Our Honest Experience as Former 3P Sellers

Between emails about Amazon seller management services and acquaintances asking for business advice, I’m often asked whether we’d ever consider selling our Marmeda brand on Amazon. My answer is usually either a straightforward no or, more politely, I have mixed feelings.

Now, just because Amazon isn’t right for us at this moment doesn’t mean it isn’t right for other brands. If you’re debating whether to sell on Amazon and looking for real-world insight, here’s our take. Quick note: This is based on our most recent experience—Amazon may have updated some of its third-party (3P) seller policies since then.

(Picture of our shop preparing a our faux succulents for Amazon Handmade listings)

The Pros of Selling on Amazon

Massive Visibility

• Amazon has a huge platform and almost everyone uses it, which means potential for a large audience reach.

Search Relevance Support

• Amazon has teams dedicated to improving search relevance, so niche or specific products may be easier for customers to find compared to relying solely on Google searches.

• Having an Amazon listing for your product may even help your product get found on Google searches. 

Customer-Friendly Shopping Policies

• Amazon shoppers LOVE their usual perks: free returns, fast shipping, and cross-country delivery that’s often quicker than most small businesses can offer.

FBA Makes Life Easier

• FBA (Fulfilled by Amazon) can take a huge load off your plate—letting you take a vacation without worrying about order fulfillment.

• FBA also gets products to customers quickly, which is a major boost for conversion rates.

• FBA has the potential to save you on costs of shipping cross-country. 

Brand Protections

• If you hold trademarks, Amazon does offer some helpful brand protection tools.

• As long as you can prove you are the product owner (hold the UPC from GS1) you can control how your product is sold on Amazon. 

They Want You to Sell

• When you have a strong-selling product, Amazon rewards you with higher visibility even without promotions.

Our Backstory: 4.5 Years on Amazon

We sold on Amazon for about four and a half years. It worked well for a while, and we saw a huge revenue increase. The catch? Revenue didn’t equal profit—and profit matters far more. While there were ways to improve profitability, the tradeoffs didn’t align with our long-term business values.

Here are the main barriers we experienced.

(Screenshot of one of our best sellers as the handmade thumbnail) 

The Cons of Selling on Amazon

FBA vs. Non-FBA Struggle

• If you’re not using FBA, getting traction is harder. Customers prioritize Prime shipping, and without reviews, non-Prime listings take longer to gain visibility.

Constantly Changing FBA Fees

• FBA fees are a frequent accounting headache:

  • Sell-through fees

  • Long-term storage fees (with definitions that change often)

  • Seasonal storage fees

  • Peak-shipping fees

  • Processing & handling fees

• There’s no true “flat rate,” and changes often come with little or no notice.

Other Seller Fees

• Referral fees, account fees, and monthly fees can take 7–15% off the top of your sales.

Advertising + Promotions

• Ads can quickly eat into your profit—especially in saturated categories like home goods.

• You’ll likely need promotions at first to build momentum until algorithms and reviews kick in.

• If you're on a shared listing, this becomes even more complex. You don't want to advertise a product you don't already have the "buy box" for. 

Competition on Shared Listings

• If you’re selling a wholesale product or share the same GSIN/UPC with another seller, you must compete for:

  • The lowest price

  • Prime eligibility

• Without both, you won’t win the “Buy Box.”

• Competing with Amazon itself on certain listings? Nearly impossible.

• You’re also at the mercy of other sellers’ inventory levels when you don't have the buy box. This can lead to further long term storage fees and unsold inventory.

Successful SKUs Attract New Competitors

• High-performing listings quickly attract sellers whose model is to jump onto any SKU that’s trending. They basically "piggy-back" off your hard work. 

• Competitors can alter listing details if they win the Buy Box.

• We frequently had to open seller support cases to fix listings that others altered.

Copycats

• Once a product does well, some sellers will send your product photos to Alibaba, replicate your product, and sell it for cheaper.

• We’ve even had entire product descriptions and titles copied—just with different UPCs. 

Reviews: The Love–Hate Cycle

Common review frustrations:

1. Fulfillment complaints unrelated to your product.

2. Random unthoughtful ratings like “Great product!” ... with 3 stars.

3. Reviews meant for a different item.

4. “Too small” or "not as expected" complaints—even with multiple size references, clear descriptions, and context photos.

5. Sabotage from other sellers or sloppy packing/shipping leading to damaged arrivals.

High Return Rates

• Amazon shoppers expect easy returns—and sellers absorb those costs.

• You have limited control over what’s resold versus returned to you. Don't even get us started on products we've had returned and then sent out as "new" to other customers in a clear "cellophane" bag. 

• “Lost” returns can end up resurfacing later, triggering long-term storage fees.

• On our direct website, we maintain a <1.5% return rate. On Amazon? Nearly 20% towards the last few months we sold on the platform. Higher return rates affect your seller ratings as well as your visibility. 

• We also dealt with customers keeping the original item and sending back unrelated items that were still approved as valid returns. Leading us to have to send in a seller support case request. 

• Reimbursements from returns or mistaken returns shifted over time—from the sale price to an Amazon-estimated “cost of goods" after "relevant" fees. 

Not Ideal for Luxury or High-End Brands

• Amazon shoppers often look for bargains, even on luxury items.

• We weren’t willing to heavily discount items only to lose margin to fees. 

• Our high-end packaging was frequently damaged or mishandled, which hurt the intended unboxing experience.

Impact on Small Businesses

• While some small businesses thrive on Amazon, the platform also pulls customers away from independent shops.

• Selling there is contributing to a system that undermines local or community-focused shopping. This can be a hard truth to swallow for those that still want the entrepreneurial dream. 

Amazon Holds the Power

• Account deactivations or listing removals are common—and resolution can take weeks or months.

• If Amazon is your main income stream, this is a big risk.

• You have no control on what Amazon corporate decides for their policies. You are ultimately at their mercy. 

Hard to Build a Real Brand

• Amazon is improving, but most customers say they bought your product “on Amazon”—not from your brand.

• Brand loyalty is extremely limited. It is really difficult to establish customer retention and track customer loyalty. 

It’s Basically a Full-Time Job

• Managing fees, competitors, inventory, and constant platform changes takes a lot of time. 

• We could’ve hired help, but the profits didn’t justify it for us.

(Our FBA boxes with labels on TOP of our specialty packing)

Final Thoughts

Now that our “vent” is out of the way, here’s the truth: Amazon has wins, and it has helped many businesses thrive. I’m an Amazon shopper myself and use it for:

• Office supplies

• Groceries when I'm sick (hello, Amazon Fresh)

• Household staples

• Last-minute clothing needs

But for gifts, home décor, clothing, jewelry, art, and anything meaningful, I try to buy from small or local businesses whenever possible. And many of those businesses now use 3P fulfillers, which still scratches the “I want it fast” itch.

In short: Do what’s best for your business.
Many of these cons are specific to our values, priorities, and brand model. We’re not anti-Amazon. Some small businesses do incredibly well as 3P sellers—especially those built almost entirely on Amazon.

But if you value things like brand recognition, customer retention, customer experience, and full control over fulfillment? Amazon may not be the best fit.

If you're a small business or starting a business, and have questions on being a 3P seller or want further details on our experience, send us a message so we can support each other!

(A screenshot of a little "claim to fame" from an event Amazon did with one of our top sellers)