecting consumer spending patterns and retail sales performance. Retail sales experienced their first monthly decline since February 2025, falling 0.33% in June according to National Retail Federation data. Multiple sellers attributed their declining performance to recession fears that caused consumers to reduce discretionary spending and delay purchases. The economic uncertainty has created a challenging environment for e-commerce merchants who depend on consistent consumer demand for non-essential goods.

Sales Declines The dramatic reduction in sales volume experienced by Amazon sellers, with many reporting drops between 60-80% compared to previous years. These declines represent sustained performance deterioration rather than seasonal fluctuations, affecting sellers across multiple product categories and fulfillment methods. The consistency of reported declines across different seller types suggests systemic marketplace changes rather than isolated business issues, indicating fundamental shifts in the Amazon ecosystem's dynamics.

Advertising Costs The fees sellers pay for sponsored product placements and promotional visibility within Amazon's marketplace. Amazon's advertising revenue reached $15.7 billion in Q2 2025, representing a 22% year-over-year increase, while individual sellers struggle with rising advertising costs that often exceed profit margins. Many sellers described scenarios where increased advertising spend failed to generate proportional sales increases, creating unsustainable business models that favor larger operations with deeper marketing budgets.

Tariffs Import duties imposed on goods entering the United States, affecting sellers who source products internationally. Multiple sellers reported 30% tariff increases on incoming shipments that forced price adjustments, often resulting in lost buy box eligibility when Amazon's algorithms detected higher pricing compared to competitors. The tariff impact extends beyond direct costs to include marketplace positioning disadvantages, as sellers struggle to maintain competitive pricing while absorbing increased import expenses.

Algorithm Changes Modifications to Amazon's automated systems that determine product visibility, search rankings, and buy box eligibility. Sellers frequently mentioned algorithm adjustments that reduced organic visibility and favored sponsored content, creating additional advertising requirements for maintaining sales performance. These changes appear to prioritize larger sellers and established brands while making it increasingly difficult for smaller merchants to achieve organic discovery, fundamentally altering the marketplace's competitive dynamics.

Buy Box The prominent product placement on Amazon listing pages where customers can directly add items to their shopping cart. Buy box eligibility significantly impacts sales performance, as most customers purchase from the featured seller rather than exploring alternatives. Multiple sellers reported losing buy box status after raising prices to account for increased costs, creating a cycle where necessary price adjustments result in reduced visibility and further sales declines.

Platform Fees The comprehensive cost structure Amazon charges sellers, including referral fees, fulfillment costs, storage charges, and advertising expenses. These cumulative fees have increased over time while seller profit margins have compressed, creating unsustainable business models for many merchants. Forum discussions frequently cited fee calculations showing scenarios where total platform costs exceeded potential profits, particularly for lower-priced items that face proportionally higher fee burdens.

Marketplace Competition The intensifying competitive environment within Amazon's platform and from alternative sales channels like TikTok Shop, Temu, and direct-to-consumer platforms. International sellers with direct manufacturing relationships can offer significantly lower prices while maintaining margins, disadvantaging traditional retail arbitrage and wholesale operations. This competition has fragmented consumer spending across multiple platforms while concentrating Amazon's marketplace power among larger, vertically integrated sellers capable of sustaining higher operational costs.

Summary

Who: Amazon third-party sellers across multiple product categories, including veterans with 10+ years of marketplace experience and small business operators using both FBA and FBM fulfillment methods.

What: Dramatic sales declines ranging from 60-80% year-over-year, accompanied by increased operational costs, reduced buy box eligibility, and diminished organic product visibility affecting seller profitability and business viability.

When: Primary reporting period spans May through August 2025, with sustained declines following disappointing Prime Day 2025 performance during July 8-11 promotional period.

Where: Amazon marketplace across United States operations, affecting sellers in various geographic regions and product categories, with forum discussions indicating international marketplace similarities.

Why: Economic recession fears driving reduced consumer spending, tariff-related cost increases, Amazon algorithm modifications favoring larger sellers and sponsored content, and increased competition from international manufacturers and alternative platforms.