The commissions that Amazon charges its sellers have risen to levels that are forcing them to raise prices not only on the platform, but wherever they sell their products. This is what emerges from an analysis published by the Not-Ship newsletter, which reconstructs the mechanism underlying the antitrust lawsuit brought by Federal Trade Commission (FTC) against the e-commerce giant.
In 2014 Amazon retained approximately 19% of the value of each sale carried out by marketplace sellers. Today, for many sellers, that share has almost reached 50%. The base commission, set at 15% in most categories, is in line with what eBay and Walmart charge. What makes the bill go up are the additional items: the fulfillment fee for storage and shipping through Amazon warehouses, and the advertising costs to appear among the sponsored ads at the top of the search results.
Formally, only the commission on the sale is mandatory. Fulfillment and advertising remain, on paper, optional. In practice, opting out means losing eligibility for the program First and disappear from visibility in search results: the FTC defines them as one “virtual necessity for doing business on Amazon”. For sellers, the real choice is not between paying for these extras or saving money, but between selling or not selling at all.
Because the price increase is not confined to Amazon
When a company gives away almost half of its turnover in commissions, what remains still has to cover production, logistics to warehouses and personnel. Very few sellers can absorb those costs: the almost obligatory response is to raise selling prices. And since the main commission is calculated as a percentage of the price, the more the price list goes up, the more Amazon’s revenue also increases.
This is where it comes into play Fair Pricing Policy by Amazon, which allows the platform to remove the Buy Box, the “Add to Cart” button, or even suspend a seller if the same item is cheaper on another channel. A seller who raises prices on Amazon to cover commissions is therefore obliged to do the same everywhere, including his own direct sales site, under penalty of losing the Buy Box and therefore sales on the platform. The consequence is that Amazon prices end up becoming the reference even outside Amazon.
In 2024, some sellers told CNBC they lost the Buy Box after Target discounted their products. An ongoing lawsuit brought by the California attorney general accuses Amazon of pushing third-party brands to raise prices at Walmart and Target as well. The More Perfect Union journalism collective even documented the case of a seller being suspended for just one cent off the price charged by Target.
Staying out of Amazon would, in theory, solve the problem. But the platform represents approximately the 40% of US online retail salesa quota that makes exit impractical for most companies. In 2023, the FTC and 17 US states sued Amazon, arguing that the company illegally maintains its dominant position by punishing those who offer lower prices elsewhere and effectively forcing the use of its warehouses. Amazon denies the charges and the trial is set for 2027. In Europe, Germany has already ordered Amazon to stop controlling the prices of third-party sellers, although the decision is not yet final.
