Amazon has put Jack Nekhala through the wringer.
Since 2014, Nekhala and his business partner have sold a product through Amazon’s dominant online marketplace they called the “Bed Scrunchie,” a band that helps keep fitted sheets in place while you sleep. But two years ago, Amazon kicked Nekhala and his product off of the platform for dubious reasons the company has failed to fully explain. He was soon contacted by a woman on Chinese messaging app WeChat who said she could get his seller account restored—for a price. The woman had information about his account that only an Amazon employee would know. Insiders were selling knowledge to middlemen, who were using it to exploit sellers.
It was a window into a world of international bribery that would lead to convictions and jail terms for rogue Amazon workers. But Nekhala’s experience with account hijacking is just an aggressive example of the cascade of abuses Amazon inflicts on the online sellers that make its e-commerce platform run.
It starts with the fees Amazon charges sellers, which have grown so high that the company now takes around half of every dollar a seller earns on the site, according to research by my organization and others. New changes, not widely reported in the general press, have seen Amazon invent methods to withhold seller earnings for days or weeks longer than in the past, and otherwise handcuff sellers’ ability to manage their own cash flow, pay their workers, buy supplies, or otherwise afford what they need to run their business in a timely way.
Amazon uses a host of tactics to ensure that shoppers can’t find a better deal outside of Amazon.com.
There are other mundane ways Amazon squeezes and traps its sellers within a monopolized ecosystem. Its command over e-commerce allows the company to ratchet up extraction from sellers, raise prices for shoppers across the web, and make the experience of using Amazon.com measurably worse for everyone involved without consequence. Nekhala has also seen this firsthand, and he understands how this abuse makes everything more expensive for everyone. The “Amazon tax,” he calls it.
“They control too much. It’s scary,” Nekhala says. “It’s like a train that’s coming head-on, and if we don’t see this, if we don’t stop this train, it’s going to bulldoze everything that it goes through.”
While Nekhala’s anger and frustration at Amazon is especially pointed, it’s far from unique. Three years after the U.S. Federal Trade Commission and 19 states sued Amazon over its monopolistic abuse of Amazon’s millions of third-party sellers and shoppers, sellers say that ever-increasing fees and new changes to Amazon’s internal policies have made things far worse. Amazon’s planned changes have triggered a daylong boycott from some of the site’s most prominent sellers, along with a torrent of seller vitriol on Reddit, X, and other online public squares.
SOME OF AMAZON’S PLOT TO BULLY SELLERS and raise prices for shoppers has been public for years. The federal lawsuit described a Russian nesting doll of monopoly power that spanned Amazon’s retail business and its web of connected services.
Amazon’s monopoly “flywheel,” as the lawsuit states is the company’s preferred term, goes like this: Amazon uses its Prime membership program to lock shoppers into the platform, with around 1 in every 2 dollars spent online on Amazon.com (the share is even higher for some categories like books and home goods). Small businesses looking to sell online must sign up with Amazon to find customers; when they do, they get nickeled-and-dimed by Amazon’s ever-increasing fees.
According to the lawsuit and sellers, Amazon increasingly requires sellers to buy services in order to be visible in shoppers’ search results. That includes Amazon’s in-house logistics program Fulfillment by Amazon (FBA), which stores and ships sellers’ goods. Fees for FBA have increased over the past three years; Amazon added a new, $3.50-per-package fee to make up for fuel costs.
Then there are the pay-per-click advertisements that increasingly crowd out organic search results on the site. They have become both more expensive and more necessary for sellers to have any chance of reaching customers.
With nearly 50 percent of every sale going out in fees, sellers must raise prices to maintain their margins and turn a profit. Earlier this month, the group Million Dollar Sellers found that 60 percent of the nearly 200 Amazon sellers it polled had raised their prices in response to Amazon’s fees and policy changes.
According to both the federal lawsuit and a similar suit filed by California Attorney General Rob Bonta in state court, Amazon uses a host of tactics to ensure that shoppers can’t find a better deal outside of Amazon.com. These include contractual clauses with sellers that effectively require them to never sell an Amazon-listed product for less on other websites. Bonta’s lawsuit described Amazon’s actions as a conspiracy between it and rival retailers, and revealed stunning price increases across the internet.
One seller, who spoke anonymously to protect their business, describes the experience this way: A while back, they lowered the price of one of their products on their own direct-to-consumer website, but forgot to also lower the price of the same product on their Amazon listing. The next day when they checked their Amazon store, they found the product’s price hidden from public view until it was in a customer’s cart. Once in the cart, the product was the exact price listed on their own website. Amazon found and matched the lower price, presumably using AI-powered web crawlers, without the seller’s input or consent.
That story detailing Amazon’s algorithmic price-fixing startled me, but the seller said they weren’t surprised. “You agree to that when you become a seller,” they say. But while sellers may be resigned to that treatment, a new procedure that amounts to a cash flow capture has pushed some to revolt.
Early this spring, Amazon announced that it would change when sellers got paid from a sale. In the past, sellers got paid after a customer bought their product, which makes sense because that’s pretty much how commerce works everywhere. Under Amazon’s new policy, however, sellers now get paid at least one week after a product has been successfully delivered to the customer. Sellers say the new system (called “DD+7,” or delivery date plus seven days) often delays the revenue from a sale for far more than a week; one seller questioned whether the program should be called “DD+40,” after Amazon withheld their revenue for weeks.
The massively delayed payments have caused chaos for sellers. On forum after forum, sellers say the policy imperils their business, particularly for those who don’t have a pile of cash reserves to draw from. Payroll becomes harder to meet, suppliers don’t get paid, and the whole business begins to buckle.
“We can only operate for so long without being paid,” one seller wrote on the popular Amazon Seller Central message board. Another called the change “absolutely the worst policy in the history of Amazon … counter productive, counter seller friendly, and almost completely unmanageable.”
Why would Amazon make this change? Sellers say there are two obvious reasons. First, it pushes sellers to use Amazon’s fulfillment service, FBA. Products get reported as delivered faster when they’re delivered by FBA than by UPS or the Postal Service. That starts the DD+7 clock sooner, which means sellers get paid faster. It’s another tool Amazon is using to force its captured sellers to use its own logistics business.
The cash flow capture is also very likely lucrative for Amazon, sellers say. If Amazon put all of the $575 billion it made globally from third-party sales into a high-yield savings account for an additional week, it would generate millions at a minimum while keeping its sellers from generating additional revenue in the same way. This is how insurance companies make their money, by investing the “float” from premiums before they have to pay out claims. That is essentially what is happening under the DD+7 policy, sellers say: a forced transfer of wealth from third-party sellers directly to Amazon.
About a month after the DD+7 announcement, Amazon sprang another surprise on sellers. Most sellers who buy the increasingly mandatory pay-per-click ads for their products do so using credit cards. This allows sellers to manage cash flow and take advantage of credit card issuers’ cash-back benefits, which can mean thousands of dollars sent back to sellers to help pay workers and grow their businesses. But in April, Amazon announced it would instead force sellers to pay for advertising directly from their sales revenue. No more cash flow float for sellers, and no more cash back from credit cards. Instead, Amazon takes ad payments straight from sales—revenue already delayed for days or weeks by the DD+7 policy change.
The uproar arrived quickly. Amazon was forcing sellers to buy ads for visibility, then forcing them to pay out of pocket. “Between the DD+7 transition and not being able to pay by credit card, talk about a massive blow to cash flow,” one seller wrote on a Seller Central forum. “I’m not sure this small business will survive this if implemented across the board,” another said.
The Million Dollar Sellers group quickly organized a one-day advertising boycott. Amazon chose to delay implementing the new ad spend policy, but as of this month, it appears to be in place for many sellers. The Save Our Sellers survey found that the policy change had hit more than half of the businesses surveyed.
ONE QUESTION EMERGES FROM THESE PINGS on small sellers: If the experience is so bad, and the profits increasingly difficult to come by, why haven’t sellers left Amazon en masse for a better platform with lower fees, and where sellers could choose the warehouse and delivery service that makes the most sense for them and their customers?
According to the Save Our Sellers survey, some sellers they polled are increasingly selling direct to consumers, or are joining the upstart TikTok Shop to look for shoppers there. Many are simply leaving e-commerce altogether, as Amazon’s new policies and fees greatly favor already-wealthy and sizable sellers who are more easily able to absorb those hits.
Yet sellers searching for Amazon off-ramps largely haven’t been able to inject significant competition into online retail. Walmart, the world’s largest brick-and-mortar retailer, accounts for less than 10 percent of the online retail market, compared to Amazon’s 56 percent share in mid-2025. While it has certainly grown as a platform, TikTok Shop today accounts for just 2 percent of online retail; what’s more, sellers there say shoppers often discover products on TikTok but ultimately buy them on Amazon. According to the most recent Marketplace Pulse annual report—considered the authority on the online retail industry—nearly 93 percent of all online sellers they polled still operated on Amazon.com.
This gets to the heart of the FTC’s lawsuit. Amazon’s lock-in of Prime members—around 200 million in the U.S. alone—keeps sellers on the site regardless of the burdens they bear. And Amazon’s mandatory algorithmic price-matching and other tactics keep rival platforms from gaining share through lower prices. It doesn’t matter how entertaining a TikTok Shop livestream might be or how many big-name marketplace options might exist; the market doesn’t seem able to solve the Amazon problem because sellers simply can’t afford to leave the platform.
The federal lawsuit is headed for trial next March, as long as the FTC doesn’t settle as it has in other major cases, and the states stay the course. While there are major state cases winding through the courts as well, including Bonta’s lawsuit and others in Arizona and Washington, D.C., only the federal case can deliver what will likely be necessary to truly and finally inject needed competition in the online retail industry: significant changes to the structure, and not just the behavior, of Amazon itself.
