Marketplace Briefing: Amazon’s new performance-based deal fees spark concern among sellers

On paper, Amazon frames the move as a way to “make it easier” for sellers to test promotions and “align fees with performance.” In reality, sellers who spoke to Modern Retail for this story are concerned that it’s a stealth fee hike that will disproportionately hurt their top-selling products and further strain already razor-thin margins.

Historically, Amazon charged flat fees to run promotions: $150 for a Lightning Deal, $300 for a Best Deal, and $0.60 per unit redeemed for coupons. Under the new model, those upfront fees drop to $70 per day for both Lightning and Best Deals — but Amazon will also take a 1% cut of the sales driven by those promotions, capped at $2,000. Meanwhile, coupons will now incur a $5 flat fee per coupon, plus 2.5% of coupon sales. Amazon clarified that fees for Prime Day and other “Peak Events” will remain flat: $500 for a Lightning Deal, $1,000 for a Best Deal.

Prime Exclusive Discounts, which offer deals to Prime members, will double in cost, from $50 to $100 per event.

“We’re revising the deal and coupon fee structure to give sellers more control and flexibility on deal scheduling,” an Amazon spokesperson told Modern Retail in an email statement. “We’re lowering upfront investment in deal fees, and introducing variable fees to align with the value they create for sellers’ businesses, making it easier for sellers to test different promotional deal strategies.”

High performers, higher fees

Sellers and agency heads see the change as part of a broader pattern: Amazon pledging not to raise fees in 2025 while introducing “new math” that often results in higher costs anyway. “It feels like MBAs in a room engineering ways to recover costs or shift the balance of economic value in favor of Amazon,” said Jon Derkits, an ex-Amazon corporate employee turned seller and consultant​.

“If I run a Best Deal on my best-selling product that generates on average of between $50,000 and $80,000 in sales over a seven-day period, depending on the time of year, then I’m going to end up paying three to four times what I used to pay,” Derkits said. 

He said that most sellers don’t get to choose which products are eligible for Lightning and Best Deals — Amazon decides these based on an undisclosed set of metrics. That means the products sellers are allowed to promote are often the ones that generate the most revenue — and now, also the highest fees. 

In a bright spot, Amazon’s new fee model might be an improvement for lower-volume sellers or those with lower-priced products, according to Liran Hirschkorn, CEO and founder at Incrementum, an Amazon marketing agency. He shared a pricing example: “If you run a Lightning Deal for one day, and you do $3,000 worth of sales, then you’re paying $30 plus $70 for that day.” In this scenario, the seller would wind up paying $100 in deal fees compared to $150 with the previous fixed-fee structure.

Prime Day in the crosshairs

The change will take effect during a busy period for Amazon sellers, as they’ll be in the throes of Prime Day preparation.

“You can expect that people will be more protective of their margins around running deals,” said Hirschkorn. “They might not make as many units available, or they just might not run as many deals or coupons.” 

The new fee structure could lead to fewer discounts for shoppers at a time when price sensitivity is rising. “The irony,” Hirschkorn said, “is that these changes could actually reduce the volume of deals customers see, especially on non-peak days.”

With rising tariffs on Chinese imports already eating into margins, the timing is especially frustrating. “People are getting hit with increased tariffs,” said Hirschkorn. “You’d think Amazon might hold off on this while brands are figuring out the uncertainty in the economy and uncertainty with tariffs.”

The new deal fees are the latest in a long string of fee changes that sellers say have made it harder to operate profitably on Amazon. In the past year, Amazon rolled out new low-inventory penalties, changed how it reimburses for lost or damaged inventory, and implemented stricter fulfillment routing rules that increased shipping complexity​, Modern Retail previously reported. 

While Amazon has said it will not raise or introduce new fees in 2025 for sellers who use its Fulfillment by Amazon service, merchants say the fine print tells another story. “They’re just calling them something else,” Derkits said. 

Sellers look beyond Amazon

In 2024, many sellers began diversifying away from Amazon to platforms like Walmart, Shopify and TikTok Shop. A survey by Jungle Scout found that 60% of Amazon sellers now list on multiple platforms, up from 40% in 2022​.

Jon Elder, CEO and founder at Black Label Advisor, which manages hundreds of brands, said he expects that trend to accelerate as sellers continue to search for greener pastures on alternative marketplaces. “If the morale was bad in 2024, it’s even lower now,” he said. 

Amazon is also introducing more flexibility in how long sellers can run deals, allowing Best Deals to run any day of the week for up to 14 days. Some sellers see that as a positive change, particularly for niche brands that want to align promotions with seasonal trends or product launches. But for others, it’s a cold comfort. 

“Sure, I can run a deal for longer,” Derkits said. “But if I’m paying more than double the fees, why would I?”

What I’m reading

• Amazon is testing new AI-powered chatbots, including a feature called Interests AI, which prompts users to enter conversational search queries, and a health and wellness-focused chatbot, per CNBC.
• Walmart is working on having more checkouts happen within social media apps, the company’s chief technology officer Suresh Kumar told The Information.
• More apparel brands are selling on marketplaces where they ship orders directly to customers, a model otherwise known as drop shipping, per The Business of Fashion.

What we’ve covered

• Amazon is making Prime Day a four-day event in 2025
• Best Buy, Sam’s Club and Nordstrom executives share big plans for their ad businesses at Shoptalk
• Why Forever 21’s deal with Shein wasn’t enough to save itself from bankruptcy 

This story has been updated to include a comment from Amazon, which was sent to Modern Retail after this story was published.