Amazon sellers turn to TikTok to survive as marketplace margins shrink; sellers say Amazon alone is no longer enough to make ends meet

As Amazon’s marketplace becomes increasingly competitive and operational costs rise, many sellers are finding it harder to maintain profitability. In 2025, sellers reported shrinking margins due to higher advertising costs, fulfillment fees, and intensified competition from venture-backed brands and aggregators. These pressures have prompted a growing number of Amazon sellers to diversify their sales channels, with TikTok Shop emerging as a key alternative.

TikTok Shop has demonstrated rapid growth, generating $9 billion in U.S. gross merchandise value (GMV) in 2024 with a 650% year-over-year increase. The platform’s discovery-driven model, where users encounter products through entertainment content, offers a different customer acquisition dynamic compared to Amazon’s search-based approach. For example, one men’s underwear brand saw a 50–80% increase in Amazon sales during TikTok live streams, while also generating $1.2 million in direct TikTok Shop sales in its first year.

TikTok Shop also provides faster payout cycles and lower platform fees compared to Amazon, improving cash flow for sellers. One brand reported receiving payments within one day of delivery, compared to Amazon’s delayed reserve periods. This liquidity allows for more agile inventory and reinvestment strategies.

However, success on TikTok Shop requires significant investment in content creation and creator partnerships, as 60% of U.S. GMV is driven through the affiliate ecosystem. Sellers must also adapt their product strategies, prioritizing items that demonstrate well in short-form video, such as beauty and personal care products.

While some sellers fear TikTok Shop might cannibalize Amazon sales, data suggests the platform often drives incremental revenue by reaching new audiences. Cross-channel profitability tracking is essential to ensure expansion efforts are financially viable and do not disrupt existing operations.

As margins on Amazon continue to shrink, diversification into platforms like TikTok Shop is becoming a strategic necessity for many sellers.