Amazon's top sellers are consolidating as AI tools reshape how merchants compete
Amazon's seller base is shrinking while the largest merchants capture more traffic and sales. New seller registrations fell 44% year over year in 2025, and the number of active sellers declined overall, according to data from marketplace analytics firm Skai.
The consolidation is creating winners among established merchants. The number of sellers generating more than $100 million in gross merchandise value rose to 235 from just 50 in 2021.
Traffic per seller has increased 31% since 2021 despite the smaller seller base, meaning the remaining merchants are reaching more customers.
AI tools are becoming essential for visibility
Sellers are investing heavily in generative AI to optimize product listings and secure placement in Amazon's AI-driven search and recommendation systems. One service provider managing over $1 billion in marketplace advertising spend said AI-optimized listings can increase gross merchandise value by up to 80% and boost unit sales by 75% within two weeks.
Sellers do not yet see large language models reducing traffic to Amazon. Most purchases still happen directly on the platform, even as AI tools help customers evaluate products.
Retail media advertising spending accelerates
Sellers are increasing advertising budgets on Amazon's retail media network, which saw spending jump 33% year over year in the fourth quarter of 2025. The sector could reach $108 billion in 2026, up from $37 billion in 2021.
Amazon controls about 79% of the retail media market, with Walmart trailing at roughly 8%. Despite 277 retail media networks now operating, Amazon's dominance remains unchallenged.
Pricing pressure hasn't hit yet
Many sellers have not raised prices despite higher oil and shipping costs. Merchants said they are absorbing cost increases because they fear losing market share if they pass expenses to customers.
Several sellers acknowledged growing uncertainty about the broader economy but said they would only consider price increases if cost pressures persist.
Delivery speed and price remain critical
Amazon improved Prime delivery speeds for the third consecutive year in 2025 and continues expanding its Amazon Now ultra-fast delivery program. Price and delivery speed remain the primary drivers of e-commerce growth.
Referral fees continue to concern sellers, typically starting at 15% and increasing with additional services. Yet merchants stay on Amazon because its large customer base drives significantly higher sales than competing platforms.
For sales professionals selling on Amazon or similar marketplaces, understanding how AI for Sales tools reshape competition is increasingly important. The AI Learning Path for Sales Representatives covers how to use these tools effectively.
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