2025 Drove Out Nearly Half of New Amazon Sellers. If You're Still Here, Read This

If 2025 felt like the hardest year you've had selling on Amazon, you're not imagining it.

The numbers are brutal:

• New seller registrations dropped to 165,000—the lowest in a decade
• That's down 44% from 2024
• Active sellers fell from 2.4 million (2021) to 1.65 million by year's end

Advertising costs climbed. Fees kept rising. Tariff chaos made planning nearly impossible.

But here's what most sellers miss: the ones who left aren't coming back.

And the market didn't just shrink—it consolidated.

The proof:

• Third-party GMV hit $305 billion in the U.S. last year
• Traffic per active seller is up 31% since 2021
• Over 100,000 sellers now generate $1M+ annually (up from 60,000 four years ago)

If you're still standing, you're competing against fewer sellers for more traffic than at any point in the last five years.

Here's what drove the 2025 shakeout—and why survivors are better positioned than they realize.

The Numbers Tell the Story

Fewer Sellers. Same Customers. More Revenue Per Survivor.

The introduction covered the decline. Now let's talk about what it actually means for your business.

Amazon's third-party marketplace didn't shrink—it got more concentrated.

The total GMV (gross merchandise volume) from third-party sellers hit $305 billion in the U.S. and $575 billion globally in 2025. That's growth, not decline. Third-party sellers now account for 62% of all units sold on Amazon.

So where did that money go if sellers dropped by 25% from peak?

To the sellers who stayed.

Here's the concentration in action:

Active sellers: 2.4 million in 2021 → 1.65 million in 2025

Sellers earning $1M+ annually: ~60,000 in 2021 → 100,000+ in 2025

Sellers earning $100M+ annually: ~50 in 2021 → 235 in 2025

Traffic per active seller: Up 31% since 2021

The math is simple: fewer people splitting a bigger pie means larger slices for everyone still at the table.

One more stat worth noting: 60% of today's top 10,000 sellers registered before 2019. Longevity wins on Amazon. The sellers who stuck around, learned the systems, and adapted are the ones capturing the lion's share.

What Drove the Shakeout

The "Optional" Parts of Selling Became Mandatory

2025 didn't have one killer—it had several forces squeezing margins at once.

Advertising stopped being a growth lever. It became a survival requirement.

Amazon's advertising revenue climbed to nearly 10% of total company revenue by Q3 2025. That money came from somewhere—seller pockets.

Here's the reality: less than half of the first 20 products in most search results are organic placements now. If you're not paying for visibility, you're disappearing. And Amazon's algorithm rewards velocity, so stopping ads doesn't just hurt growth—it tanks your ranking.

Platform fees kept extracting more.

Amazon quietly completed a major shift in 2025. The company is now 60% services and just 40% retail. Seller fees alone account for a quarter of Amazon's entire revenue. FBA costs, referral fees, storage fees—each one crept up while margins stayed flat.

AI raised the execution bar for everyone.

Listing optimization, keyword research, creative assets—tasks that used to differentiate strong sellers became table stakes. AI tools made "good enough" easier to achieve, which meant standing out required even more effort.

The result: Sellers operating on thin margins or treating Amazon as a casual side hustle couldn't absorb the pressure. They left. The ones who stayed had either the capital to weather it or the operational discipline to adapt.

What This Actually Means for You

Less Noise. More Signal.

It's easy to read "sellers are leaving" and assume the opportunity is dying. The opposite is true.

Think about what fewer competitors actually looks like day-to-day:

• Less aggressive price wars from desperate sellers trying to liquidate
• Fewer fly-by-night competitors undercutting your Buy Box with unsustainable margins
• More breathing room to build real supplier relationships instead of racing to the bottom
• Ad costs that stabilize once the casual spenders exit the auction

The sellers who left in 2025 were largely the ones running on thin margins with no room for error. When fees went up and advertising became mandatory, they had nowhere to go.

You're not competing against 2.4 million sellers anymore. You're competing against 1.65 million—and a meaningful chunk of those are inactive or barely operating.

The real competition? The serious operators who stuck around. That's a harder group to beat, but it's also a smaller and more predictable one.

This is the difference between a shrinking market and a consolidating one.

In a shrinking market, everyone loses. In a consolidating one, survivors absorb the share that others left behind. Amazon's GMV grew while sellers declined. That gap went somewhere—and it went to sellers who kept showing up.

Where to Focus in 2026

The Playbook for a Post-Shakeout Market

Surviving 2025 was step one. Capitalizing on the consolidation is step two.

Double down on operational efficiency.

When margins are tight and fees keep climbing, every percentage point matters. The sellers thriving now aren't finding secret products—they're running tighter operations.

That means:

• Repricing strategies that protect margin, not just win the Buy Box
• Inventory management that avoids long-term storage fees
• Knowing your true cost per unit (including ads) before you source

Consider expanding beyond a single marketplace.

The report shows a small but notable shift: sellers operating on just one Amazon marketplace dropped from 69% to 66% over 2025. Multi-marketplace sellers grew.

Walmart, eBay, and TikTok Shop all gained ground last year. You don't need to go all-in, but testing a second channel reduces your dependency on any single platform's fee structure.

Watch for the "decompression" signals.

Not everything is getting harder. A few 2026 trends could actually ease pressure:

• Chinese sellers facing new tax enforcement from Beijing (potentially leveling the playing field)
• AI tools reducing operational overhead faster than platforms can capture the savings
• New discovery channels (like conversational commerce) threatening Amazon's ad monopoly

None of these are guaranteed. But they're worth watching.

You Earned Your Seat

2025 was a filter. It separated sellers who were experimenting from sellers who were building businesses.

If you're reading this, you passed.

The sellers who left aren't regrouping for a comeback. The prospective sellers who watched from the sidelines aren't suddenly jumping in now that it's harder than ever. The casual competition that used to crowd every product category and drive irrational price wars? Largely gone.

What remains is a smaller, more serious field—and a marketplace that's still growing.

That's not a consolation prize. That's a genuine competitive advantage you didn't have two years ago.

The work ahead isn't easier. Amazon will keep raising fees. Advertising will stay mandatory. Operational excellence will remain the baseline, not the differentiator.

But you'll be doing that work against fewer competitors, with more traffic per seller, in a market that just proved it rewards the ones who stick around.

2026 isn't about surviving. It's about capturing the share that 2025 shook loose.