At the beginning of 2025, Amazon promised all sellers that there will be no increases to referral fees or FBA fees this year. That was a departure from Amazon’s stance in past years, and smart sellers were skeptical of that announcement—and sure enough, we did see several fee increases from Amazon.
Brands often focus on top-line growth metrics, but as Amazon continues introducing new and ever-complex fee structures, does your brand have the visibility into your bottom-line that you need? Additionally, Amazon has over 450 total transaction types for marketplace sellers.
Alongside these increases are hidden operational costs behind marketplace growth. Amazon sellers are facing four core buckets of margin leakage that will impact your business in 2026. These buckets are critical to your Amazon business—if you want to grow, you can’t afford to opt out of these tactics.
Kapoq sat down with Planetary Design CEO Jess Nepstad and Tiffany Serbus-Gustaveson of BWG Connect to talk about how to spot margin leakage with better visibility, get in front of it, and change the outcome for your business. (You can watch the full webinar here!)
Operations
The first bucket of potential margin leakage is operations—from low inventory and placement fees to shipment splits, the potential for loss is great. And if you continue with the status quo, you might never be aware of the leakage!
Do you know how much your operational performance is impacting your business compared to your advertising performance? For example, in one brand we looked at, their warehousing and FBA fees are about 22%, while their advertising and promotions make up about 17%. In many cases, your operational costs of getting product into Amazon and getting it shipped to customers are gonna be the same, if not higher, than what you’re investing in advertising.
FBA Challenges
FBA operations are a big bucket with the potential for margin leakage—including everything from placement fees to storage fees, to the time it can take for FBA to receive your inventory. This is especially relevant right now in Q4 where lead times are often 30, 40, or even 50 days.
The first challenge that some brands saw was in February 2025 when Amazon eliminated the partial shipment splits option to FBA. Amazon really wants sellers to take ownership over a lot of the logistics as part of FBA’s network, including the costs associated with that. So by removing that option, sellers are now stuck with either having a very complex operational system or paying placement fees—which are set to increase again next year.
Jess and the Planetary Design team decided to combat this by finding international partners, which helped speed up their time to FBA and time-to-Prime eligibility. With a solid strategy accompanying their robust use of Kapoq, they were able to expand to multiple international marketplaces, while still being able to track data across them all at once!
But it also involves using software and. Creating processes that give you visibility into each of these buckets that we are discussing so that you can actually get out of the situation you’re in and get ahead of it.
The best sellers on Amazon are already doing these things. They’re already avoiding placement fees. They have higher margins. That’s why they’re able to participate more aggressively in tentpole and year end events like Black Friday and Cyber Monday.
Warehousing and Distribution Fee Increases
After that, the next big change was to Amazon Warehousing and Distribution. Amazon has been pushing their new warehousing and distribution option on sellers very heavily for the last 18 months, claiming that it’s the solution to paying placement fees, having a complex FBA, or having long delays with receiving. Amazon will automatically feed your inventory from long-term storage into FBA.
But as we know, those promises behind low fees did not last long, with fee increases averaging from 13 to 26% for many brands in 2026.
Demand Planning
The last potential for margin leakage in your operations is in demand planning and forecasting. It was important for Jess and his team to be able to look at multiple scenarios to see what would happen if they kept pricing the same, or if conversion rates would take a hit if they raised prices, or how this would change their inventory position and how much cash they’d need to have on on hand.
They were able to run all of these scenarios within Kapoq to accurately forecast demand and make informed, responsive decisions. Having the visibility to look into these different opportunities and see what their business would look like if they didn’t have to pay low inventory fees or placement fees allowed Planetary Design to have a better sense of their actual bottom line.
Tariffs & External Costs
Of course, one of the biggest conversations among Amazon sellers in 2025 was United States tariffs, supply chain challenges, and the need to front load inventory.
Jess and his team made the decision to take the risk and front load inventory—he saw that other sellers were pausing their inventory purchases, and he knew that when demand increased later, it would be impossible to get product, which would cause you to be out of stock for even longer.
To avoid the impact of the US tariffs, they started pushing hard on a 3PL warehouse in the Netherlands, started a negotiation on a 3PL warehouse in Canada, and started looking into other countries’ marketplaces. Rather than solely relying on a tumultuous US-based business, they decided to expand to diversify both their Amazon business and their overall business.
Pricing & Promo Pressure
The next bucket of potential margin leakage is the pressure to lower prices and increase promotions.
It’s no surprise that Amazon is pretty heavy-handed when it comes to controlling your price, and so a price change increase of 20% could be pretty damaging to your business.
Especially surrounding Prime Day, Black Friday and Cyber Monday, and the whole Q4 holiday season, brands feel the pressure to offer promotions. Since Amazon is a pay-to-play platform and rewards advertising, you need to advertise to grow.
But there are so many different ad types now, and Amazon has hidden a lot of controls in there that brands aren’t aware of that will automatically bid up and cost you money. How do you look into all of these different areas and have visibility and what are the metrics or charts, if you will, that you should be referring to?
One solution is a profit bridge chart, which allows you to look at two different time periods and quickly see where you are losing profit (not revenue or top line). This information allows you to react quickly, because Amazon will continue to raise fees for many of their 450 transaction types next year and beyond.
Advertising Efficiency
Oftentimes, brands exert most of their energy, investment, and time on advertising. Most probably work with an advertising agency that helps them manage their strategy and execution.
Planetary Design implemented benchmarks into their advertising strategy to figure out how much to invest on advertising relative to total sales, and what that ratio should look like. Benchmarking allowed them to know whether a strategy was working.
Because when there’s so many different buckets in Amazon, it’s important to know specifically when things are performing well or when you need to reprioritize. All of Planetary Design’s benchmarks were based on the monthly financial impact to their bottom line—not to their top line.
Everything was rooted in a profitability analysis, starting with the things that hurt their profit the most and working down a prioritized list that way. If you don’t have a way to prioritize what’s impacting your margin the most, you need strong visibility to be able to respond quickly to these changes.
Conclusion
In 2026, your brand needs to have full visibility into every area of your business. Even though each of these buckets of margin leakage might seem small, these hidden operational costs could be hindering your growth on the platform.
If you’re tired of exporting spreadsheets and spending hours digging into data, it’s time to switch to Kapoq. Our alerts and opportunities module give you specific actions you can take to improve the health of your Amazon account—without the need to spend hours figuring it out yourself.
Book your free demo of Kapoq today to set yourself up for success in 2026.
