Blog

5 Silent Amazon Profit Leaks Dragging Down Your Net Margin

By Jon Elder
November 10, 2026

Here's a wild stat.
​
The average Amazon seller loses 10% of their net margin to silent profit leaks that DO NOT show up in Seller Central.
​
When I consult sellers, this topic comes up, and when we talk about it over the phone, they typically have an "Oh my gosh, I have never thought about that!" moment.
​
I have two sons, and I teach them to always be aware of their surroundings and to watch their 6.
​
Here is how you need to "watch your 6" on Amazon:
​
1- Not Auditing Your PPC Agency​
​
If you are like most sellers, you pay an agency to manage your ads. That's great and exactly what I recommend, but my advice doesn't stop there. Do you realize that most agencies use virtual assistants with little to no Amazon experience? These virtual employees are not vested in your business, so making mistakes doesn't affect them. YOU, yes, YOU need to regularly audit your PPC agency. I neglected to audit my own PPC agency once, and then I found out they burned through $15,000 by accident. Don't be me...
​
2- FBA Dimension Errors​
​
Man, I can't tell you how many times I have been on a call and the seller goes silent when I ask if they have double-checked their FBA sizes and fees. Uh-ohhhhhhh. This is easy to vet. You should know the exact package and weights for your products. Make sure you are being charged the correct amount by Amazon. If not, ask for a rescan to update the fees.
​
​ 3- Coupons Gone Wild​
​
Coupons are highly effective, but many sellers have coupons stacked on Amazon dating back years and forgot about them. Customers will never alert you to this. It is your job to make sure your coupons are current, and you're not giving away free money. Remember, no one cares more about your business success than YOU.
​
​ 4- Not Caring About Your Return Rate​
​
A high return rate is typically one of two things: a systemic manufacturing problem or an issue with your images. Customers hate being confused or annoyed that your images promised one thing but never delivered. They also HATE quality control issues. Investigate any return trends that look concerning and do not postpone! If you get the dreaded "frequently returned" badge, you deserve it. You should catch it way before it becomes systemic.
​
​ 5- One Too Many Software Services​
​
Most sellers have chronic software addiction. I get it. I used to struggle with that too. Over time, you realize that you need very few software programs to thrive on Amazon. I bet most of you have 2-3 software subscriptions that you never use. Cancel those today. AI is going to wreck this industry, in all honesty. Might as well start cleaning up now.

Look, I could easily add 20 more items to this list, but these five are easily the biggest leaks I see with my clients. if you focus on these, you address 99% of the leak volume in your business. Grab some duct tape!

2 Critical Deadlines That Impact Your Cash Flow

As we head into the peak holiday rush, Amazon has rolled out two major policy updates. One changes how you handle customer returns for the next three months, and the other could put your account at risk of suspension if you don't act immediately. Cue the heart attack. Just kidding.

The New $1M Insurance Mandate for Low-Volume Sellers

Effective November 2, 2026, Amazon quietly eliminated the traditional $10,000 monthly sales exemption threshold for sellers listing items in “enhanced safety” product categories.

• What changed: Previously, you only needed commercial liability insurance if your gross sales exceeded $10,000 in a month. Now, if you list products in specific high-risk categories, you must carry a $1 million policy from your very first sale.

• Are you affected? If your catalog includes toys, children’s products, cosmetics, ingestibles, small kitchen appliances, mattresses, or anything containing a lithium-ion battery, the answer is yes.

• The Action Step: Check your Seller Central notifications. If you are flagged, you must upload your Certificate of Insurance (COI) immediately. Failing to do so will result in immediate listing suppression or account suspension. If you need a policy fast, look into Amazon-approved accelerators like Marsh’s Insurance Accelerator inside the Seller Central Appstore to get compliant within 48 hours. My personal advice is to use a private insurance broker. They are very easy to find in your state. Act fast!

The Extended Holiday Returns Window Is Officially Live

Amazon’s annual Extended Holiday Returns Policy officially kicked off on November 1, 2026, and it will heavily impact your return metrics and cash reserves through early 2027.

  • The Policy: Any items purchased by customers between November 1 and December 31, 2026, can be returned for a full refund until January 31, 2027.
  • Who this applies to: This policy applies automatically to both FBA and FBM (Merchant Fulfilled) orders.
  • The Action Step: Brace your cash flow for a potential "returns cliff" in mid-January. I always recommend setting aside a slightly higher cash reserve than usual to account for post-holiday buyer's remorse. We all know what that feels like... For FBM sellers, ensure your customer service team is briefed on the extended timeline so you don't accidentally deny a valid holiday return and trigger an automatic A-to-Z Guarantee claim.

That's a wrap, folks! See you next week.

One growth hack, every Tuesday morning.

Join 50,000+ Amazon and Walmart operators learning how to scale smarter every week and apply strategies built from $100M+ in real brand growth.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Yellow abstract geometric shape composed of diamond and square forms interconnected on a white background.

Stay Ahead Every Week

Get weekly Amazon & Walmart growth hacks trusted by 50,000+ sellers. Actionable insights delivered straight to your inbox.

Abstract yellow geometric shape with interlocking rectangular and curved segments on a transparent background.

Work 1:1 With Us

Break through stalls, protect margins, and unlock your next $5M in growth. Get tailored advice from an operator who’s built and sold brands at scale.