Amazon sellers boycott advertising in revolt over policy change

for Amazon These are tough times under any circumstances for sellers who account for more than 60% of the products sold in the vast e-tailer market.

The past year has been tough due to the Trump administration’s high tariffs on imports, and the recent war with Iran has led to higher energy costs, putting even more pressure on retailers to raise prices for struggling consumers or eat their losses.

As if that wasn’t enough, Amazon is introducing a series of new policies that some sellers claim are making it increasingly difficult to maintain business on the platform.

In recent weeks, Amazon has changed the way it pays sellers revenue and collects money for advertising services. Later, the company announced that it would begin charging merchants a 3.5% fuel surcharge to offset the rise in oil prices caused by the Iran war.

To some sellers, the move is yet another example of Amazon squeezing sellers.

“Our margins are running out,” said Michael Patron, who runs an eight-figure Amazon business and frequently criticizes the company’s policies on his X account. “I think that’s why it keeps getting more and more frustrating.”

Patreon and hundreds of major Amazon sellers are boycotting the advertising platform on Wednesday to protest recent policy changes that are hurting already growing profits.

The 24-hour ad boycott is organized by Million Dollar Sellers, a community of more than 700 members with combined revenues of approximately $14 billion.

“Sellers have been complaining for years, but this feels different,” MDS co-founder Eugene Cayman said in a post on X about the boycott. “The reason is simple: this is no longer just a matter of frustration, but a matter of cash extraction.”

Amazon spokeswoman Ashley Vanicek said the recent changes to how and when ads are paid align “some sellers” with practices that most sellers already use.

The company said it introduced the fuel surcharge to recover some of the increased costs due to increases in crude oil and logistics prices.

Launched in 2000, Amazon’s third-party marketplace has grown into a key pillar of its retail strategy. We host millions of sellers, allowing everyone from small businesses operating out of a garage to established brands to list their products on the site.

Seller services revenue, which includes commissions, fulfillment, advertising, and customer service support, has soared more than 400% since 2017.

The division’s revenue rose 11% year over year to $52.8 billion in the fourth quarter, accounting for about 42% of Amazon’s total sales in the same period.

Multiple sellers told CNBC that they expect prices to increase as a result of the temporary fuel surcharge that goes into effect on April 17th. Other policy changes could strain funding and have more negative consequences.

This could leave retailers unable to make payroll or pay suppliers, leaving them incurring further debt, Kaiman said.

“The vast majority of sellers are husband and wife teams, one employee, one assistant, and they get 3% cash back on their advertising spend, which is probably their third-largest expense,” Kaiman said in an interview. “So you’re getting a lot of money back on this and they’re taking away that ability.”

Many sellers, especially small and medium-sized businesses, “make a living off credit card points” earned from Amazon ad purchases, Cayman said.

Amazon announced earlier this month that it would no longer take credit card payments from some sellers’ earnings and would start automatically deducting advertising costs from their earnings. The notice said that if a seller’s revenue does not cover the advertising costs, Amazon will bill their existing payment method as a backup. The company also provided sellers with a $2,500 credit toward advertising costs “to facilitate this transition.”

Amazon claimed the measure would help sellers “cash flow management,” but sellers said it was likely to have the opposite effect.

Amazon announced Tuesday that it would postpone changes to ad payments until August 1st after receiving feedback on the policy.

“Based on the feedback we received, we are delaying this change until August 1, 2026 to give advertisers in this group time to prepare,” the company wrote.

In mid-March, Amazon introduced a new policy for some U.S. sellers that means it will keep sales proceeds for a longer period of time. Sellers currently have to wait until 7 days after the item is delivered to receive their proceeds. Previously, Amazon paid sellers seven days after the item was shipped to the customer.

A combination of policy changes exacerbated sellers’ concerns.

“Combined with payment delays, this creates a massive cash flow strain,” Adam Lundquist, founder of Heist Labs, which buys e-commerce brands, wrote in a LinkedIn post in response to the ad announcement. “There is a breaking point with rising fees and cash flow pressures, and Amazon may soon realize it.”

One seller, who has run a five-figure Amazon business for more than 20 years, said the late payment policy would put a huge strain on his company, which was already struggling to pay its overhead.

“Amazon has already taken all the money,” said the seller, who asked not to be named for fear of retaliation. “Whatever is left is our money, but we’re not receiving it. We’re delaying it.”

Amazon said most sellers have been using the seven-day payment system since 2016. The company said it has given sellers who are not already using the system six months’ notice to prepare for the transition.

Amazon says the policy gives customers time to receive the item, initiate a return, and file a complaint.

The boycott is just the latest example of Amazon coming under intense scrutiny over the increasing costs of selling on its platform.

Amazon’s average share of each sale will exceed 50% for the first time in 2022, according to third-party market research firm Marketplace Pulse, citing a sample of sellers’ income statements.

The sales fees are part of the Federal Trade Commission’s antitrust lawsuit against Amazon, which was filed in September 2023 and scheduled for trial in 2027. The lawsuit accuses the company of using anticompetitive tactics and stifling sellers in its marketplace to maintain its e-commerce dominance.

Amazon previously disputed the FTC’s claims, saying its practices were beneficial to competition.

The company said Marketplace Pulse’s findings inaccurately portray the cost of selling on the site because it confuses commissions with the cost of optional services that some sellers purchase from the company.

“We continue to support our retail partners’ success in their stores and help them achieve record sales year after year,” Vanicek said in a statement. “We have invested heavily in powerful tools, services and programs that allow us to grow our business, typically at a lower cost than the alternatives.”

Charles Chacaro, who has been selling on Amazon for 15 years, said the recent policy changes amounted to reducing cash flow for some sellers from 90 days to “virtually nothing.”

“I think this is just Amazon taking the fees that it pays credit card companies,” said Chacaro, who sells household and kitchen products and runs a newsletter for Amazon merchants. “And if smaller sellers can’t handle these types of charges, that’s fine. There are a small number of other sellers who are trying to succeed on this platform.”

Amazon serves as a springboard for many businesses to take advantage of its huge customer base, touting seller success stories in its annual progress report, noting that last year 2024 independent sellers generated an average of about $290,000 in annual sales.

Distributors are often referred to as partners.

But Chacaro said the policy change makes Amazon feel like sellers are just “facilitators” for the company, rather than a partnership with them.

“It’s another slap in the face, a reminder, ‘Hey, wake up, this isn’t your job,'” he said. “This is your job, under my rule.”