Amazon Becomes Vital Sales Outlet For Independent Merchants

When Lauren Wang started Flex in Los Angeles a decade ago, she wanted to create a new type of menstrual care product that wasn’t already on the market—a disposable disc that lasts longer than traditional tampons or pads. Flex sold through its own website early on; it was one of a number of brands going the direct-to-consumer route at the time. That approach proved fruitful: The business grew to $20 million in revenue in a few years on its website alone.

Nowadays, though, Flex’s fastest-growing sales outlet is Amazon. Flex still sells on its own web site but it spends less money on ads trying to drive consumers to its own site. Flex is one of a growing number of consumer brands and independent merchants that say Amazon is a more important sales outlet than ever before.

Independent brands have long been wary of Amazon—so much so that the Federal Trade Commission sued the company in 2023, alleging Amazon uses its size to hurt sellers, consumers and rivals. But attitudes have changed, in part because changes to Google’s search engine have reduced the amount of traffic independent websites get from Google searches.

At the same time, the rising cost of digital ads on Meta’s Instagram and Google has made it harder for sellers to make money from their own websites. In contrast, working with Amazon allows sellers and their customers to tap Amazon’s nationwide delivery mechanism and one-click checkout.

“Five years ago, a DTC brand could think of Amazon as optional distribution,” said Rob Cromer, CEO of Aisle3, which advises brands on their Amazon presence. “And I think today for scaled consumer brands, that is a much harder argument to make.”

Cromer said revenue from Amazon is making up an increasing percentage of some of his clients’ revenue. Several people who work at or advise brands on e-commerce and advertising told The Information their sales from Amazon have been growing faster in general than sales from other retail channels in recent years, including brands’ own websites.

More than 75,000 independent sellers made over $1 million each in sales on Amazon’s store in 2025, a 36% increase from 2024, Amazon said in April. The average sales generated by independent sellers increased to $375,000 in 2025, up from around $290,000 in 2024, the company said.

Beauty-focused e-commerce agency Market Defense used to tell brands a few years ago to expect Amazon to be 15% of their business. Nowadays Amazon can make up 30% to 40%, said Vanessa Kuykendall, chief experience officer at the agency.

The growing value of Amazon to brands has coincided with accelerating growth in its revenue recorded from outside sellers over the past three quarters, while advertising revenue—which mostly comes from merchants buying ads to promote their products on Amazon—also accelerated in the most recent quarter. Part of the second-quarter acceleration is due to Amazon moving up its Prime Day shopping event to June; it’s previously been held in July.

Overall, Amazon’s retailing revenue—including advertising and services for outside merchants—grew by 14.8% in the first half of 2026, compared to the first half of last year, after steadily growing at around 11% over the past couple of years. Just over 60% of sales on Amazon’s marketplace comes from products sold by outside merchants.

“Customers come to Amazon to discover and shop from a broad selection of products and brands at everyday low prices and with fast delivery,” an Amazon spokesperson said. “We invest heavily in tools, services and programs to help brands and sellers of all sizes grow their businesses and connect with new customers.”

AI’s Impact

Amazon’s growing value as a retail outlet has prompted some brands to rethink the role of their own website. “A lot of brands have come to us to reevaluate their DTC versus Amazon strategy, because Amazon’s seeing the growth and DTC isn’t,” said Jonathan Wilner, a senior vice president of commerce media at Market Defense.

Some companies have already changed tack. In one high-profile example, The Honest Co., founded by actress Jessica Alba, stopped selling on its website. Instead, people find only information about its products on the site, which sends them to sites like Amazon for actual purchases. The Honest Co.’s move, effective at the end of 2025, followed a 6.7% revenue drop in the third quarter caused partly by a decline on sales handled through its website, even as sales on Amazon grew.

“Amazon…is now our largest customer,” said Carla Vernon, The Honest Co.’s CEO.

One of the big factors driving Amazon’s growth is changes in the economics of selling directly on a merchant’s own website. Historically, merchants got traffic from consumers either searching for a product on Google or seeing an ad on Google, Instagram or Facebook that prompted them to visit a website. While site visitors didn’t always buy something, the cost of ads was low enough that merchants could still make money.

That has all changed. The introduction of AI-powered results on Google has reduced website traffic that occurs organically, meaning independent of ads.

“Organic traffic to brand websites has definitely seen a decline across pretty much every brand from a startup to a major corporation as AI is changing search behaviors,” said Rosie Osmun, chief operating officer at ad agency Neon Growth.

At the same time, the cost of ads to drive people to websites has risen. Google search ad prices increased 27% between the second quarter of 2021 and the second quarter of this year, and Instagram ad prices increased 21% over the same period, according to data from ad agency Tinuiti. Costs to run sponsored ads on Amazon’s marketplace are up only 11% over that period.

“It used to be cheaper to drive customers directly to your website,” said Jason Landro, co-CEO of e-commerce agency Nectar. “Ad costs have significantly increased across the board.”

Meta pointed to a blog post from earlier this year that said the sales produced by every dollar spent on Meta ads had risen 25% since 2022.

Amazon Ascendent

One way many people find out about products today is on TikTok. And while TikTok has its own shopping site, two e-commerce consultants said when consumers discover a product on TikTok, they’re likely to buy it on Amazon.

Kuykendall from Market Defense said that while many people discover a product on social media, “consumers rarely research or buy in that same place.” Instead, many go to Amazon, where they can see consumer reviews before buying. “We’ve found in our own research that the vast majority of consumers read reviews as their first step after finding a product they’re interested in, well ahead of reading the description or watching a video.”

Wang from Flex, for instance, says consumer reviews of Flex products posted on Amazon are so effective at convincing customers to try its period discs that Flex printed the reviews out and posted them in the New York subways earlier this year. In contrast, customers view reviews on a brand’s own website with “a certain level of suspicion,” Wang said.

Once people have read a review on Amazon, the convenience of completing a purchase on the site ensures they buy it there, thanks to the company’s speedy delivery system and generous return policy.

Even for sellers who want to rely on their own sites, some find there’s value in attaching Amazon’s brand name through the “Buy With Prime” badge, which offers benefits of Amazon Prime membership such as free shipping through Amazon’s delivery network—even for products they buy outside Amazon.

“Amazon is a trust factor,” said David Khandrius, co-founder of e-commerce consultancy Peachy, compared with websites that don’t have a well-established reputation. Khandrius said his clients had been adding the button more frequently this year.

To be sure, Amazon’s ascendancy isn’t necessarily bad for brands that want to maintain their own website as a sales outlet. Clients of e-commerce agency Nectar that sell consumable products, products like supplements or toothpaste, have found once people buy their product on Amazon, they’re more likely to buy a product on their DTC site, said Nectar’s co-CEO Landro, who analyzed recent data from Amazon’s marketing platform.

“Customers know that if they have a problem, they’re not going to get burned,” Landro said of customers’ trust in the Amazon return process. “That gives them an opportunity to try the brand, and then if they have a good experience, it seems like they’re exploring more directly from that brand.”