Switching to Amazon As a D2C Merchant in 2025

Hey 👋

Over the years, Amazon’s tried to become more appealing to merchants.

This year, they’ve actually made some controversial changes for consumers - Amazon doubled down on ads, with Prime Video becoming infested with them, and Prime’s “Try Before You Buy” was removed 😬 

While it looks like Amazon is constantly taking L’s, it’s still worth asking ourselves the question - is making the switch worth it now? 🤔 

This post will make that decision easy for you. We’ll cover how Amazon’s been treating ads, how they’re mostly a cash cow for Bezos, the “Try Before You Buy” removal, why most merchants are still addicted to the platform, a case study, and why you should or not switch to Amazon 😁 

Let’s get into it 🔥

1. Amazon Prime Video Ads 👀 

Prime Video is going all-in on ads this year — and what started before with just 2-3.5 minutes of ads per hour has now become an “adpocalypse” 😬 

While these new features look pretty questionable for consumers on paper, in practice they may not feel as “in your face” as they seem. For merchants, this means tons more competition, as every brand fights to pop up during someone’s all-night binge. 😬

I mean, you could probably imagine the faces of people when they see this message:

These are the features confirmed to be coming in 2025, promised to advertisers:

1️⃣ Shoppable Carousel Ads — anyone can scroll through products in the middle of watching their favourite show

2️⃣ Pause — ads that pop up when you hit pause

3️⃣ Brand Trivia — fun facts about brands during your binge

Prime Video’s CPMs will be in the low-to-mid $30 range, a price way lower than competitor streaming platforms (like Netflix and Disney+).

These new forms of ads on Prime Video will bring a lot of clutter — that means shorter attention spans and your ad budget might just get a lot pricier as bids inflate…

But if Amazon pulls this off without backlash, it’ll be a double-edged sword for us merchants. Yes, it’s another expensive ad platform to budget for — and it’s also a massive opportunity to hook potential lifelong customers 😄 

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2. Amazon Ads Are Bezos’ Cash Cow 🐄 

A 7-figure seller on Reddit wrote a pretty productive rant-analysis on why Amazon will have record cash flow & stock price, and he actually dropped a few truth-bombs.

The original poster spoke about how Amazon’s new FBA fees are like a robbery — they’re forcing merchants to use their “voluntary” logistics program, which costs 25-50 per box just to ship inventory to their warehouses.

And if you dare to keep low inventory, it’ll be $0.89/unit extra as a penalty fee for not keeping sufficient stock, especially for high-demand items 😬 

But merchants are literally hooked on Amazon, for this there are 2 main reasons:

1️⃣ Logistics Blackmail

“Buy with Prime” is too good to give up. Amazon’s shipping speeds and Prime trust just crush “DIY” fulfillment, and even with the fees, losing Prime badges means losing like 70% of sales.

2️⃣ Ads are Like Crack

The original poster mentions that Amazon’s ad system is rigged, with suggested bids being 2x higher than what actually works. He was burning $500/day on ads just to stay visible, but if he stopped — his listings would just vanish 😅 

The irony is that Amazon forces sellers into their logistics ecosystem, which cuts out UPS & FedEx, meaning they control every shipment. They then inflate ad bids, which turns merchants into cash cows, and that funds Prime Video’s NFL deals.

Finally, they penalize low inventory, which forces overstocking, and because they have a literal monopoly on merchants, Amazon can just increase storage fees — cause they know merchants won’t just give up and move away from Amazon so easily 😭

Let’s now move on to a very controversial move Amazon did last month.. 😬 

P.S. — Want to use Reddit to grow your brand? Check out our Merchant’s Guide to Reddit in case you missed it 👀

3. “Try Before You Buy” is Gone 💀 

As of 31st of January this year, Amazon axed Prime’s “Try Before You Buy” feature — which was something many brands leaned on for conversions.

Amazon’s spokesperson Maxine Tagay said that the company discontinued this service because it only worked for a “limited number of items”, and that customers have been using AI-powered features, like virtual try-ons and personalized size recommendations, to decide on what to buy.

CNBC also pointed out that the removal of “Try Before You Buy” also comes after years of cost-cutting at the company, and all of this honestly makes sense. However, this is a slight red flag, showing potential and existing sellers on Amazon that they are not afraid to remove services if they are not deemed to be profitable 😬 

On the flipside though, many customers on Reddit mentioned that TBYB was a great service for shoes, so good to the point that many were abusing it — hence the 30% return rate for “Try Before You Buy” products compared to the 15% on regular items.

We as merchants need to know that Amazon is a big corporation, and we have no control over what they decide to keep or axe, with TBYB being a Prime example (get it?) 😂 

Let’s cover a cool case study of a brand integrating with Amazon (and succeeding) 👀

P.S. — Check out our January eCom Recap in case you missed it, we covered everything from Trump’s Tariffs & Memecoin to Zuckerberg putting an end to fact-checking 👀

4. Amazon Case Study - Shokz 🎧️ 

Shokz, a premium headphone brand faced a pretty common problem in the DTC space — scale or control? They went deep into Amazon’s ecosystem, and there are a few lessons we can learn from their case 🤓 

In 2024, Shokz activated Buy With Prime on their US DTC site while keeping their store on Amazon up and running — basically a hybrid strategy. The main goals were to leverage Prime’s massive market for customer acquisition, delivery speeds and logistics, pretty much everything Prime was good for.

In result, Shokz got 60% faster delivery, 9.3% increase in new-to-brand customers (82% of Buy with Prime orders were from first-time site visitors), and a 51.7% surge in Buy with Prime orders during Prime Big Deal Days 😮 

Along with the above, they also used Amazon’s Multi-Channel Fulfillment (MCF) to manage DTC and Amazon orders from one big pool, making logistics super simple, and they displayed their Amazon reviews on their main DTC site, which also boosted CR% massively.

As for the pitfalls — Prime members checkout through Amazon accounts, so Shokz lost customer data from all those sales, margins took a hit because of the Buy With Prime transaction fees (15-25%), they became dependent on events like Prime Big Deal Days & Prime Day for revenue spikes, and finally — some shoppers now preferred buying via Amazon, rather than through their main DTC site..

So, was that all worth it for Shokz? 🤔 

It absolutely was — their premium pricing (products start at $129) offset Amazon’s fees, Shokz used Amazon as a top-of-funnel tool, redirecting buyers to their D2C site post-purchase with discounts, and with that they avoided over-dependence on Amazon.

This hybrid strategy works for you if your brand is in a similar situation — if you have a margin buffer and plan to own customer relationships somewhere else.

Now, let’s lay it all out simply - should your brand switch to Amazon? 🔥

5. Should You Switch To Amazon? 🤔 

Amazon really isn’t a “yes” or “no” decision — it’s more like a “how much?”

Here are the questions you need to ask yourself from the perspective of your brand before you consider working with Amazon:

1️⃣ Can Your Margins Survive The Fees?

If your product sells for $50 for example, and Amazon takes a referral fee of 15% (pretty common for many categories), that’s $7.50. If you use FBA, additional fees might add $5-10, depending on size & weight.

Advertising could add another $5-10, and in total the fees could range from 25%-40% depending on all of those variables — this isn’t including new advertising channels on Amazon, like the upcoming Prime Video ads.

To net even 15-20% profit after all costs, you need to make sure your product pricing accounts for those fees.

2️⃣ Are You Ready To Lose (Some) Control Over Customer Relationships?

Amazon owns customer data, so building a direct relationship with your shoppers may be harder. Shokz worked around this by redirecting Amazon buyers to their D2C site, and you can do the same and even more — like using packaging inserts, QR codes, post-purchase emails, the list goes on & on.

3️⃣ Is Your Product Prime-Proof?

Prime shoppers want speed, convenience, and value — these are everyday essentials, impulse buys, and items where reviews matter a lot (like tech & makeup, for example). More expensive products may work worse in Amazon’s “buy now, think later” environment (but Shokz did it, so it isn’t impossible).

4️⃣ Do You Have An Exit Plan (or need one)?

Relying heavily on Amazon means you lose agency as a brand. If their policy changes, you’re pretty much screwed (this also applies to features like TBYB, which we covered earlier) — that’s why diversifying sales channels and using Amazon more for customer acquisition can mitigate this risk.

When it actually comes down to what you stand to gain, ask yourself these questions:

1️⃣ Want Access To A Huge Customer Base?

Offering your products up on Amazon can potentially invite hundreds of thousands of shoppers to your brand and it’s products — you’ll also “hijack” Amazon’s trust, making potential new customers already have a base level of reliability when purchasing your goods.

2️⃣ Do you Want Efficient & Fool-Proof Logistics?

Using FBA can make your logistics stress-free, with fast & reliable shipping coming by default — which is also crucial for overall customer satisfaction.

3️⃣ Want Better Sales Performance With No Effort?

Selling on Amazon gives you access you Prime members, which on average spend twice as much more than non-Prime shoppers. This increases CR% and sales volume by a lot, and also the convenience of being able to buy your products in just one click encourages impulse buying, too.

All in all, if your brand can maintain healthy margins, and you already have a good plan on managing customer relationships & a solid way to funnel Amazon shoppers to your DTC site — working with Amazon can be very worthwhile 😁 

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Daniil from ECORN