Overview

Amazon Basics, the e‑commerce giant’s private‑label line, is now generating roughly $2.7 billion in global sales. Jungle Scout’s latest survey shows third‑party sellers are feeling a “triple squeeze” from higher fulfillment fees, aggressive Amazon‑owned competition, and low‑cost overseas rivals. The convergence of these forces is compressing margins and forcing sellers to rethink their strategies.

Key Points

• Revenue scale — Amazon Basics offers about 4,300 SKUs across more than 21 categories, with an average price close to $30, driving $2.7 billion in annual revenue.
• Monthly sales split — U.S. shoppers contribute over $180 million each month, while Europe adds another $35 million, pushing total monthly sales past $215 million.
• Price‑increase backlash — In 2024, 67 percent of third‑party sellers raised prices, mainly due to rising FBA fees, yet 59 percent of those sellers reported lower profitability after the hikes.
• Competition as top concern — Almost half of surveyed brands named intensified competition—especially from Amazon’s own label and cheap imports—as their biggest obstacle.
• Margin compression — Roughly one‑third of sellers described a “downward spiral” where higher fees and undercutting overseas products left little room for profit.
• Defensible niches still viable — About 75 percent of brands maintain acceptable margins when they focus on differentiation rather than price wars.

How the Triple Squeeze Works

1. Private‑label expansion — Amazon continuously adds its own products; for example, a new line of kitchen gadgets appears alongside identical third‑party listings, receiving preferential placement in search results.
2. FBA fee hikes – Fulfillment fees rose by an average of 7 percent in 2024; a seller of Bluetooth speakers now pays $4.20 per unit instead of $3.90, forcing a decision to absorb the cost or raise the retail price.
3. Overseas cost advantage – Manufacturers in Southeast Asia can produce a standard silicone spatula for $0.80, allowing Chinese sellers to list it at $5.99, undercutting both Amazon Basics (priced at $7.49) and U.S. third‑party offers.