Is It Still Worth Starting an Amazon Business in 2027

About a decade ago, my wife and I ran a private label brand selling travel accessories on Amazon. It grew faster than we expected. Our top product kept selling out; we added color variations and a few related items, and before long we were doing well enough that a company with a portfolio of more than 10 Amazon brands bought us out at what we considered a fair price.

Here’s what surprised us. The business exceeded what we had in mind when we started, but we realized selling on Amazon wasn’t quite what we expected. We wanted to have success but also remain small. But we realized Amazon was far more appropriate for larger brands, and we’d have to invest much more money than we were comfortable with to have a business that would last long-term.

If you’re thinking about launching an Amazon business in 2027, the market has changed in ways that make our story a perfect example. New Amazon.com seller registrations in 2025 dropped to the lowest number in a decade. The sellers who remain are bigger and more professional. The question today is what size business you’re willing to build to make it work.

What the Numbers Say About Selling on Amazon Right Now

Amazon.com registered just 165,000 new sellers in 2025, which Marketplace Pulse called the lowest annual total since it began tracking the data in 2015. That’s a 44% drop from 2024. Active sellers fell from 2.4 million in 2021 to around 1.65 million by the end of 2025.

The latest Amazon seller statistics show two interesting trends. There are fewer sellers than there were a few years ago, but the sellers who remain are moving more product than ever. Third-party sellers accounted for roughly 62% of units sold on Amazon in 2025.

Amazon’s 2025 Small Business Empowerment Report said U.S. independent sellers averaged more than $375,000 in annual sales, up nearly 30% from the year before. More than 75,000 of them passed $1 million in sales, a 36% jump from 2024. Those are sales figures, not profit, and Amazon has publicly disputed some of Marketplace Pulse’s seller counts as understated. But either way, the direction is clear. Fewer sellers are doing more business, and the smaller operators in the middle have mostly thinned out.

What Happened When Our Amazon Brand Took Off

The Stockout Problem

Our top-selling product sold through faster than we could restock it. If you’ve never run a physical product business, that sounds like a win, but it isn’t. Every day you’re out of stock, you lose sales to competitors, and your ranking drops. We spent a lot of time scrambling to reorder, forecasting demand we had almost no history on, and watching the business lose momentum if a shipment was late.

How Inventory Quietly Took Over Our Cash Flow

The obvious fix was to order more units at a time. Lead times ran about two months from the day we paid our supplier to the day the units arrived at an FBA warehouse. Then we had to wait longer for the inventory to actually sell and for Amazon to pay us.

After about 18 months, we ended up with seven products and 15 total SKUs across color variations. We could have added many more, but the inventory costs of adding SKUs prevented it. The problem is that each new product and each new color is another inventory bet that eats cash months before it earns any back.

Why We Decided to Sell

There wasn’t a single breaking point. It was more like a slow realization that the business had two paths and neither one fit what we wanted.

We could stay small, which meant staying exposed. A few products, a few variations, no cushion if one of them stopped selling or a competitor undercut us (which was a constant challenge). We could keep growing, which meant taking on bigger and bigger inventory positions and tying up cash for longer stretches. We didn’t have great protection against something going wrong, and plenty could go wrong.

At the time, I was in a lot of Facebook groups for Amazon sellers, and account suspensions and closures came up constantly. Some sellers broke the rules and paid for it. Others made innocent mistakes. Some had no idea what triggered their suspension. If our account had been closed, we’d have had no way to move our inventory. Our initial backup plan was to sell on our own website, but that’s a long-term project that takes serious effort to grow, and we could tell pretty early we weren’t going to invest in that for a business we weren’t sure we wanted long term.

So I posted in a Facebook group that we were considering a sale. A lot of people responded, but most didn’t have the money. One person did and made us a fair offer, and we took it. The buyer was a company that owned more than 10 private label brands and had a warehouse in California for shipments that arrived from China.

What’s Changed for Amazon Sellers Since Then

Cash Takes Longer to Come Back

In March 2026, Amazon rolled out a standard reserve period of seven days after the delivery date (DD+7) for North American sellers. The clock on your payout now starts when the customer gets the package, not when you ship it.

You pay a supplier, wait two months for inventory, pay to ship it to an FBA warehouse, wait for check-in, then sell it. Now add another week or so to the final step before cash becomes available. For a growing seller, that’s a major challenge.

Advertising Is Part of the Cost of Selling

In Marketplace Pulse’s 2026 Seller Index, nearly half of sellers named marketplace fees as their biggest margin concern, while 46% pointed to advertising costs. If your margin math only works with no ad spend, you’re probably out of luck.

Your Competition Is Probably Overseas

In 2025, U.S. sellers made up 16.3% of new Amazon.com registrations, down from 26.8% in 2024 and 70.8% in 2016. More than half of active sellers worldwide are now based in China. Sellers with lower production costs and tighter supplier relationships can undercut you on price, so your edge usually has to come from brand, content, reviews, or a niche they haven’t bothered with.

The Exit Market Has Cooled

When we sold our business, “Amazon aggregators” weren’t yet a widely known category. A few years later, one in four new Amazon sellers planned to sell to an aggregator, and the biggest players were raising billions. Then the market collapsed. Thrasio, the largest aggregator, prepared for bankruptcy in late 2023. Deal volume dropped sharply.

We were lucky with our timing, and I’d be careful about betting your plan on selling to someone later. The exit might come, but you shouldn’t build the business around that assumption.

A Go or No-Go Scorecard for New Amazon Sellers

If you’re weighing an Amazon launch, run through these questions before putting money down.

1. Can you fund at least two inventory orders before your first one pays off?

Map the full cash timeline. Supplier deposit, balance payment, freight, FBA check-in, sell-through, DD+7 hold, payout. If order number two needs to be placed before order number one is cash-positive, know that number up front.

2. Does the product still make money after fees and ads?

Run the math with realistic ad spend, not best-case. Amazon’s Revenue Calculator gets you part of the way there. Add referral fee, fulfillment, storage, returns processing, and the low-inventory fee if your supply chain is tight.

3. What stops someone from copying you next month?

Brand recognition, design patents, bundles, and niches too small for big operators to care about all work. Don’t try to compete on low price.

4. How many products or variations will it take to feel stable?

One hero product is fragile. More products add resilience, and they also add inventory exposure. Decide where your line is before you cross it.

5. How big do you want this business to get?

This is the question I wish I’d asked first. If the answer is “small and steady,” Amazon as the primary channel may not be your best option. If the answer is “I’m willing to take on real risk to build something big,” the current market still rewards that.

6. What’s your plan if you want out?

Selling to an aggregator was more of a sure thing in 2022 than it is now. Have a backup, whether that’s winding down, moving to your own site, or selling to a smaller operator.

Ways to Sell on Amazon Without Betting the Farm

If what you want is the version I was looking for a decade ago, something small and steady and low risk, there are a few ways to get closer to it on Amazon today.

• Treat Amazon as one sales channel instead of the whole business. Build on your own site in parallel so a suspended account can’t take you out.
• Start with a small test order before committing to a large production run. Yes, the per-unit cost is higher, but it reduces your risk.
• Pick categories where being small helps. Handmade, specialty, or niche products that big operators ignore give you room to compete on something other than price.
• Fulfill some orders yourself (FBM) at first, especially on slow movers. You avoid storage fees and the low-inventory fee while you learn what sells.

Amazon Seller Business FAQ