From margin erosion to channel conflict, here’s what senior leaders are grappling with on Amazon right now…
At our latest Amazon roundtable, we asked a simple question; “Where do the first pressure points typically appear as Amazon scales?”
As our CEO Andrew Banks says, what followed was one of the most commercially honest conversations we’ve heard in a long time.
Because while many brands are seeing their revenues grow?
The dynamics beneath, from profitability to promotions, are becoming more and more complex; and tougher and tougher to manage.
Here are the themes that came up again and again – let us know which resonate with you…
Margins are under fire
Almost every brand in the room agreed that their margins are under more pressure than ever before.
And though their top-line revenues may be increasing, their profitability just isn’t keeping pace.
This is a challenge with lots of layers:
- Holding price on Amazon.
- Managing promotional pressure.
- Navigating increasingly cost-conscious consumers.
- And balancing expectations across multiple retail channels.
And that means that margin is fast becoming a central commercial challenge for brands.
Our take? Margin protection needs to be designed into your Amazon strategy from the very outset, not recovered later through optimisation.
Channel conflict is getting more complex
Amazon isn’t on its own now – there are new marketplaces entering the mix all the time and existing ones continuing to grow.
This leaves brands needing to constantly rethink how each channel fits into their wider strategy, with the issue not just being where to sell but also how to define the role of each platform, avoid creating conflicts between channels and building a strong strategy that won’t introduce new pressures as things evolve.
Our take? The brands that will scale successfully through 2026 and beyond will be the ones who define clear roles for each channel early, rather than reacting to conflict once it appears.
Category leadership brings new challenges
Being the category leader should be a position of strength – but in slower-growth categories, it can actually create a different kind of challenge.
Why? Because when you already hold significant market share:
- Growth becomes harder to achieve.
- Margin becomes harder to protect.
- And expectations remain high.
And the thing is, this is a challenge that becomes particularly topical when brands are entering Annual Vendor Negotiations (AVNs) – a time where both their performance and their future potential are under scrutiny.
Our take? When growth slows, brands need to shift the focus from share capture to tight margin discipline and strategic defence.
Where Amazon sits in the business is still unresolved
One of the most revealing insights?
There’s still no consistent answer to where Amazon sits within an organisation.
Is it:
- A digital function?
- An ecommerce channel?
- A sales responsibility?
Our expert take? In reality, it’s often all three.
And the friction between these teams is frequently where operational strain first appears – but it’s also where growth can be unlocked when alignment is achieved.
Our take? Amazon needs clear ownership and cross-functional alignment combined, because performance sits at the intersection of all three teams.
Promotions are becoming a structural challenge
Promotions have always been part of Amazon but, as the frequency and intensity increase, it’s creating a loop that many brands say they’re struggling to manage.
Currently, brands are reporting something of a vicious cycle where, with Amazon encouraging lower prices during promotions:
- Other retail channels then match those prices.
- Amazon then sees those lower prices and pushes further.
- And the cycle continues…
All of this can easily turn what started as a promotional tactic into a structural pricing challenge; one that impacts every channel, every retailer and every negotiation – and one which only compounds over time.
Our take? If promotion becomes your default lever, it stops being a tactic and starts eroding your pricing power – and that often means across every channel, not just Amazon.
The Bottom Line
If these pressure points feel familiar? You’re definitely not alone.
It’s truer than ever before that scaling on Amazon is about managing a whole range of increasingly complex commercial pressures, from margin and pricing to channel strategy and internal alignment.
But while these challenges are significant, they’re not insurmountable – not with commercial clarity, rigour and joined-up thinking across the brand.
If you’d like to learn how our expert team can guide you to navigate them smoothly, effectively and with scale-achieving success, we’d love to chat – get in touch today.