Are Amazon Third-Party Seller Problems Increasing in 2025?

The challenges of selling on Amazon 3P are nothing new, but 2025 is shaping up to be one of the toughest years yet for third-party (3P) sellers. From increased competition to stricter policies, many sellers are struggling to keep their businesses running smoothly. If you’re an Amazon seller, you may already be feeling the pressure. But what exactly is happening, and how can you stay ahead?

What Are the Major Challenges for Amazon 3P Sellers in 2025?

The latest scenario in the evolution of the Amazon marketplace simply points to deterioration in the capability of independent sellers to make ends meet. Below are the primary problems many 3P sellers have faced this year:

1. Increased Competition from Big Brands on Amazon

The Amazon marketplace is still not only promoting its own private-label products but also those of major brand names. This means that smaller 3P sellers must fight harder for visibility and sales. Direct partnerships between major brands and Amazon are further squeezing independent sellers out of top-ranking positions.

The first-party (1P) business of Amazon has been developing, thus requiring more and more products from a brand directly instead of through the offer of third-party sellers. Instead, this puts even more pressure on independent sellers as Amazon usually undercuts pricing and then pushes 1P listings high up in search results.

2. Stricter Compliance and Policy Enforcement

Amazon has tightened up on compliance rules in the past and consequently has had to suspend more accounts and remove more listings. The main issues would include:

• Intellectual property complaints (even if unfounded)
• Restricted product violations
• Fair pricing policy enforcement
• Sudden ASIN suppressions due to vague policy violations

Now, Amazon’s AI-driven enforcement is catching more sellers unawares. Quite frequently, there are automated suspensions without clear explanations, making it hard to challenge.

3. Rising FBA Fees and Storage Costs

Fulfillment services by Amazon are still popular, although costs have skyrocketed. This consists of storage fees for high inventory levels, costs specifically for aged inventory, and higher referral fees all eating into profit margins.

Further on, the FBA restocking limits keep changing leaving many sellers trying to find the perfect balance of inventory levels. Overstock also results in high storage fees whereas understock results in opportunity loss in sales.

4. Counterfeit and Hijacked Listings

Unauthorized resellers and counterfeit products remain a major concern. Many legitimate sellers are seeing their listings hijacked, leading to lost revenue and negative customer experiences.

Amazon has introduced programs like Transparency and Project Zero, but hijackers are still finding ways to manipulate listings. Some sellers have reported instances where their authentic listings were suddenly overridden with inaccurate details or even merged with counterfeit versions.

5. Tougher Advertising Competition

Advertising costs on Amazon are soaring, with PPC (Pay-Per-Click) bids increasing due to more sellers fighting for top placements. Without an effective advertising strategy, it’s becoming difficult to maintain profitability.

A major shift in 2025 is the increased reliance on external traffic. Amazon is favoring sellers who bring in off-Amazon customers via Google Ads, social media, and influencer collaborations.

6. Limited Seller Support and Communication Delays

Amazon’s seller support system has always been a pain point, but in 2025, delays and lack of clear communication have worsened. Many sellers report waiting weeks for case resolutions, especially for complex issues like account suspensions and ASIN reinstatements.

How Amazon Agencies Can Help 3P Sellers Navigate These Challenges

Given the increasing challenges, many sellers are turning to Amazon agencies like AMZDudes to stay competitive. Here’s how an experienced agency can make a difference:

• Account Management: Ensure compliance and avoid costly suspensions.
• Advertising Optimization: Maximize ROI with data-driven PPC strategies.
• Listing Protection: Prevent hijackers and counterfeit issues.
• Inventory Planning: Reduce storage fees and improve logistics.
• Appeals & Suspensions: Expedite reinstatements and handle policy disputes.

What Should Amazon 3P Sellers Do Next?

1. Review Your Listings and Policies

Check that all your listings comply with Amazon’s latest policies. Address any potential violations before they become bigger problems.

2. Monitor Competitor Strategies

Watch how Amazon and big brands in your niche are positioning their products. Adjust your pricing, promotions, and content strategies accordingly.

3. Invest in Advertising Wisely

Focus on ad strategies that generate profitable sales, rather than just increasing traffic. Work with an agency to refine your PPC campaigns.

4. Strengthen Your Brand

Utilize Amazon’s Brand Registry, A+ Content, and Enhanced Brand Content (EBC) to make your listings more attractive and protect them from hijackers.

5. Partner with an Amazon Agency

If handling all these challenges alone feels overwhelming, an experienced Amazon agency can help you scale and protect your business.

Final Thoughts

The problems for Amazon 3P sellers are growing in 2025, but they’re not impossible to overcome. By staying informed, optimizing your strategies, and leveraging expert support, you can keep your business competitive in an ever-changing marketplace.

Need expert help? AMZDudes provides Amazon ad services, account management, and wholesale solutions tailored for 3P sellers. Contact us today to safeguard and grow your Amazon business.