Viewpoint - Asha Bhalsod

With over 15 years of experience managing Amazon and eCommerce strategies for brands such as Tomy UK and Melissa & Doug, Asha Bhalsod is the founder of Etopia Con-sultancy, a dedication Amazon agency that offers strategy consultancy, full-service Amazon account management and Amazon advertising. She now helps brands navigate the complexities of Amazon to drive growth. For expert guidance on navigating your Amazon strategy, contact asha@etopiaconsultancy.co.uk

Heading into 2025, those selling on Amazon face an increasingly challenging landscape. Amazon continues to evolve, demanding that brands adapt and refine their strategies to remain competitive. Lessons from 2024 have shown that profitability, diversification and mastery of the basics are no longer optional, but essential. Here are five key focus areas that brands should prioritise to future-proof their Amazon business in the year ahead.

1. De-risking your Amazon business: hybrid models and range rationalisation

One of the most persistent risks we observed in 2024 was brands' over-reliance on Amazon’s Vendor (1P) model. Businesses operating exclusively within Vendor Central found themselves at the mercy of Amazon's shifting priorities and policies. From sudden 30-day account closure notices to reduced purchase orders (POs) and increased fees, brands were left exposed to changes beyond their control.

The solution: adopting a hybrid model that utilises both Vendor (1P) and Seller (3P) platforms provides flexibility and control. For example, a leading toy brand experienced declining margins on 1P due to increased freight allowances and penalties for late shipments. By shifting some products to Seller Central, they regained pricing control and improved margins on niche items that Amazon wouldn’t purchase in bulk.

Streamlining your product range is just as essential as diversifying your channels. In Q1 of 2024, overstock issues hit hard as Amazon became more selective in issuing POs. Brands that took a proactive approach by rationalising their SKUs - focusing on high-demand, profitable items -were better positioned to weather the storm. While cutting 20% of your catalogue may seem daunting, the payoff can be significant. Businesses that made these changes saw their overall Net PPM (Per Product Margin) increase by as much as 15%.

Conducting quarterly SKU reviews and focusing on profitable, in-demand products drives operational efficiency, improves forecasting accuracy and strengthens margin positions, ultimately setting the business up for sustainable growth.

2. Profitability: the non-negotiable focus

Profitability has never been more crucial. In 2024, Amazon established that vendors failing to meet profitability benchmarks would face consequences, including reducing purchase orders (POs). For brands, the key to success on Amazon in 2025 is understanding and improving their profitability metrics. This requires a comprehensive approach, starting with a review of Net PPM (Per Product Margin) to identify underperforming SKUs and address high operational costs. By retiring unprofitable SKUs or shifting them to a 3P model, brands can protect margins and drive growth. Equally important is managing internal costs - by aligning internal processes with Amazon's requirements, brands can minimise chargebacks and reduce operational expenses. Companies that take a proactive, data-driven approach to profitability are better positioned to maintain healthy margins and stay ahead of Amazon’s shifting requirements.

3. Amazon Advertising: playing the long game

Amazon advertising has become a cornerstone of success on the platform, but the landscape has evolved. Rising CPCs (Cost Per Click) mean brands can no longer afford to run broad, upper-funnel campaigns without a clear focus on return. In 2025, success hinges on targeted, lower-funnel strategies that drive conversions and foster long-term growth. Leveraging tools like Amazon Marketing Cloud (AMC) provides advertisers with deeper insights into customer journeys, enabling them to optimise campaigns for maximum efficiency. For instance, reallocating the budget towards high-performing ad formats like Sponsored Display Ads has helped brands achieve significant sales uplifts, as seen with a 35% Q4 sales boost during Prime Day. Additionally, the rise of Sponsored TV Ads and Prime TV presents new opportunities to reach audiences in a highly targeted manner, with strategies such as showcasing bestsellers during key shopping moments resulting in a 42% uplift in brand searches. By prioritising data-driven advertising strategies and smarter budget allocation, brands achieve stronger ROAS and sustained sales growth.

4. Specialist skills: in-house vs. agency expertise

Navigating Amazon’s complexities demands specialised expertise, whether through managing advertising, optimising listings, or analysing profitability metrics. Generalists are no longer sufficient in this increasingly competitive landscape. Brands must carefully assess whether to build specialist teams in-house or collaborate with external agencies. A balanced approach can often yield the best results; for example, combining in-house management of day-to-day tasks with agency support for advertising and strategic planning has led to measurable success, such as a 50% increase in ROAS within a year.

5. Brilliant basics: the foundation of success

Amid the complexities of Amazon, it’s easy for brands to focus on advanced strategies and overlook the importance of getting the basics right. Yet, it’s these fundamentals that often separate the top-performing brands from the rest. Consistently strong catalogue management ensures that product listings are up-to-date, error-free and aligned with Amazon’s requirements, reducing the risk of suppressed listings or poor discoverability. Optimised listings, complete with relevant keywords, compelling titles and clear descriptions, are essential for increasing visibility and driving conversions. Engaging A+ content further enhances the customer experience by showcasing products with visually appealing, brand-driven narratives that build trust and encourage purchases. Strong review strategies - focusing on generating authentic, positive reviews while promptly addressing negative feedback - help reinforce credibility and improve rankings in search results. The brands that prioritise these core elements as part of their ongoing operations lay the foundation for long-term success, ensuring their strategies are scalable and effective in an increasingly competitive marketplace.

Looking ahead: preparing for 2025

The Amazon marketplace will only grow more competitive in 2025. Brands that take a proactive, strategic approach - focusing on diversification, profitability, advertising efficiency, specialist skills, and the basics - will be best positioned to succeed.