Why Single-Channel Amazon Brands Are Losing Ground in 2026

Five years ago, building a business exclusively on Amazon was a viable strategy. FBA handled logistics. PPC drove traffic. Organic ranking rewarded good products. A lean team could run a seven-figure brand from a laptop.

That math has changed. FBA fees have increased every year since 2020. Advertising costs have roughly doubled. Competition in most categories has intensified as more brands, including major CPG companies, have moved onto the platform. And Amazon's algorithm changes can redistribute ranking overnight in ways that are completely outside your control.

None of this means Amazon is a bad channel. It is still the largest e-commerce marketplace in the U.S. by a wide margin, and brands that execute well continue to grow. But brands that rely on Amazon as their only channel are carrying concentration risk that gets more dangerous every year.

The Case Against Amazon-Only

Fee Compression

Amazon's take rate (the total percentage of revenue Amazon collects through referral fees, FBA fees, and advertising) has grown from roughly 27% in 2019 to over 50% for some categories in 2026 when you include advertising spend. That number will keep growing. Amazon is a publicly traded company under pressure to grow revenue, and its marketplace sellers are a primary source of that revenue growth.

For brands operating on 65% gross margins, a 50% take rate leaves 15% for everything else: team, operations, product development, customer acquisition. That is tight. For brands on 50% gross margins, the math stops working entirely without either raising prices or cutting costs somewhere else.

Algorithmic Risk

Your Amazon ranking is controlled by an algorithm you do not own. A competitor's aggressive launch campaign can displace you. A review manipulation attack can tank your rating. A false counterfeit claim can get your listing suspended. A category restructuring can change your competitive set overnight.

We have managed brands through all of these scenarios. They are not theoretical risks. They happen regularly, and when they happen to an Amazon-only brand, revenue drops to zero until the issue is resolved. When they happen to a multi-channel brand, revenue drops on one channel while the others continue.

Customer Ownership

On Amazon, you do not own the customer relationship. You do not get their email. You cannot retarget them off-platform. You cannot build a direct line of communication that survives independent of any marketplace. Your "customers" are really Amazon's customers who happened to buy your product. If Amazon decides to launch a competing private label product in your category, those customers are just as likely to buy it as yours.

Brands that sell direct-to-consumer alongside Amazon build an owned audience that no platform can take away. That audience becomes a hedge against algorithmic risk and a source of higher-margin revenue.

Where to Expand First

The answer depends on your product, your margins, and where your customers already are. Here is how we typically advise brands in our portfolio:

DTC Website (Shopify or Similar)

This should be the first expansion for most brands. A DTC website gives you customer data, email addresses, and a higher-margin sales channel. You control the brand experience end-to-end. You can test pricing, bundle offers, and subscription models that Amazon's marketplace does not support.

The misconception is that DTC requires a massive investment. It does not. A well-built Shopify store with 10-20 hero products, a functional checkout, and basic email marketing can be operational in 4-6 weeks. You do not need to build a media empire. You need a clean storefront that converts the traffic you send to it.

TikTok Shop

If your products are visual, have broad appeal, and hit the $15-60 price range, TikTok Shop is the highest-growth opportunity available right now. The platform is still in its land-grab phase. Creator acquisition costs are lower than they will be next year. And the brands that build affiliate networks now will have a significant first-mover advantage as the platform matures.

TikTok Shop also drives awareness that feeds your Amazon business. We consistently see brands that launch on TikTok Shop experience a 10-20% lift in branded search volume on Amazon within 60 days. The two channels are not competing. They are feeding each other.

Meta and Google Ads

Running paid advertising on Meta and Google to drive traffic to both your DTC site and your Amazon listings gives you diversified customer acquisition. If Amazon CPCs spike in your category (and they will, during Q4), you have alternative channels that can pick up the volume. If Meta's algorithm changes reduce your DTC traffic, Amazon absorbs the demand.

Walmart Marketplace

Walmart's marketplace is smaller than Amazon but growing fast. If your products sell well in Walmart's core demographics (value-oriented, family-focused, suburban), the marketplace expansion is relatively simple. Catalog setup mirrors Amazon's, and Walmart's advertising platform, while less mature, is significantly cheaper on a per-click basis.

How to Expand Without Losing Focus

The biggest risk of going multi-channel is spreading yourself too thin. A brand that runs a mediocre Amazon account, a neglected Shopify store, a dormant TikTok Shop, and sporadic Meta ads will underperform a brand that runs Amazon well and nothing else.

The right approach is sequential, not simultaneous:

Master Amazon first. Get your listings, ads, and operations running at a high level. This is your foundation and should be generating enough profit to fund expansion.
Add one channel at a time. Launch your DTC website or TikTok Shop. Get it to break-even or better before adding the next channel.
Hire or outsource for each channel. Every channel requires dedicated attention. "We will just post our Amazon listings on Shopify too" is not a strategy. Each platform has different optimization requirements.
Measure holistically. Track total revenue across all channels, not just individual channel ROAS. A Meta ad that looks unprofitable on its own might be driving $50K/month in Amazon sales through branded search lift.

The Bottom Line

Amazon is not going anywhere, and it should probably remain your largest channel. But the brands that thrive over the next five years will be the ones that use Amazon as a foundation, not a ceiling. Diversification is not about abandoning what works. It is about making sure that no single platform decision can threaten your entire business.

If you are ready to expand beyond Amazon, or if you want to make sure your Amazon foundation is solid enough to build on, we can help you think through the strategy.