Overview

Amazon's Vendor Central program is under increasing pressure in 2026 as the platform tightens its profitability requirements and raises the cost of doing business for wholesale brand partners. Vendors are contending with rising ad costs, resistance to price increases, and the looming threat of product delisting — forcing many to rethink their entire Amazon strategy. For third-party sellers, these shifts present both competitive risks and potential opportunities.

What's Changing

• Advertising costs are climbing — Greater competition across Sponsored Products, Sponsored Brands, and DSP is pushing cost-per-click higher and eating into already-slim vendor margins.
• Tighter profitability thresholds — Amazon is reportedly pulling purchase orders or surrendering the Buy Box on products that don't meet internal margin benchmarks, leaving vendors with little negotiating leverage.
• Price increase resistance — Despite rising input costs from tariffs and inflation, Amazon is pushing back on wholesale price adjustments, creating a margin squeeze vendors can't easily pass to consumers.
• Delisting risk — Products Amazon deems unprofitable face sudden catalog removal, disrupting brands that rely heavily on the platform for distribution.
• Factory-direct competition — Manufacturers with lower cost structures are investing aggressively in advertising and undercutting traditional US-based brands on price.

The Vendor Relationship Has Fundamentally Shifted

The partnership between Amazon and its Vendor Central brands has evolved from a collaborative growth model into an increasingly transactional arrangement. Where Amazon once worked with vendors to develop product categories, the platform now prioritizes its own contribution margins above all else. Vendors report that Amazon will stop purchasing inventory or hand the Buy Box to third-party sellers when wholesale terms don't meet its profitability targets.

This pressure extends into organic visibility as well. Amazon's search and recommendation algorithms increasingly favor higher-margin products, which means vendors must either accept thinner economics or watch their rankings slip. At the same time, Amazon's growing advertising business means vendors face mounting expectations to invest in paid placements even as their core wholesale margins shrink.