Fewer Sellers, Bigger Gains: Seizing Amazon’s Shrinking Competition in 2025

Amazon used to feel like a never-ending battlefield: millions of sellers duking it out for every eyeball. Fast-forward to 2025, and things have quietly shifted. Yes, a ton of new sellers keep signing up—roughly a million a year—but the number of active sellers (those getting at least one review in the past year) has actually fallen from about 2.4 million in 2021 to under 1.9 million in 2025. That’s a 20% drop, and it means there’s more traffic up for grabs per seller. In plain English, the average Amazon seller now gets nearly 31% more visits than four years ago. Cue the confetti for anyone still standing, and some serious sticker shock for those just starting out.

Why the Dip in Active Sellers Matters

Let’s unpack that number: Amazon’s overall traffic has stayed roughly level since 2021, clocking in at around 5 billion visits per month across its global network. But active sellers declined from 2.4 million to 1.9 million between 2021 and 2025. Divide the same or slightly higher traffic by fewer storefronts, and voilà, monthly visits per seller climbed from 2,162 to 2,837. In other words, if you’re still in the game, you’ve got about 31% more potential buyer eyeballs on your listings than your counterparts did a few years back.

That traffic bump isn’t just academic. With Amazon’s revenue surging 36% (from $470 billion in 2021 to $638 billion in 2024), it’s clear the pie is growing even as some sellers fall out. Third‐party sellers, who already sold 56% of units in Q4 2021, pushed their share up to 62% by Q4 2024. Translation: More of a bigger pie is yours for the taking if you can navigate the challenges.

Why Sellers Are Fading Out

Okay, so why are fewer “active sellers” sticking around? A few big reasons: rising fees, logistical headaches, and cutthroat price wars.

• Amazon’s Fees Have Ballooned
  • In some categories, referral, FBA pick‐and‐pack, and storage fees now gobble up over 50% of a product’s list price.
  • Monthly or seasonal storage surcharges and random “reclassification fees” can make it feel like Amazon’s charging you just for breathing.
  • The result? Margin erosion that many newcomers can’t stomach.
• Inventory & Case-Management Headaches
  • FBA is a blessing until your inventory gets stranded, buried under storage‐fee surcharges, or stuck in removal limbo. Solving these requires hours of back-and-forth with Seller Support.
  • Switching to FBM (Fulfilled by Merchant) isn’t a slam dunk either; sourcing reliable carriers, managing returns, and weathering holiday shipping bottlenecks add a new layer of complexity.
• Regulatory & Tariff Unknowns
  • Tariff rates have been fluctuating unpredictably, particularly for goods from China or certain apparel categories. A 10% hike overnight can wreck your COGS (cost of goods sold) if you’re unprepared.
  • Sales tax laws and cross-border customs rules shift every few quarters. Small sellers risk penalties if they slip up.
• Chinese Seller Dominance
  • Chinese merchants make up over half of the top-performing Amazon accounts, often undercutting U.S. sellers with razor-thin margins. It’s tough to compete on price when factory-direct sellers list at rock-bottom rates.

Put those together, and it explains why many hopeful sellers register, list a few products… and then disappear. In fact, more than 60% of the top 10,000 Amazon sellers launched before 2019, proving that experience and staying power are huge advantages.

Why the U.S. Marketplace Still Reigns Supreme

If you’re deciding where to list, the U.S. marketplace is still the gold standard. Sure, places like Saudi Arabia boast 8,228 visits per seller, and South Africa is close behind at 8,065. But those markets simply don’t have the total volume or category breadth of Amazon.com. In the U.S., a niche term like “sourdough starter jar” gets roughly 26,766 monthly searches, compared to 179 in Australia or zero in Saudi Arabia. In other words, niches thrive stateside in a way they can’t elsewhere.

Even better: 73% of U.S. sellers who joined in the past year hit their first sale within 12 months. That’s substantially higher than Germany (38%), the U.K. (32%), or Canada (16%). For new sellers looking for quick validation, the U.S. simply offers the best odds.

Challenges to Confront Head-On

More traffic is great, but it doesn’t magically overcome the hurdles. Here’s what you’ll face if you jump into Amazon today:

• Margin Erosion: Even with extra visits, if your fees and COGS leave you with negligible profit per unit, those extra eyeballs won’t matter. Carve out a robust pricing model, know your true landed cost—including tariffs, shipping, Amazon fees, and PPC.
• Inventory Planning: Sell-through rates matter. Overstocking triggers costly storage fees; understocking loses you the Buy Box and lets competitors swoop in. Sophisticated 3PL integrations or tools like Forecastly can help you thread the needle.
• Competitive Pricing & Buy Box Battles: Repricers can help, but they’re not magic. When Chinese sellers aggressively undercut, you risk starting a race to the bottom. Focus on unique value propositions, bundling, subscription offers, or enhanced branding to stand out.
• Regulatory Compliance: Keep up with tariff updates. For instance, electronics gear imported from Asia might incur new duties under a 2025 trade ruling—know it before it blindsides your margin.
• Account Health Vigilance: A single A-to-Z claim or policy violation can drop your seller rating. If you rely on Amazon for 80% of your sales, a suspension can be devastating. Build redundancies: own a Shopify store or diversify into Walmart Marketplace.

How to Capture Your Piece of the (Growing) Pie

1. Lean Into Niche Categories: If you’re selling something ultra-specialized—think artisan beard balm, eco-friendly pet toys, or limited-edition kitchen gadgets—your “competition” pool is smaller. Use tools like Helium 10 to spot emerging micro-niches before they catch fire.

2. Optimize Listings with SEO & Enhanced Content: Keywords matter, but so does conversion. High-res images, 360-degree product videos, and A+ content can take your listing from meh to must-buy. When you’ve got 30% more visits, conversion-rate improvement is pure gold.

3. Strategic PPC & DSP Budgets: With that extra traffic cushion, you might discover that CPCs (cost per click) in your niche are actually lower now due to lighter competition. Run a lean Sponsored Products campaign; if your listing’s solid, you can turn that paid traffic into organic momentum.

4. Leverage Prime & Subscription Models: Products eligible for Prime enjoy a higher click-through rate. If the margin allows, consider bundling or small subscription programs to lock in recurring revenue rather than one-off purchases.

5. Diversify Fulfillment Options: FBA is convenient, but a 3PL (third-party logistics company) hybrid or FBM can be more cost-effective once you hit a certain volume. Free two-day shipping is table stakes; just make sure your margins survive the shipping fees.

6. Plan for International Growth, But Don’t Rush: The data shows 69% of sellers stay confined to one marketplace. If you nail the U.S., expanding later to Canada or Mexico can be a logical next step. But don’t spread inventory too thin across 22+ marketplaces when your U.S. business still has growth levers to pull.

The Road Ahead

As Amazon’s marketplace matures, the landscape will keep shifting—new fees might pop up, algorithm tweaks could rearrange SERP rankings, and global trade winds will bring fresh tariff puzzles. But right now, a rare alignment exists: fewer active sellers, steady or growing buyer traffic, and a rising slice of third-party volume. For brands with grit, this means more opportunity if you’re willing to do the heavy lifting.

The parting advice? Amazon’s game has always been about endurance. Weather the headwinds, optimize your listings, master your costs, and don’t be afraid to lean into niche categories—and you might just ride this 30% traffic bump into the kind of scale that felt impossible a few years ago.

Is it crowded? Sure. Is it still worth it? For those who can adapt, absolutely.

Citations

• Marketplace Pulse: Amazon Is Less Competitive Than Four Years Ago
• Marketplace Pulse: U.S. Is Amazon’s Most Beginner-Friendly Marketplace
• Marketplace Pulse: 69% of Amazon Sellers Sell in Just One Marketplace

• Category: Uncategorized
• Tag: Amazon, News, Order Fulfillment