What Amazon Sellers Must Do to Survive in 2026

Chris: [00:00:00] Hey everybody. Welcome back to Seller Performance Solutions. I'm here with Leah McHugh. Leah and I were, I guess 10 days ago recently at the Prosper Show in Las Vegas, and we've both been on the road since, so we haven't really had a chance to do a little rundown about it. I know there's been lots of posts about it on LinkedIn.

We posted quite a bit about it on LinkedIn. But I think today we just wanted to go through some key takeaways and the rest of the year, as we see coming at us based on what we heard people talking about. I think the best place to start would be Jeff Cohen's keynote. We've known Jeff for a long time and he's, I guess, recently left Amazon, was it last year?

He left Amazon,

Leah: Sometime last year. I don't remember.

Chris: Yeah. And he is working with Sky now, and we can post in the show notes some info about what he's up to. But he was the keynote because of his longstanding relationship with the Prosper Show, which is akin to what ours is, but also what he said about the future of selling on Amazon and what Amazon [00:01:00] sales look like now and how it's different from the last couple of years.

So I'm assuming you and I had a similar take in terms of things have changed and there's just a lot fewer sellers now than there were. Last year and the year before.

Yeah. I think we've been seeing a consolidation of the industry for a while now. It's just sort of getting to that critical mass point where there aren't really a lot of middle class sellers for lack of a better term, it's getting much more split into the very successful people on Amazon or the very successful brands on Amazon. Sometimes it's brands, sometimes there are some very, very successful resellers and then everybody else who's struggling to make margins and struggling to meet their costs.

And I think we're going to see more of that without there if there aren't any major changes in the next year or so. I think it's going to become more and more the big [00:02:00] well-funded sellers who Are doing everything right and then everybody else who can't keep up.

Yeah. And it reminded me of an email I sent, I guess right after I left Seattle.

I was in Seattle doing Amazon meetings before going to Prosper show. And the gist I got from those meetings for seven figure brands or small brands that are starting out is have a lot of resources, have a lot of capital, be ready to spend money on storage, fees, ads, marketing influencers, , being resource rich before you begin the idea that you can slowly crawl along and build an on-ramp for yourself on Amazon.

I just don't see that anymore. And we've talked to a lot. I talk to a lot of people at prosper. And just generally speaking, this year so far, who didn't sound like they had. A plan, right? A viable plan where they were ready to invest in Amazon, and I think Amazon on their side, sizes up brands that [00:03:00] want help at the beginning, like the seller success teams for example.

But other teams in Amazon are looking for brands who have like hit the ground running or they've already gotten established presence. Isn't that fair to say?

Leah: Yeah, I slightly disagree. I think that we're sort of past the point where you can just fund your way to the top. I think if the aggregator phase of Amazon proved anything, it's that having lots of money doesn't necessarily mean you're gonna be successful.

I think what we're seeing now is the people that are successful are the ones that are already looking to the next thing. They're not trying to be competitive now. They're looking at how they can be ahead of the curve and keeping ahead of the curve and create even greater distance between them and their competitors.

And part of that is money, but money itself isn't enough. They need to be looking at the tools. They need to be looking at the market. They need to be looking at what they do off Amazon and how that affects their sales on Amazon. How they can competitively use AI [00:04:00] potentially to put themselves ahead of their competitors. And, and that's what we're seeing. The most successful brands or sellers doing on Amazon, anyone who's just trying to like, catch up with the recent changes are already behind the curve basically.

Chris: I, and just shedding costs and getting rid of overhead.

Leah: Well, that's what's interesting.

It's the sellers in the middle that are getting tighter margins. The sellers that are higher up are actually having greater margins.

Chris: Yeah. Well, they're reaping the benefits.

Leah: And everyone else is struggling. Yeah.

Chris: And they probably know they're going to reap more benefits the more sellers depart, but sellers who are struggling with costs and making margins, I mean, it's not just about changing manufacturers.

I'm assuming they're gonna be shedding people and they're going to be, I don't know what, getting rid of other overhead, getting rid of their office space or something. They're gonna have to make other changes like that, not just ai, right.

Leah: I don't know. so sure that could be part of it, but I think.[00:05:00]

I think the smarter ones are looking at less at how they can shed costs versus what return on investment do they get.

Chris: Yeah.

Leah: From their investment into cost centers.

Chris: Yeah. And I'm also wondering if, like you mentioned aggregators, will there be a second wave? But it'll be brands who are like, we gotta sell this thing now.

If we don't, we're gonna be worth 50% as much this time next year, or we won't be around this time next year. So we have to accelerate that process and sell.

Leah: So I actually think there has already been a quiet second wave.

Chris: Okay.

Leah: I think that there are a lot of large sellers who have bought up. A lot of brands at basement prices.

Chris: Yeah.

Leah: To add to their portfolio. They're just not calling themselves aggregators and they're not announcing themselves loudly. But I think part of the reason we are seeing this consolidation of the industry is because it is actively being acquired by the successful [00:06:00] sellers already.

Chris: And nobody wants to talk about it as much.

Leah: Why would they, what's benefit do they have? Why would they tell you what they're doing?

Chris: I was just trying to think back through, there were companies sponsoring at Prosper Show that did do exits.

Leah: But it just, yeah, I would just say, it's the same with the real estate market, right?

When people are selling cheap that is the time to buy up and the ones that do that well are the ones that are going to be way ahead of the curve when economically things improve.

Chris: Yeah. Real estate's always the

Leah: adult weather. And I, I think a lot of it is already, I think a lot of that has already happened.

There may be some people who loudly enter this space.

Chris: Yeah.

Leah: But I, but I think it's already quietly happening and or happened.

Chris: I agree. And Prosper Show is good for lots of conversations. We did a couple new things. We did the cocktail event at MDS Inspire, which we haven't done before.

So it was new and interesting for us at a few different levels. We didn't have a booth this year, [00:07:00] but the conversations around ai, most of the exhibitor seemed like most of the booths were AI themed or had ai related text on the backdrops. But sellers doing AI appeals was of course a topic that we confronted.

I still see it only useful for rudimentary basic, straightforward stuff where sellers could probably do it themselves quickly and easily without necessarily using a lot of ai. And for nuance and complexity, we only really had one conversation where somebody said they fixed something or escalated something properly at Amazon with only ai.

Right. We only heard that once.

Leah: Yeah. I mean, I still, we've talked about this before and I maintain my stance. It's not a writing exercise, just sending in something well written. The amount of specific information that is required for an escalation or an appeal to actually be viable requires the seller to know [00:08:00] that information. And the majority of the cases that we work on, they don't know what information needs to be provided.

Chris: Right?

Leah: So if you're at the point where you're inputting all of the information required into AI and having it spit something out. You already could have appealed it yourself.

It's the cases where you don't know what is required or what Amazon needs to see, which is the majority of the cases that we work on, that AI is not really gonna help you because AI can't tell you this is what is needed here or provide, sometimes it'll just make up specific information, which is its own risk.

But, it's not just a matter of sending something well written or important sounding gibberish.

It's very specific information that Amazon is looking for and if you already have that information specifically to submit, sure. Put it into AI to have it spit out something pretty looking, but the majority of the people don't know what that information is, and without that information, you're just going to get a nonsensical, [00:09:00] useless appeal. It's made for you by ai.

Chris: My sense is that it's the people who are stuck, who don't know what to do, and they use it as a crutch. And that's where you get the generic content that Amazon knows.

You're guessing. It's kind of a way of flagging yourself as I didn't really know. I relied on tools to guess because I really didn't know what to do.

Leah: And it's the same when people send it to me. I can tell. Yeah. And I'm not looking at other people's appeals all day, every day like Amazon's investigators are.

Chris: But this is the first time I've heard people say. That they acknowledged, it's not a writing exercise. They are using AI for strategy, and we talked to that one person. I still haven't spoken to the seller. This was secondhand information.

Leah: Mm-hmm.

Chris: I'm gonna try to find the seller and find out what AI strategy appealed use they found, but, for a nuanced or complex case at least. But my sense is that sellers don't understand that in terms of using a AI for Amazon strategy. A lot of the strategy [00:10:00] is how you escalate things to certain people at Amazon and there is no AI for those people. Well, like would you have a different AI portal for each Amazon executive?

How to appeal to that person?

Leah: No, but also I think people forget that this is, aI is just taking content that it can find on the internet and spinning it back out at you. So, or just making stuff up, which it does also. So, there's a lot of bad advice on the internet on how to do this. So you're not getting, you're not getting the analytical partner that I think people think they're getting.

With ai, you're just getting regurgitated content. And like I said, if you are already giving. The content needed to appeal to ai, then yes, AI can write that for you, but the specifics are the important part presenting those specifics in a way that Amazon will read it is the important part. And I still see the majority of the ones that clients send us where I'm like, was this written by AI [00:11:00] are usually very long.

There's usually a lot of filler. There's usually a lot of extraneous information and I don't even wanna read the whole thing. So I am, I'm highly doubtful that Amazon's teams would be reading those whole things I meant to ask. So yeah, like you can use it as a tool. I'm not gonna say that AI can't be used as a tool.

'cause obviously it can be, but it can't be your entire strategy is just like tell AI to like appeal this for me. You need to have the specifics and you need to know what specifics you need in order for it to be effective.

Chris: Yeah, I kept wanting to talk to somebody, AI familiar in terms of why are these rewritten messages so long?

Why is there so much filler? I wanna figure that out at some point.

Leah: There's settings, but like, you

know,

Chris: okay.

Leah: It's just

Chris: because we see that in the, you know, summarize your problem. Somebody sends us an email and it's oh my God, this is miles long. Hard to understand.

Leah: Yeah, I think it's like if you don't really know what you're talking about, just kind of [00:12:00] make it winded to make it sound like

Chris: golden.

Leah: You know what you're talking about,

Chris: the Golden Shovel Award as my friends called it back at home.

Leah: Yeah. We've received things like that where it's like, this sounds like it should be saying something, but this actually does not say anything.

Chris: Yeah. Yeah.

Leah: Like we've discussed summaries we've received from clients where it just doesn't actually say anything.

Chris: It's kind of, yeah, sometimes unintentionally amusing. Well, why don't we close with you? You had various compliance conversations. I think that's kind of always a hot topic, but between the meetup we did a couple months ago or last month in New York and Prosper Show, are you detecting the same themes with people in terms of compliance flags?

Yeah. Is it still just the unsubstantiated. Kill claims on packaging? Were there any things that jumped out to you this year in Vegas?

Leah: Oh, you mean pesticide claims? Um, I would actually say

Chris: probably pesticide claims

Leah: down compared to other things.

Chris: No, I just mean, unallowable content on packaging, on listings.

Were [00:13:00] there any themes?

Leah: Yeah, that's always gonna be, that's always gonna be something when people don't understand the regulations. And again, it's different in every country. So what we're seeing a lot of right now, is people getting in trouble for international listings because they just either using the BUILD International Listing tool to push out the listing to every single country, not realizing the requirements for the product.

Chris: Yeah.

Leah: And requirements for the claims are different in each country or if they're even allowed to sell that product in that country. Seeing a lot more enforcement around Canada, interestingly, I'm assuming somebody in Canada started giving Amazon a hard time.

Chris: Probably.

Leah: But yeah, there's always people coming into new product areas or people who have been in product areas for a long time and just haven't gotten in trouble for it before, um, who are suddenly getting in trouble for saying, I know things that they're not allowed to say.

Chris: That's my favorite sentence. It's like, we never had problems with this before, so it must be Amazon making a mistake. And it's like, I've had to tell many people, you just never got caught for it before.

Leah: Yeah, no. I've had to tell many people that they've been [00:14:00] committing a federal crime for like a decade.

Chris: Perfect note to end on. That's great. That's great. Finish with federal crimes today. All right. Well safe travels to you and everybody, we thank you for listening in. Of course. If you weren't in Vegas again, was that last week or the week before? Two weeks, let's say weeks ago. Catch up with us.

Well, we're gonna be doing another meetup in New York pretty soon, so if you're in the northeast, get in touch with me about that. Otherwise, if you didn't see us in person recently, check back in with us. We got some new and exciting stuff coming up in April. So that'll be kind of a vague hint for some, some exciting things we got to announce in the near future.

Thanks again for listening. Thanks again, Leah. I'll talk to you again soon.

Leah: Bye bye.