Introduction
It’s hard to deny the magnetic pull of Amazon. With hundreds of millions of customers and a reputation for fast prime shipping, it often appears to be the perfect place for every brand to sell. But while Amazon can absolutely be part of a thriving e-commerce strategy, relying on it too heavily can quietly drain your profits, limit your customer relationships, and stall your long-term growth. Working alongside an Amazon marketing agency can help you navigate these challenges, but maintaining a diversified e-commerce strategy that balances marketplace presence with direct channels remains essential for sustainable brand growth.
At Envoli, we take a unique approach: we help brands optimize their Amazon marketing strategy while building robust Direct-to-Consumer (DTC) channels. In our experience, blending the two is often the smartest approach—leveraging Amazon’s reach while maintaining control of your customer relationships and margins.
In this guide, we’ll tackle seven major myths about selling on Amazon that sellers and Amazon marketing agencies often misunderstand. We’ll reveal the pitfalls these misconceptions create and demonstrate how a strategic approach to Amazon can still drive significant benefits. Whether you’re considering Amazon expansion or already selling there, you’ll learn how to maximize its benefits without compromising your brand’s growth potential.
Myth 1: You’ll Make the Most Money on Amazon
Many e-commerce founders assume Amazon’s sheer volume of shoppers will translate directly into higher profits. With hundreds of millions of potential buyers searching every day, how could that not mean bigger revenue?
AMAZON VS DTC
After Platform Fees,
What % of Revenue Do Sellers Keep?
Amazon Marketplace
Direct-to-Consumer
*Varies depending on spend strategy and industry. Amazon advertising costs limit brand-building potential as sellers cannot collect customer emails or data for remarketing campaigns.
The Reality
While Amazon’s traffic is undeniable, its fees can quietly consume your margins. Between referral fees (often 8–15% or more), FBA charges, storage surcharges, and climbing ad costs, you can lose 40–50% of each sale before you know it. That’s cash you could otherwise invest in new product development or paid media campaigns on your own channels.
Beardbrand, a premium men’s grooming brand, saw a rapid fourfold boost in sales after joining Amazon in 2016, which seemed like a dream come true. But founder Eric Bandholz soon faced mounting fees and counterfeit versions of his beard oils. By 2018, Beardbrand fully pulled out, concluding that short-term gains weren’t worth the erosion of margins. Freed from marketplace rules and extra fees, the company shifted back to its direct site, investing more in community-building and preserving the premium nature of its products.
PopSockets, the viral phone-grip maker, also enjoyed a meteoric rise on Amazon—until counterfeits, forced discounts, and what CEO David Barnett called “bullying” tactics undermined its profitability. Barnett eventually testified before Congress about these challenges, highlighting that even a red-hot, ubiquitous product could be undercut by the sheer scope and pressures of Amazon’s marketplace. PopSockets exited Amazon in 2020, proving that giant sales volume doesn’t necessarily mean healthy long-term profits.
A Smarter Approach
Rather than banking everything on Amazon, many brands develop a robust direct-to-consumer channel where they keep more of each sale and fully manage branding, pricing, and customer outreach. This doesn’t mean abandoning Amazon entirely; it means relying on it for incremental volume, rather than as a sole growth engine. The funds that would otherwise be lost to marketplace fees can then be reinvested in building stronger brand recognition, developing new products, or creating a truly engaging customer experience. If you’re working with an Amazon marketing agency, make sure they’re not only focused on sales volume, but also considering potential threats to your margins.
Net Profit Margin Comparison
Why Amazon Might Still Be Beneficial
When approached thoughtfully, Amazon remains a powerful conversion channel. Its Prime program and built-in trust can boost credibility for lesser-known brands, and the massive audience can provide incremental revenue streams you might not capture elsewhere. The key is managing fees and carefully positioning Amazon in your overall strategy so you don’t dilute your profits. By keeping a close eye on margins and leveraging Amazon’s reach in moderation, you can still benefit from its marketplace clout without losing sight of your own bottom line.
Myth 2: You’ll Miss Out on Amazon’s Massive Customer Base
Many business owners fear that not being on Amazon, or pulling out once you’re already there, means forfeiting millions of potential buyers. With 56% of online shoppers defaulting to Amazon when they first start searching for a product, brands feel compelled to maintain a presence at all costs.
The Reality
Although Amazon reaches an enormous pool of ready-to-buy consumers, it also requires that you relinquish key aspects of your brand experience. Amazon controls customer data and imposes constraints on how you can market, discount, or even communicate with your buyers. Some brands decide that sacrificing brand ownership simply isn’t worth unlimited access to Amazon’s traffic.
Peak Design grappled with a wave of knockoffs under Amazon’s own Basics line, yet it chose a hybrid path rather than abandon the platform entirely. By focusing most of its resources on direct-to-consumer channels, Peak Design kept its brand identity intact, preserving community engagement and storytelling on its own site. Meanwhile, it still maintained a minimal Amazon store, capturing deal-oriented shoppers who might never visit their dedicated website. This approach shows that you don’t have to let Amazon define your entire brand identity, yet you can still tap the platform’s sheer volume where it makes sense.
Some companies leave altogether. Nike ended its pilot partnership with Amazon after concluding it could build a stronger connection with buyers in its own channels. The global athletic giant found that unauthorized sellers and loose brand protections eroded the Nike experience. Even Birkenstock famously cut ties after facing rampant counterfeits, deciding that its reputation for quality mattered more than exposing itself to counterfeiters aiming to capitalize on its signature footbed design.
A Smarter Approach
Rather than chasing every single sale on Amazon, concentrate on building an audience you actually own—through your website, email, and social media. If you do see a strategic fit for Amazon listings, you can focus on select products that are profitable or serve as “gateway” items for discovering your brand. That way, you still reach Amazon loyalists without surrendering your entire customer base to a platform you don’t control. By communicating directly with buyers, shaping their experience from start to finish, and nurturing loyalty on your own channels, you create a brand presence that isn’t solely defined by Amazon’s policies or algorithms.
Why Amazon Might Still Be Beneficial
The sheer volume of visitors remains a compelling draw.
More Than Half of Shoppers Start Product Searches on Amazon
Percentage of consumers who listed each platform as their go-to for shopping
Prime shipping, user reviews, and product comparisons often seal the deal for on-the-fence shoppers. Even if you’re DTC-first, having a modest presence on Amazon can capture customers who check there first, ensuring your competitors or counterfeiters don’t hijack your brand’s name. Tapping into Amazon’s vast audience while protecting core brand values and direct relationships is the middle ground that many successful companies now choose.
Myth 3: Shipping & Customer Service Are Easier with Amazon
Many brands believe Fulfillment by Amazon (FBA) is the only reliable way to offer fast, hassle-free shipping and returns. After all, Amazon shaped consumer expectations for two-day delivery and no-questions-asked refunds, so it feels like the obvious choice for customer satisfaction.
The Reality
While FBA can indeed simplify logistics and grant you the coveted Prime badge, it also ties you to Amazon’s standardized return policies and cost structure. If your products need more specialized handling or if your brand thrives on a personal touch, a uniform, one-size-fits-all approach may do more harm than good.
Ranch Road Boots, an upscale Texas-based footwear brand, watched nearly half its sales on Amazon come back as returns, often with mismatched items they had not even manufactured. Because Amazon managed the process, Ranch Road Boots had no recourse but to issue refunds, absorbing the losses despite the returns policy not fitting a higher-end product line. After realizing how much this was eroding their bottom line and jeopardizing inventory, the company scaled back on Amazon and found a third-party logistics solution better suited to its premium positioning.
A Smarter Approach
Instead of offloading all fulfillment to FBA, many brands now compare reputable third-party logistics providers that can match or exceed Amazon-level shipping speeds while still allowing flexible packaging, personalized customer service, and more nuanced return protocols. This arrangement keeps you in control of your product presentation and how returns are handled, reducing surprises and wasted stock. By investing in a robust DTC channel with integrated logistics, you can offer a seamless experience without becoming overly dependent on Amazon’s policies.
Why Amazon Might Still Be Beneficial
For fledgling or lean teams, FBA is a powerful stepping stone. It offers nationwide warehousing, prebuilt shipping efficiencies, and an immediate sense of trust for shoppers who love Prime. If your brand is still finding its footing or testing new markets, FBA can be a shortcut to scale without building an entire logistics arm from scratch. Over time, though, many brands grow more discerning, using FBA only for certain SKUs or regions while maintaining their own or outsourced fulfillment in other areas. It’s less about abandoning FBA altogether and more about ensuring you don’t lose control of your operations or eat into your margins unnecessarily.
Myth 4: Promotion and Marketing Are Easier on Amazon
Because Amazon has a massive captive audience, many brands assume its built-in ad platform and high-intent shoppers simplify marketing. They picture a scenario where they can skip the complexities of social ads or SEO, rely on Amazon’s traffic, and watch sales roll in.
The Reality
Even though Amazon does attract shoppers who are ready to purchase, you’re competing with every other seller in your category—and often Amazon’s own private labels. This is a challenge that many Amazon marketing agencies don’t adequately address when setting expectations. The rise in PPC costs, along with limited access to customer data, can make it difficult to run profitable campaigns or build lasting brand relationships. You may see an uptick in sales, only to discover that after ad spend, your returns are minimal.
Hero Cosmetics launched as a direct-to-consumer brand best known for its “Mighty Patch” acne stickers. Early on, the founders embraced Amazon, expecting built-in traffic and simpler marketing than running ads on social channels. Instead, they found themselves competing in an extremely crowded marketplace for acne treatments and skincare products. To stay visible in search results, Hero Cosmetics had to continually invest in Amazon ads—sometimes bidding on their own brand name just to prevent competitors from stealing top spots. This ad spending, layered on top of referral fees, meant that even though they saw a spike in sales, their margins often shrank. Far from being easier, Amazon marketing required constant management of pay-per-click campaigns, reviews, and product listing optimizations.
A Smarter Approach
Rather than relying exclusively on Amazon PPC, consider broadening your promotional mix. Many brands see better long-term returns by driving initial awareness through social ads or influencer campaigns, and then directing potential customers to their own storefront for deeper product storytelling.
Hero Cosmetics learned that Amazon can be a powerful acquisition tool but only if it’s part of a broader marketing ecosystem. They continued growing their direct site and collecting emails, using social media and influencer partnerships to build brand awareness beyond the marketplace. By the time consumers searched on Amazon, Hero already had strong product reviews and a recognizable brand, reducing the amount they had to spend defending their listings. Rather than relying on Amazon as the primary promotional channel, they used it to meet shoppers where they already were, while channeling loyal fans to their own site for deeper engagement and healthier margins.
If you do run ads on Amazon, you can treat them as a secondary boost rather than a core acquisition strategy. This lets you maintain some presence in the marketplace for its ready-to-buy crowd, yet focus more heavily on collecting first-party data, retargeting past visitors, and fostering loyalty through personalized email and SMS marketing that Amazon doesn’t allow.
Why Amazon Might Still Be Beneficial
Despite the challenges, Amazon remains a high-intent arena. If you monitor your ad spend closely, optimize product listings, and secure strong reviews, you can capitalize on shoppers who head to Amazon fully prepared to make a purchase.
For this reason, Hero Cosmetics maintains an active Amazon presence, recognizing it’s a trusted platform for discovery, especially for people seeking quick, practical skincare solutions. The key was acknowledging that Amazon ads aren’t necessarily easier—they’re simply another part of a well-rounded marketing strategy. By balancing Amazon with strong DTC initiatives, Hero retains control of its narrative and pricing while still benefiting from the marketplace’s massive reach.
Many brands use this funnel for launching new SKUs quickly or riding the wave of a trending category. It can be a meaningful revenue stream—provided you see it as one facet of your overall marketing plan rather than a replacement for building your own customer relationships.
Myth 5: Amazon Provides Better Data & Insights
Because Amazon is a tech behemoth, many founders assume its analytics must be unparalleled. The assumption is that if you sell through Amazon, you’ll gain access to rich buyer data—emails, demographics, browsing behavior, and anything else that might fuel a deeper relationship with customers.
How Amazon Gatekeeps Customer Data From Merchants
Amazon vs. DTC: Data Access & Control Comparison
The Reality
Amazon provides sellers with only limited analytics—basic metrics like units sold, revenue, and aggregated search data—while withholding crucial customer information.
Lume Deodorant discovered this limitation firsthand after expanding to Amazon. Though successful with their direct-to-consumer model built around education and subscriptions, Lume found themselves operating blindly on the marketplace platform. Without access to email addresses or purchase history details, they couldn’t identify repeat customers, implement targeted remarketing, or guide Amazon shoppers toward their subscription program. This data barrier fundamentally restricted their ability to build the personalized customer relationships that had fueled their DTC success.
A Smarter Approach
The most reliable path to owning your customer relationships is a dedicated direct-to-consumer channel. By selling via your own storefront, you can track each step of the buyer’s journey and gather meaningful insights: which marketing channels brought them in, how many visits they needed before converting, and whether they’re a first-time or returning customer.
Realizing how critical first-party data is for nurturing repeat purchases, Lume kept its Amazon presence focused on a select set of bestsellers, while continuing to position its main website and subscription plan as the brand’s core experience. They used Amazon for visibility—especially for new shoppers who rely on Prime—but funneled existing fans to their direct site by offering exclusive scents, bundle deals, and educational content. Meanwhile, all marketing efforts (social media, paid search, influencer collaborations) directed people to Lume’s DTC store, where they had full data capture and could engage subscribers directly.
Armed with this information, you can launch targeted email flows, offer exclusive perks to repeat purchasers, and continuously refine your messaging. Even if you maintain an Amazon presence, having your own analytics ecosystem ensures you’re not solely reliant on a platform that keeps you at arm’s length from your own buyers.
Why Amazon Might Still Be Beneficial
Amazon’s brand registry tools and overall market data can still point to high-volume keywords, rising search trends, and other macro insights you might not catch on your site alone.
Amazon still plays a role in Lume’s growth because it’s a convenient channel for impulse shoppers and Prime devotees. But Lume’s story underscores that Amazon’s aggregated data and “best guess” metrics don’t compare to the robust, personal insights available when selling DTC. By tapping Amazon for incremental sales while prioritizing direct relationships, Lume maintains a scalable model that captures the long-term value of each customer—something impossible to do if you rely solely on Amazon’s limited data.
If you’re testing new product categories or evaluating where shopper demand is strongest, Amazon’s broad vantage can be a useful supplement to your direct data. The key is recognizing that the platform’s analytics won’t replace the deep, personal knowledge you gain from selling directly. By combining Amazon’s high-level trends with the fully transparent data from your own site, you get the best of both worlds.
Myth 6: Amazon is Just Another Sales Channel
Some brands assume that selling on Amazon doesn’t require much extra effort. They view it like eBay or Walmart Marketplace—just upload product photos, set prices, and wait for sales. The assumption is that Amazon’s popularity alone will do the heavy lifting, so investing significant resources or specialized tactics seems unnecessary.
The Reality
Treating Amazon as a passive add-on often backfires. Because Amazon has its own algorithms, buy box rules, and review systems, brands that ignore the unique demands of the platform risk losing sales to resellers or dropping off search results entirely.
Frogg Toggs, an outdoor apparel brand, initially adopted a hands-off approach on Amazon. Their product listings became fragmented; multiple third-party sellers commandeered the pages, undersold official listings, and won the Buy Box. Important variations weren’t properly grouped, so reviews were scattered, damaging conversion rates. Conversion remained low, and brand image suffered because Frogg Toggs never fully managed how products appeared or were priced. By treating Amazon as just another channel—rather than a specialized marketplace—sales lagged far behind their potential.
In contrast, Koblenz, a century-old appliance manufacturer, made Amazon its dedicated focus when expanding online. After underwhelming early results, Koblenz overhauled every aspect of its Amazon presence, from enriched product listings with optimized keywords to careful ad placement and inventory management. The brand soon saw a 280% increase in Amazon sales, with some products surging over 600%. By giving Amazon the attention it required—dedicated content, advertising, and operational discipline—Koblenz unlocked a level of growth it would never have achieved with a passive approach.
A Smarter Approach
Rather than treating Amazon as a side project, think of it as its own business unit. Whether you manage it in-house or partner with an Amazon marketing agency, dedicating consistent resources to areas like listing optimization, pricing controls, and inventory management can make all the difference in this unique marketplace. Monitoring reviews and quickly responding to customer feedback can also protect your brand reputation. This hands-on, proactive stance is what differentiates brands that flounder under the weight of competition and those that thrive with increased market share.
Why Amazon Might Still Be Beneficial
Devoting resources to Amazon can pay off handsomely. Millions of shoppers visit the site daily, and strong listings backed by smart ads can place your products in front of a high-intent audience. If you’re prepared to handle the platform’s unique demands—algorithmic visibility, third-party competition, rapid fulfillment—Amazon can become one of your biggest revenue generators. The key is recognizing it isn’t just another channel; it’s an ecosystem that rewards consistent effort.
Myth 7: A Great Product Will Sell Itself on Amazon
There’s a lingering notion that if a product is innovative or high-quality, it will naturally stand out and gain traction on Amazon. Brands assume the marketplace’s vast audience will recognize true value instantly, eliminating the need for complex listing optimization or advertising campaigns.
The Reality
Even fantastic products can get buried in Amazon’s crowded marketplace if they aren’t positioned strategically. Amazon’s search algorithm favors listings with relevant keywords, strong reviews, and healthy sales velocity. An effective Amazon marketing agency will understand that relying solely on product merit can lead to disappointing results.
A small Taiwanese company that produced premium silicone earplugs assumed the product’s comfort and eco-friendly design would speak for itself. They listed on Amazon without any advertising or review-building plan. The market for earplugs was already saturated, and with competitors offering cheaper options and boasting more reviews, the brand’s initial momentum fizzled. Though sales hit around 250 pairs by the third month, they quickly declined to 50 units per month. Cheaper, better-reviewed knockoffs dominated the rankings, and the brand eventually withdrew, stuck with unsold inventory. Their earplugs were superior in quality, yet without a strategic approach—keyword targeting, competitive pricing, and a drive for positive reviews—the product never gained traction.
A Smarter Approach
A truly successful Amazon launch requires more than a great product. Brands that thrive usually conduct rigorous keyword research, optimize product titles and images, and actively pursue genuine reviews to build social proof. Advertising through Sponsored Products or lightning deals can boost search rankings, while well-crafted listings help clarify the unique selling points that set your item apart. By approaching Amazon’s platform with a strategic mindset—rather than assuming quality alone wins—you raise visibility and give potential customers clear reasons to choose your product.
Why Amazon Might Still Be Beneficial
Amazon’s high-intent customer base can supercharge a brand if you put in the effort to stand out. Shoppers come ready to buy, meaning that with a focused launch strategy—good reviews, optimized listings, and targeted ads—a truly great product can climb the rankings quickly, and Amazon amplifies what already distinguishes your product.
What Sets an Effective Amazon Marketing Agency Apart?
When evaluating potential partners for your Amazon strategy, it’s important to recognize that not all Amazon marketing agencies are created equal. The most valuable partners don’t simply promise to boost your Amazon sales — they take a holistic view of your brand’s overall e-commerce ecosystem.
Ultimately, any good Amazon marketing agency should be honest: 99% of the time, businesses are missing out by not establishing or actively growing their Direct-to-Consumer channels. This approach ensures long-term growth, deeper customer connections, and stronger profitability, positioning your brand to succeed beyond the limitations of any single marketplace.
The best agencies prioritize your DTC growth alongside Amazon optimization. They recognize that long-term brand success requires:
Building your direct storefront
A strategic agency helps you develop and optimize your own e-commerce platform where you control the entire customer experience. This owned channel becomes your brand’s foundation, free from marketplace constraints.
Growing owned audiences
Effective partners focus on capturing email lists, SMS subscribers, and social followers that no marketplace can take away. These direct audience connections represent lasting brand equity that transcends any single sales channel.
Maximizing customer lifetime value
The right agency helps turn one-time Amazon buyers into repeat DTC customers through thoughtful retargeting and cross-channel promotions. This transition from marketplace to direct purchases significantly increases profit margins and customer loyalty.
DTC data collection
Strategic agencies implement systems to gather rich customer insights that Amazon never shares. This first-party data becomes a competitive advantage, allowing for personalized marketing impossible within marketplace limitations.
Brand storytelling on your terms
Top-tier partners help you create immersive brand experiences impossible within Amazon’s templated framework. Your direct channels become the place where your brand’s full identity and values truly shine.
Amazon & Your Business
True e-commerce success comes from treating Amazon as a customer acquisition tool while building robust direct channels where deeper relationships and higher margins flourish. The right agency partner will always keep your DTC growth at the center of their strategy, using Amazon thoughtfully rather than letting it dominate your business model.
Conclusion
After exploring these seven myths, it’s clear that Amazon can serve as either a powerful ally or a frustrating drain—often both at once. Yes, the platform grants you access to a massive audience, the trust of Prime, and robust fulfillment options. Yet Amazon’s fees, competition, and limited data can quietly drain profits. The secret is treating Amazon not as a silver-bullet solution, but as one component of a larger multi-channel strategy.
By balancing Amazon’s reach with a strong DTC presence, you stay in control of your margins, customer data, and brand narrative. The brands featured here—Beardbrand, Supply, Peak Design, Ranch Road Boots, and others—illustrate a common arc: quick wins on Amazon often come with long-term trade-offs if you lack a thoughtful plan. Meanwhile, those who approach Amazon strategically, focus on differentiation, and still invest in DTC channels often enjoy the best of both worlds: steady traffic from Amazon alongside profitable, loyal relationships in their own ecosystem.
At Envoli, we specialize in helping brands find that balance across their new product launch and scaling efforts. We guide you through Amazon’s complexities—everything from fee structures to ad optimization—while ensuring you cultivate a robust DTC channel that truly belongs to you. Whether you’re seeking to refine an existing Amazon presence or expand onto the marketplace for the first time, we can design a plan that keeps your margins healthy and your brand equity intact.
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