The narrative is everywhere: selling on Amazon is dying. Fewer new seller registrations. Big brands dominating. Chinese manufacturers going direct. Advertising costs eating margins alive. Fee increases outpacing inflation.
And the data behind these claims is real. Marketplace researcher Scott Needham recently released a comprehensive analysis showing all of these trends in sharp detail. His company tracks revenues across millions of Amazon sellers and brands, and the picture he paints is sobering.
But there's a critical distinction that this narrative, and others like it, consistently overlooks. These trends describe the private label landscape, where sellers source products from manufacturers, create their own brand and listing, and compete for visibility from scratch. That model is indeed getting harder, more expensive, and more competitive.
Third-party resellers and arbitrageurs operate under fundamentally different economics. They sell established brand-name products on existing listings using Amazon's FBA (Fulfillment by Amazon) program. And for this business model, the same forces reshaping the marketplace tend to create advantages rather than obstacles.
Here are five marketplace forces currently being framed as existential threats, and why each one may actually represent the strongest case for the reseller model in Amazon's history.
1. Big Brand Dominance Creates a Better Catalog
Companies like Procter & Gamble, Johnson & Johnson, and Unilever are staffing up their Amazon operations, moving advertising budgets from television to the platform, and taking larger shares of marketplace revenue.
For a private label seller trying to compete against these resources, the challenge is real. For a reseller, these brands represent inventory. Name-brand, high-demand, high-trust products with established review histories and proven consumer demand.
Ten years ago, Amazon's catalog was filled with questionable listings and unrecognized brands. Today, it's stacked with products consumers actively search for by name. A reseller doesn't need to fight Tide for shelf space. They need to be on that shelf when Tide's own distribution can't keep up.
Better brands on the platform means a deeper catalog of quality products to source and sell.
2. Gating Expansion Protects Serious Sellers
Brand gating is often presented as brands “cutting out” small sellers. And some brands have restricted third-party access entirely. But the broader gating structure serves a different function for resellers with solid account health and legitimate sourcing.
Gating creates barriers that remove sellers with questionable metrics, shaky sourcing, and corner-cutting practices. For the sellers who earn their way through gating requirements, the result is less competition, less price erosion, and more predictable margins on the listings they access.
A more structured marketplace rewards sellers who treat reselling as a real business. Gating is a feature of that structure, not a flaw.
3. The Advertising Tax Doesn't Apply to Resellers
Amazon's advertising business grew from $12.6 billion in 2019 to $56.2 billion in 2024. Average cost per click sits at $1.04. Sellers report spending roughly 30 cents of every dollar on ads to generate sales. Launching a private label product now commonly requires $20,000 to $25,000 in upfront investment.
These numbers are alarming, and they apply almost exclusively to private label sellers who must build visibility from zero on brand-new listings.
Resellers listing on existing ASINs benefit from the brand owner's established listing presence, reviews, A+ content, and, critically, their decades of brand equity that drives organic search demand. Nobody searches “Tide laundry detergent” on Amazon because of a sponsored result. They search it because Procter & Gamble spent generations making that brand a household name.
Resellers ride on that organic demand without paying for it. The Buy Box algorithm, not advertising spend, determines which seller gets the sale.
4. Chinese Competition Is a Private Label Turf War
The growth of Chinese manufacturers selling directly on Amazon is undeniable. They undercut US sellers by an average of 10% and have taken over categories like apparel, electronics accessories, and home goods.
However, the categories they dominate are primarily private label product categories, where factories are cutting out the middlemen who previously sourced from them. This is a manufacturer-versus-brand-launcher battle.
Resellers sourcing established domestic and multinational brands from retail channels are operating in a different product universe entirely. A Chinese factory making weighted vests isn't competing with someone sourcing Crest toothpaste from a clearance event.
5. Resellers Test Small While Private Labelers Bet Big
Perhaps the most underappreciated distinction is the risk profile. Private label launches now require $20,000 to $25,000 committed to a single product before knowing if it will succeed. If it fails, the seller is left with unsellable inventory and a dead listing.
The reseller model inverts this. Products can be tested with small quantities. If the margins aren't there or the listing is too competitive, the loss is minimal and the data gained is valuable. Resellers build portfolios of proven products through systematic small tests rather than gambling significant capital on individual product bets.
The Bigger Picture
The Amazon marketplace is genuinely evolving. The forces reshaping it are real and well-documented. But the conclusion that “selling on Amazon is dying” conflates two fundamentally different business models with fundamentally different economics.
For private label sellers, the barriers are rising. For resellers operating on existing listings from established brands, those same barriers tend to create structural advantages: better inventory, protected access, zero advertising costs, insulation from factory-direct competition, and dramatically lower risk per product tested.
The marketplace didn't die. The route changed. And the data suggests the faster route may be the one that was there all along.
Brian and Robin Joy Olson coach modern arbitrage sellers through the PATH framework, helping builders create sustainable, system-driven Amazon businesses. Learn more at OfficialOlsons.com.