Amazon Is Maxed Out: The 2026 Omnichannel Playbook with Andrew Maff | EP. 223

Andrew Maff 00:03
Building a successful business from the ground up on Amazon, I dare I would say, is fucking impossible, like it's it's ridiculous the low margin that you're making on some of these things.

Narrator 00:14
Welcome to the E comm Show podcast. I am your host, Andrew Maff, owner and founder of BlueTusker, from groundbreaking industry updates to success stories and strategies. Get to know the ins and outs of the e Commerce Industry, from top leaders in the space. Let's get into it!

Andrew Maff 00:28
Hello everyone. Welcome to another episode of the E comm show as usual. I am your host, Andrew Maff, and today it's going to be an interesting one. I'm going to probably piss some people off, I imagine, which sometimes that's the goal, right? Isn't that a good episode? But today I'm going to talk to you about my opinion on the future of E commerce and specifically Amazon. I know that typically, a lot of people say this stuff and it's like, okay, yeah, we're going to lean into AI and blah blah. No, I'm actually going to talk to you about some stuff that I think is going to be a very interesting shake up that is not AI related, actually. This is stemming from just overall observation of where I've seen the industry and things that I've heard, both externally as well as internally at Amazon.

Andrew Maff 01:22
If you don't know, I actually in this this summer 2026 I will celebrate 20 years of being in this industry, which is wild when I first started. It's actually one of my favorite stories to tell. I was in high school. My father actually acquired a company that was selling, like, basically, like car parts to dealerships, and him and his buddies wanted to buy it and put it on the internet, and so they started doing that. And one of my favorite stories to say is that Amazon actually approached them as one of the first companies to offer selling something other than books, because at that time, that's all that Amazon sold, and they turned it down, which I love. It's one of my favorite things to make fun of him for I may not be on I may not have to do this if he had actually said yes, but here I am, so in and out. Obviously, I was in that industry and beginning then obviously Amazon really still didn't kind of hit its heyday, until like the mid 2010s ish. So what ended up happening was I went in a house at a couple places, started an agency in college that was mostly retail, but a little bit of E commerce. Because back then, there really wasn't a lot of E commerce. And then I went back in house in the mid 2010s right? About Amazon peak, and that's when I just got super deep in the Amazon space. So it's been kind of interesting, right? So you think back to those heydays of like, you could throw up a listing and, like, even if it looked like crap, you were gonna make some money. It was, it was great. It was everyone was loving everything. But there was cons, right? There was Amazon was growing so fast that even they couldn't deal with it. So they had all these support issues where sellers would get taken down and their businesses would be completely gone because of some dumb, like robot thing that read the wrong line and thought, you know, whatever. I was actually in house and that happened to us once, and we then it was completely taken down for two weeks. And it was peak q4 too, which was fantastic. And it was, we had changed out the credit card because it was hitting capacity. We couldn't pay it off fast enough because of how much volume we were doing. And so we're like, All right, we'll just change out credit cards, and once this is paid off, move back and blah, blah. And for whatever reason, Amazon thought it was fraud and completely shut the account down. Ridiculous. Back then, you had to use a credit card I don't think you could put it on the account, from what I remember anyway. I digress. So that was a big problem, right? Of like sellers getting taken down and blah, blah. So over time, they started to solve that issue where it really wasn't, I don't want to say it was solved, but I would say that it is significantly less common for sellers to be taken down without some type of reason. It could be something small and it could be a pain in the ass to figure out what exactly that reason was, but it's a little bit less common. Getting onto the platform way easier. They have multiple Amazon departments that help certain sellers get onto the platform and start their business on Amazon. And so they've made it so easy, they've almost made it too easy.

Andrew Maff 04:43
So what I've noticed, which actually this isn't what I've noticed. Everyone knows this at this point. A lot of brands, a lot of sellers on Amazon, the US are from overseas. One of my, like, normal presentation things that I always go through because I, you know, I always talk about omni channel stuff is, in the last five years, FBA fees have been averaging an increase of 10% year over year. 2026 they went up again. Not that much, but they did go up again. CPCs average an increase of about 8% year over year, competition averages about a 6% increase year over year. 2025 there was less sellers on than before, but it still is averaging about 6% because they've had peak years before. And then last year 2025 I was speaking at Prosper. And what they didn't tell I always preach omni channel stuff, and I think everyone should diversify and not be so reliant on Amazon. I think it's, I've always thought it was pretty much ridiculous, stemming from when we changed out that credit card. But they didn't tell me that I was going to do this presentation literally right next to Amazon's booth. So it was kind of weird to, like, stand next to them and just be like, you guys, no one should be relying on you. So that was fun. But I actually had this guy come up to me after the presentation from Amazon, and he told me that 73% of sellers in 2024 were in Amazon. Us are from overseas. They could be they could be overseas sellers that have an entity in the States, or they're just genuine overseas sellers. I kind of took it with a grain of salt, just because that number seemed astronomically high, like I just find that really hard to believe. But even if you cut it in half, I mean, that's still wild. But so what I noticed was, okay, so the problem now for sellers is your Amazon is charging more, right? FBA fees going up. CPCs are going up. Is it technically Amazon charging more? But it's just stemming from lack of real estate. Competition continues to go up because Amazon's made it significantly easier to sell in the States and for people to kind of sell in other markets. So obviously, they've made it easier for people in the states to sell in Europe and Canada, etc. They've done the exact same for everyone else, thus how we're ending up with so many sellers here in the States. And so what it's caused is Amazon has become just this massive, just overload of products, where if you want one thing, you've got 1000 choices, right?

Andrew Maff 07:28
So now it's so overcrowded that the real estate available is limited, right? So there's only so many places you can sell ads. And so this is when I started to realize, like, Okay, I think I see what's going on here. Last year, no, I'm sorry, was it 2024 I can't, no, yeah, it hadn't been last year, 2024 at Accelerate Amazon's Accelerate conference they do in Seattle every year. All they talked about was advertising, but all they talked about was their off Amazon advertising. They talked about DSP. They talked about running ads on streaming networks. They talked about all of the different like things that there were, different TV shows they were working with, and things like that through Prime and like all this stuff, right? So what I thought was kind of interesting was because years in the past, even at Unboxed, like, all they would do is really talk about the traditional Amazon advertising, you know, that you get through Seller Central, not through DSP, and that pivoted real hard. And so what I started to think about is like, Wow, I wonder if they've kind of hit a capacity with how much they can do there, right? Like they've low they ran out, like some new features and things like that audience targeting blah blah. But there's really nothing too crazy that's come through there in a while. Granted, it does seem like they're starting to merge DSP with it, but I digress.

Andrew Maff 08:52
So I thought that was kind of interesting. And so what it made me start to realize is like, Wow, I wonder if they've kind of caught on to the fact that there's limited real estate on the marketplace now, there's only so many, like, keywords, there's only so many, you know, ads you can run on someone else's listing, and so many spots for a brand, sponsored brand, so like, there's only so much room to do things, and because there's significantly more competition than there is actual users, and they're not losing users, it's just they're the competition is coming in with so much product from all over the world, and there's only so many users in the States, and so you can only grow so fast when you've kind of basically saturated the market. And so the issue is that there's not so many places you can run these ads. And so these companies are coming in. They're all trying to run ads on certain things. It's driving up CPCs. CPCs are getting too expensive, but they made it so easy for overseas sellers to come in. The overseas sellers are coming in with significantly lower price, price point products, so you can't increase your product price to justify the CPC costs or the FBA costs, and so now your margins are just crushed.

Andrew Maff 10:02
So building a successful business from the ground up on Amazon, I dare I would say, is fucking impossible, like it's it's ridiculous the low margin that you're making on some of these things. So that's obviously why I preach off Amazon Marketing and stuff, which for different podcasts at different time, I guess, but then this is where it gets kind of even more interesting, right? Where I'm like, Okay, this, this has to be the case. This has to be what's happening. I have been on Amazon's Buy With Prime and MCF Advisory Council for three or four years now. And the first couple years it was buy with prime. And I loved buy with prime. I You've probably heard me talk about it a billion times. I still love it. I think it's awesome. I think the you know, no matter what brands think you're not, you're not just competing with your competition. You're competing with yourself on Amazon. So if you sell your product on Amazon, you've seen it, you probably have jacked up your Meta ads been like, oh, man, I'm not getting as much through my DTC as I would like. So you turned them off, and then all of a sudden you realize your Amazon is coming down, because you're getting people going from your website to Amazon, searching for your brand name and buying your product. Which the best way to judge that is through your brand search. Right?

Narrator 11:15
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Andrew Maff 11:46
Buy with prime helped me kind of mitigate that, and it helped me kind of reduce how many people were bleeding over. Plus you get to keep their contact information, blah, blah. So the first couple years, Amazon was a big that's all they talked about. Buy with prime, or at least the department that I was in, was buy with prime, right? And MCF was, like a secondary kind of thing. Ish, all the other advisory council members that were more on the operation side, they tend to talk about MCF, but, like, that was really about it.

Andrew Maff 12:16
Last year they took a real hard pivot, real hard pivot to basically trying to think about what I can and can't say here. I'm going to get in trouble for something, so I'm trying to just reduce how much I get in trouble here. They're going to, they, they didn't completely get away from buy with prime, but it's definitely not the forefront anymore. Now all they want to talk about is MCF, and what they've also leaned in on from an MCF side. And, you know, I'm not in the operational space, so this isn't in my wheelhouse. But like, they're getting into, like, Amazon freight, where they're now working with, like, Hey, you can get your products, you know, from overseas and shipped over with Amazon now and then they'll also handle the last mile fulfillment. So, like they're doing everything from a fulfillment perspective. And so what I realized when they released the Buy with prime, too, to take a step back here, was when they released buy with prime, I was like, this is really interesting, how you're letting brands keep their data now, and what is the benefit of the Buy with prime side from Amazon side of things. And I was like, oh, okay, you're actually still getting your FBA fees. You're still getting fulfillment costs from purchases that were made off Amazon. Interesting.

Andrew Maff 13:33
So you have probably made a judgment on the marketplace, hitting a capacity, and so you're trying to figure out, how can we make more money off of the other things that sellers are selling off Amazon? Then what I realized was the way that I was like, Oh, this has to be the case, was they started to release incentives for people to try buy with prime or MCF, and gave them, in a lot of scenarios, gave them advertising money to run ads off Amazon. DSP you know that if you have if you have buyer with prime or if you have MCF, you can actually run ads using DSP for targeting people on Amazon and sending them back to your website now, so, like, Amazon's developing this omni channel approach where they're like, I think what they've realized is, if we give brands the tools to grow their entire business, but we help them handle the fulfillment side, either through buy with prime MCF, both anything like that, or even if we help them with their advertising efforts, from an off Amazon perspective, as they grow, we will grow with them, because we're going to be the ones that have to fulfill.

Andrew Maff 14:51
MCF is super sticky, right? Like, if you go the MCF route, there's a ton of pros to it. Don't get me wrong. I to me. It makes a lot of sense if you don't want to deal with warehouse stuff. And every time I've ever had to do that, it's a nightmare. But if you're doing MCF stuff, or you're doing MCF, then effectively you have to, like, you're shipping them all your products. So like getting out of the MCF and going to a new 3PL and getting that set up. Like, doing those changes suck. I know brands that do that, they're like, Hey, we're changing 3PLs this year, and it'll take them a year before they're, like, kind of back up and running into a normal, normal sense. So, like, it can be a lift to actually do major changes like that. And so I think that the MCF side is allowing these brands to be more stickier to Amazon. And so Amazon is effectively just starting to do what they can to own the fulfillment side, hence why they also got into the fright the freight area and fright. So what's interesting is all of these signs are pointing to, Amazon has accepted the fact that the marketplace is crowded. It's crowded with lower price point products, which, by the way, is also not a great experience for the user. I can't tell you how many times on Amazon I feel like I'm shopping longer now, because I know if I buy the least expensive thing, I'm probably going to fucking hate it and have to return it or it's going to break. And so I lean in on my usual cheap is expensive, so I have to do more research around like, which one's not the cheapest, but it's also not going to rob me blind. So, you know, obviously that becomes like Amazon, basically glorified flea market.

Andrew Maff 16:39
But the interesting thing from a seller side is, everyone, enough brands, are not realizing this soon enough, right? Like it's there's certain categories. It's not possible for you to launch a new product and be successful in that category, like it's just not, like it's extremely crowded. The price point on most of the products is absolutely ridiculously low. The consumers aren't brand loyal to anything on there, so it's just a nightmare to get into. And a lot of those, you know, you used to see webinars and stuff, and people talking about this all the time, of like, helping find products that you should, you know, go and purchase to sell on Amazon. Those, I haven't seen one of those in years. Like, it's been a long time since I've seen some of the standard people talking about those things, because we've kind of hit a capacity with the amount of different types of products on Amazon. I'm sure someone's going to listen to this, by the way, and be like, No, I could still do Sure, go for it. But like, it's limited, right? It's not as easy as it once was. It's hard to find now. And so basically, it's slowly becoming a deterrent for people to start an E commerce business on Amazon. And so now they're having to start in more of a traditional sense, like going through like a well at traditional, say that extremely loosely. But now they're having to go into a DTC perspective first, and then start there, where they have a little bit more control over their own future. The issue is with that launching on Amazon, especially in its heyday, but even now, like the process of it, of here's my product, here's some nice images. I did my keyword research. Here's my listing. Here's three keywords I want to own. I'll put some money behind it. Boom, you're done like that's that's really about it, right? DTC, no way not. This doesn't work like that at all. You launch a website no one even knows it exists, unless you spend an arm and a leg to get people to it, or you are hustling hard, making an obnoxious amount of content on something like a TikTok or whatever.

Andrew Maff 18:41
Now the other issue that most Amazon sellers are finding out the hard way is Tiktok is putting a sour taste in their mouth for the DTC world, like it's not Amazon. Amazon, like I said, you take you a handful of keywords you really want to own, put some money behind them, and you're going to own those keywords. You're going to see conversions. Tiktok, it does not work like that. You got to get some really nice content, and you've got to put an arm and a leg behind that budget, because you you got to let the algorithm do its thing, and then you got to pump out a ton of content, and on that side of it too, not every product works well on Tiktok. Like that is a if that's a shiny object in front of someone I've that I've ever seen. It's definitely Tiktok. It's not easy to be successful on Tiktok. You can't just, like, throw stuff up there and like, oh, it's going to work. Like, if you sell dish towels, good luck. Gonna be really fucking hard on Tiktok. But to the contrary, products that are usually less than about $35 at least where it stands right now. Tend to do well on Tiktok, as long as you're coming out with something different, right, and you have some cool content around it, but if it's not a wildly differentiated product, it can be difficult to sell on there, too. I'm obviously going off on a tangent here, but I think that what's going to happen here with E commerce, and I'll say the magic word for a second, and. With AI that over the next, my opinion, is in the next it's 2025 sorry, no, it's not 2026 by 2028 right? So not this year, not next year, but by 2028 this is going to be a wildly different space you're going to have to sell on multiple sales channels. You're going to have to look at your business holistically. You can't just look at like, how much am I spending on Meta and what am I getting on my DTC site for it? Like, no, because people are leaving and they're going to Amazon or they're going to Walmart, or they're going wherever. I actually just did an event the other day speaking to brands in Europe. And one of the things that was a big conversation piece was like, the average American is A refuses to pay for shipping. No matter what you do, they refuse to pay for shipping. So if you're doing DTC, you have to have a free shipping threshold. Otherwise they're going to go to Amazon. The other thing is, if you can't get it to them in, like, less than a week, and, like, almost guarantee it, they're going to also leave and go to Amazon, right? Because the biggest benefit of Amazon, not only is that you don't pay shipping, but it's also the fact that it's pretty guaranteed about when your product's going to show up. Nine times out of 10, your product is says as soon as soon as you order, it's like, it's gonna be there on Saturday. It shows up on Saturday.

Andrew Maff 21:24
8 times out of 10. When I order something through a D to C side, it's like, it's gonna be here on Saturday, more like Wednesday, like it doesn't work like that. So people are going to have to solve the fulfillment side. Well, guess what? Here comes Amazon, right? So now Amazon has figured out that's where we can help these brands be a lot more intertwined with the way that the American audience likes to shop. They like to have their free shipping options. They like to have more guaranteed shipping dates. And so Amazon's like, we crush at this. Let's find ways to actually do this for people outside of just our marketplace, since the marketplace is essentially overcrowded.

Andrew Maff 22:02
So I think in two years, two and a half years, you're probably going to be looking at a very different landscape where these sellers that do the best are going to be the ones that have found ways to be successful across multiple channels, both marketing channels and sales channels. And it'll be more of a rising tide lift all boats, sort of scenario. I've always said that I think e commerce is getting more like traditional e commerce marketing is getting more like traditional marketing. And the way that I've always referred to that is like, think back to the Mad Men days. You ever watched an episode of Mad Men and the owner of the company that hired them was like, oh, what's the ROI of my billboard, no, like they don't. You can't do that. It's not possible. And that's how e commerce is going to be. It's going to be attribution is no longer as easy as you once wanted it to, because all these platforms want to own their own data, and so you're going to have to make these more judgment calls on okay, we're spending x amount in marketing. The company overall saw X amount of lift. We know that people saw us on Meta or on Tiktok and went to Amazon or went to Walmart or went to Chewy, and then maybe they signed up on our website, and then they got X percent off, and then they used it here. And now we're retaining them. And where's the best customer acquisition involved? Like, it's going to be a lot more challenging. And we've been spoiled with knowing where every 510, years ago, we were spoiled with knowing where every single penny went. That's going to be completely gone. So overall, I usually try to keep these relatively short and sweet, and I already went a little over what I wanted because I ranted, but that's my theory. So market, save this episode. I'll bet, in two years, two, two and a half years, let's say by mid 2028, this is 100% a reality, and Amazon has started to really own the fulfillment space. I'll bet it happens. But as usual, thank you all for joining me. Please do the usual thing, rate review, subscribe all that fun stuff on whichever podcast platform you prefer, or head over to Ecommshow.com to check out all of our previous episodes. But thank you all for joining me see you next. Have a good one!

Narrator 24:09
Thank you for tuning in to the E comm show. Head over to Ecommshow.com to subscribe on your favorite podcast platform or on the BlueTuskr YouTube channel. The E comm show is brought to you by BlueTusker, a full service digital marketing company specifically for E commerce sellers looking to accelerate their growth. Go to bluetuskr.com now for more information, make sure to tune in next week for another amazing episode of the E comm show.