In 2018, Jeff Bezos published his annual shareholder letter with an unusual focus. Instead of talking about AWS growth or new services, he spent several paragraphs on something else: third-party sellers.

At the time, 58% of physical gross merchandise sales on Amazon came from Marketplace sellers, not Amazon Retail. Bezos called this "a win for customers" and described the growth of third-party selling as a decades-long process of "helping independent sellers compete against our first-party business."

That letter was a signal. Seven years later, the signal has only gotten louder.

Andy Jassy, who took over as CEO in 2021, has written three shareholder letters since then. Each one reinforces the same thesis: Amazon is a Marketplace-first company. In his 2024 letter (released April 2025), Jassy described the multi-decade seller flywheel as a deliberate strategic choice, asking "Why not let customers choose the selection, price, and delivery speed they prefer from among these millions of sellers?"

In late 2024, Amazon made that preference explicit. The company terminated thousands of Vendor Central accounts for brands generating under $5-10M annually, forcing them to move to Seller Central.

The Marketplace didn't just win. It's now the only game for most brands.

Why the Amazon Shareholder Letter Matters for Sellers

Amazon's annual shareholder letter is the closest thing sellers get to a product roadmap. Most brands skip it. That's a mistake.

The letter signals where Amazon is investing, what's changing for sellers, and where the platform is headed. Reading between the lines tells you what's about to get harder, what's about to get cheaper, and what Amazon expects from you.

From Bezos to Jassy: How the Letter's Focus Has Shifted

Bezos's shareholder letters were famous for their long-term thinking and customer obsession. He wrote about invention, Day 1 culture, and Amazon's willingness to be misunderstood for long periods.

Jassy's letters are more operational. He writes about regional fulfillment networks, same-day delivery volume, and the seller tools Amazon has built. Where Bezos framed the Marketplace as a philosophical win (let sellers compete on the same detail page), Jassy frames it as infrastructure (we built FBA, sponsored ads, and Buy with Prime to support this ecosystem).

The shift in tone matters. Under Bezos, the Marketplace felt like a strategic experiment. Under Jassy, it's the core business.

Reading Between the Lines: What Amazon Says vs. What It Means for Brands

When Jassy writes that third-party sellers account for 60-61% of unit sales, he's not just sharing a statistic. He's telling you where Amazon's product development resources are going.

When he describes the investment in same-day delivery (over 8 billion items in the U.S. in 2025), he's setting the bar for what "fast shipping" means in 2026.

When he mentions Amazon's advertising business ($68.6 billion in 2025), he's acknowledging that organic discoverability is no longer sufficient. Visibility is paid now.

Key Takeaways from the Latest Amazon Shareholder Letter

Marketplace Growth: 3P Sellers Now Drive 61%+ of All Sales

In 2018, third-party sellers accounted for 58% of physical gross merchandise sales. By 2023, that figure had climbed to 60%. In Q4 2025, it reached 61% of worldwide units.

The growth has plateaued, but not because the Marketplace is slowing down. It's plateaued because the Marketplace already won. There's not much room left for the percentage to climb.

There are now 1.9 million active sellers globally. The top 1.6% of those sellers control 50% of the marketplace revenue. Fewer than 8,000 sellers generate 50% of Amazon's U.S. third-party GMV.

That concentration tells you something important: the Marketplace has matured into a capital-intensive, operationally demanding channel. Scale and execution win.

AI and Automation: What Jassy's AI Investment Signals for Seller Tools

Jassy's 2024 letter described Amazon's investment in generative AI tools for sellers, including AI-generated product descriptions, image enhancement, and listing optimization.

For sellers, this means two things. First, the bar for catalog quality is rising. If Amazon's tools can generate a decent product description in seconds, a mediocre hand-written description looks worse by comparison.

Second, AI tools will reduce some operational burden but won't replace strategic judgment. You still need to know which keywords matter, which images convert, and how to position your product against competitors.

Fulfillment and Delivery Speed: The Rising Bar for FBA Sellers

In 2024, Amazon delivered over 9 billion items same-day or next-day globally. In 2025, U.S. Prime members received over 8 billion same-day or next-day items, up 30% year-over-year. Same-day delivery was used by nearly 100 million U.S. customers.

Amazon also completed a major fulfillment network regionalization, moving from a single national network to 10 distinct U.S. regions by late 2025. This regionalization enabled faster delivery and lower per-unit costs for Amazon.

For sellers, this raises the bar. If you're using FBA, you now need to think about inventory placement across multiple regions, not just shipping to one fulfillment center. If you're not using FBA, you're competing against delivery speeds that most third-party logistics providers can't match.

How the Marketplace Has Changed Since 2018

The Numbers: From 58% to 61% and 1.9M Active Sellers

Seven years ago, the Marketplace was a rising alternative. Now it's the primary channel.

The 58% figure from 2018 has climbed to 61%, but the bigger story is total volume. Amazon's GMV has tripled. The number of active sellers has grown from roughly 1 million to 1.9 million.

But seller concentration has intensified. The top 8,000 sellers generate half the U.S. GMV. That's down from 15,000 sellers less than three years ago.

What happened? Margin pressure from fees, advertising costs, and tariffs elevated the execution requirements. Brands with operational sophistication and capital reserves gained share. Smaller sellers stalled or exited.

New Complexity: Advertising, Brand Protection, and Supply Chain

In 2018, organic visibility was still possible for many products. In 2026, it's the exception.

Amazon's advertising revenue reached $68.6 billion in 2025, making Amazon the world's third-largest digital advertising company. Average cost-per-click on Amazon rose to approximately $1.12 in 2025, a 15.5% year-over-year increase.

Advertising is no longer optional. It's table stakes for maintaining visibility.

Brand protection has also gotten more complex. Amazon introduced new IP tools, but counterfeit listings and unauthorized resellers remain a persistent problem. Sellers need active monitoring and enforcement strategies, not just reactive complaint filing.

Supply chain requirements have also tightened. Amazon's regionalized fulfillment network rewards sellers who can distribute inventory efficiently across multiple locations. Sellers who can't face slower delivery badges and lower conversion rates.

Competition from Low-Cost Platforms

Temu and Shein emerged as significant competitors in 2023-2024, offering ultra-low-cost products with direct-from-China shipping. Amazon responded with initiatives to attract budget-conscious shoppers, but the presence of these platforms has intensified price competition.

For mid-market brands, this means pricing pressure from below and execution pressure from above. You're competing against low-cost alternatives on price and against sophisticated sellers on fulfillment speed and advertising.

What This Means for Your Brand's Amazon Strategy

The Vendor Central Contraction

In late 2024, Amazon began terminating Vendor Central (1P) accounts for brands generating under $5-10M annually. This was the most concrete signal yet that Amazon's Marketplace-first model is policy, not just preference.

If you're currently selling wholesale to Amazon (Vendor Central), expect that relationship to narrow or end. Vendor Central is expected to serve only enterprise-tier brands ($20M+) going forward, or potentially merge into a unified "Supplier Central" model.

For most brands, that means learning to retail your own products on Seller Central. You're no longer a supplier to Amazon. You're a retailer using Amazon's platform.

The Case for Professional Marketplace Management

Marketplace selling is operationally demanding. You need to manage:

• Advertising: Sponsored products, sponsored brands, DSP campaigns, and ongoing bid optimization
• Fulfillment: Inventory placement across regions, FBA compliance, or third-party logistics that meet Prime delivery standards
• Catalog quality: Keyword optimization, A+ content, image standards, video, and AI-enhanced listings
• Account health: Order defect rate, late shipment rate, cancellations, policy compliance
• Fee management: Understanding referral fees, FBA fees, inbound placement fees, low-inventory-level fees, and Overmax surcharges
• Customer service: 24-hour response requirements, returns, claims
• Brand protection: Monitoring unauthorized sellers, counterfeit listings, IP enforcement

Brands that run Marketplace operations in-house often succeed, but success usually comes with big mistakes along the way. The learning curve is expensive.

Brands that partner with a Marketplace expert get more immediate results. We replace the old wholesaling relationship with Amazon and work directly with your team to manage the operational complexity while you focus on product development and brand strategy.

Where Brands Should Focus Investment in 2026

If you're managing your own Marketplace operation, here's where to focus:

• Advertising: Budget for it. CPC is rising 15%+ per year. Plan for advertising to be 8-12% of revenue, not 3-5%.
• Fulfillment: If you're using FBA, understand the regionalized network and plan inventory placement accordingly. If you're not using FBA, make sure your 3PL can deliver Prime-equivalent speeds.
• Catalog quality: Invest in professional photography, A+ content, and video. The bar is higher than it was three years ago.
• Brand protection: Monitor your listings actively. Set up automated alerts for unauthorized sellers and counterfeit claims.
• Operational discipline: Track your unit economics closely. Fees and ad costs are compressing margins. Know your break-even and make decisions accordingly.

If you're working with an agency, make sure they're managing all five areas, not just running ads and calling it Marketplace management.

Frequently Asked Questions

Conclusion

The 2018 shareholder letter was a signal. The Marketplace was rising, and brands needed to pay attention.

Seven years later, the signal is deafening. The Marketplace didn't just rise. It won. Third-party sellers now drive 61% of Amazon's worldwide units. Amazon is terminating small Vendor Central accounts and pushing brands to Seller Central. Advertising is table stakes. Fulfillment expectations are higher. Margins are tighter.

For brands, the question is no longer "Should we be on the Marketplace?" It's "How do we run a profitable Marketplace operation in 2026?"

The answer depends on your resources, your operational sophistication, and your appetite for the learning curve. Some brands have the internal capacity to build a world-class Marketplace team. Most don't.

If you're looking for expert help, SupplyKick manages the full operational stack: advertising, logistics, catalog, customer service, and account health. We've been doing this since before the Marketplace hit 58%. We know what works, what's changed, and where the platform is headed next.

Want to talk through your Amazon strategy? Let's talk.