I want to start with a number that should concern every ecommerce brand that is primarily or exclusively selling on Amazon.
67 percent.
That is the proportion of Amazon sellers who reported declining margins over the past 12 months, according to Jungle Scout's 2026 State of the Amazon Seller report. Not declining sales. Declining margins. Revenue may be holding, but the amount of that revenue that becomes profit is shrinking.
The causes are not mysterious. Referral fees have increased an average of 3 to 5 percent over the past three years. Amazon's advertising cost per click has risen 15 to 20 percent year on year, and there is no meaningful sign of that trend reversing. The number of sellers competing in most product categories has roughly doubled since 2022. And Amazon's own private label brands continue to expand into the categories where third-party margins are highest.
None of this is Amazon being uniquely predatory. It is a marketplace maturing, extracting more value as it becomes more dominant, and creating structural conditions that favour its own first-party operations over third-party sellers who have built their businesses inside its ecosystem.
The response that most sellers eventually arrive at, often after one account health event or one sustained ACOS spike too many, is the same one that should have been part of their business strategy from the beginning: diversification.
I am going to make the case for it here, explain why most sellers delay it for too long, and give you a practical framework for thinking about which channels deserve your attention and in what order.
The risk that most sellers underestimate
When I talk to ecommerce founders about their Amazon dependency, the conversation usually starts with margin and cost pressure. Those are the obvious, measurable problems.
But the risk that I think deserves more attention is operational vulnerability: the risk that something outside your control stops your Amazon revenue without warning, with no guaranteed timeline for resolution.
Amazon suspends accounts. They do it for performance reasons, policy violations, intellectual property complaints, and sometimes for reasons that take weeks of appeal correspondence to understand clearly. When a suspension happens, the revenue does not slow down. It stops. Inventory in FBA becomes inaccessible. Rankings that took months to build begin deteriorating within days. And the reinstatement process, even when handled expertly, is not fast.
If Amazon is your only channel, that scenario is not a manageable setback. It is an existential event.
Amazon also changes fee structures, introduces new policy requirements, and updates its algorithm in ways that can require significant operational adjustment. Each of those changes affects every seller simultaneously, but sellers with multiple channels have the ability to absorb the impact across a broader revenue base. Sellers with a single channel experience the full force of every change with no buffer.
This is not an argument against selling on Amazon. Amazon is still the largest and most profitable marketplace for the vast majority of ecommerce brands selling physical products. Amazon and Shopify combined now control approximately 50 percent of US ecommerce, with Amazon alone holding 35.7 percent of the market. That is an extraordinary concentration of buyer intent, and abandoning it would be strategically indefensible.
The argument is against Amazon as your only channel. The distinction matters.
Where the diversification opportunity actually exists
Not every marketplace is worth a seller's attention. Platform selection for diversification should be driven by where your specific products and buyers are most likely to generate meaningful returns, not by which platforms are generating the most headline coverage.
With that said, three channels are generating genuinely significant diversification results for Amazon sellers in 2026.
Walmart Marketplace is the most directly comparable alternative. Walmart crossed 200,000 active sellers in 2025, which sounds like a large number until you compare it to Amazon's 1.9 million active sellers. Less competition in most categories means meaningfully lower advertising costs and better default organic visibility for new entrants. Walmart's buyer base is large and distinct from Amazon's in important ways: it skews toward value-conscious buyers and is particularly strong in home goods, personal care, and grocery-adjacent categories. For brands in those spaces, Walmart is not just a risk hedge. It is a genuine revenue opportunity with structural cost advantages that Amazon's more crowded marketplace cannot currently match.
TikTok Shop is the channel that Amazon sellers are most curious about and most uncertain how to approach. The platform's growth over the past two years has been genuinely extraordinary. Global GMV reached 64.3 billion dollars in 2025, representing 94 percent year-over-year growth. Projections for 2026 point to over 112 billion dollars globally. In the United States specifically, TikTok Shop generated 15.82 billion dollars in 2025, growing 108 percent from the year before. Those numbers reflect a platform that has moved from experiment to serious commerce infrastructure faster than any channel since Amazon Marketplace itself emerged.
The mechanics of TikTok Shop are fundamentally different from Amazon. Discovery is content-driven rather than search-driven. Creator relationships and affiliate partnerships replace keyword rankings as the primary visibility mechanism. Live shopping sessions, which convert at rates of up to 30 percent compared to the 2 to 3 percent average for traditional ecommerce, represent a sales format that does not exist on any other major marketplace. For brands with visually demonstrable products targeting audiences under 45, TikTok Shop is not a distraction from Amazon. It is reaching a buyer segment that Amazon's search-driven model cannot efficiently access.
Your own Shopify store is the third channel that deserves serious consideration, and the one that delivers the most strategically valuable outcome: customer ownership. Every sale through Amazon generates revenue but leaves the customer relationship in Amazon's hands. The customer data belongs to the platform, not to you. Retargeting, email, loyalty, repeat purchase, and lifetime value all run through Amazon's machinery rather than your own. A direct-to-consumer Shopify operation, even at lower initial volume than your Amazon channel, begins accumulating the customer relationship infrastructure that compounds in value over time and that no marketplace can take from you.
Sellers who add TikTok Shop as a channel to their existing Amazon operation are seeing 15 to 30 percent incremental revenue without cannibalising Amazon sales, according to data from brands tracked across both platforms. The audiences are different enough that the channels tend to be additive rather than competitive.
Why most sellers delay this longer than they should
The most honest answer I can give is operational capacity. Running a well-managed Amazon account is a real job. Adding a second channel, learning its specific requirements, building its content infrastructure, managing its advertising, and monitoring its performance metrics adds genuine complexity.
Most sellers know diversification is strategically sound. They delay it because the day-to-day demands of their existing channel leave them with limited capacity to build something new in parallel.
There is also a psychological dimension to it. Amazon sellers who have built their businesses within the platform's ecosystem have developed deep expertise in how it works, and that expertise is genuinely valuable. Moving into a new marketplace means entering an environment where that expertise does not directly translate. Walmart has different content requirements, a different search algorithm, different advertising mechanics. TikTok Shop requires a content mindset that most product-focused sellers have not needed to develop. The learning curve is real, and the instinct to stay in familiar territory is understandable.
But both of these challenges are more manageable than most sellers assume, particularly when expansion is approached with a proper strategy and the right operational support.
A framework for thinking about diversification sequence
Not every brand should diversify into every channel simultaneously. The right sequence depends on your product category, your current operational capacity, and your specific vulnerability profile.
Start by asking which of Amazon's specific risks concern you most. If your exposure to account health events is your primary worry, Walmart Marketplace should be your first priority, because it provides a directly comparable marketplace revenue stream that keeps generating sales while Amazon issues are resolved. If your concern is the rising cost of customer acquisition eating into margins, a Shopify DTC operation addresses that most directly by eliminating marketplace fees and giving you control over your marketing economics. If your products are visual, demonstrable, and naturally suited to content-driven discovery, TikTok Shop is where the highest-upside incremental revenue exists right now.
Most established Amazon sellers should be actively managing at least two channels by the end of 2026. The brands that wait until a disruption forces the conversation will be building their diversification strategy under time pressure, with depleted resources, and without the runway to do it properly.
The brands that build it now do so with optionality, not urgency.
A framework for thinking about diversification sequence
Not every brand should diversify into every channel simultaneously. The right sequence depends on your product category, your current operational capacity, and your specific vulnerability profile.
Start by asking which of Amazon's specific risks concern you most. If your exposure to account health events is your primary worry, Walmart Marketplace should be your first priority, because it provides a directly comparable marketplace revenue stream that keeps generating sales while Amazon issues are resolved. If your concern is the rising cost of customer acquisition eating into margins, a Shopify DTC operation addresses that most directly by eliminating marketplace fees and giving you control over your marketing economics. If your products are visual, demonstrable, and naturally suited to content-driven discovery, TikTok Shop is where the highest-upside incremental revenue exists right now.
Most established Amazon sellers should be actively managing at least two channels by the end of 2026. The brands that wait until a disruption forces the conversation will be building their diversification strategy under time pressure, with depleted resources, and without the runway to do it properly.
The brands that build it now do so with optionality, not urgency.
The operational reality of running multiple channels
I want to be honest about what diversification requires, because the advice to diversify is often given without adequate acknowledgement of the operational lift involved.
Content cannot be copy-pasted between channels. A listing optimised for Amazon's search algorithm does not perform on Walmart. A product page written for Amazon buyers does not speak the way TikTok Shop content needs to speak. Each channel has its own content requirements, its own buyer expectations, and its own algorithm logic. Platform-native content is not optional if you want meaningful results.
Inventory allocation becomes more complex across multiple channels. Stock that is tied up in Amazon FBA is not freely available for other fulfilment methods. Planning inventory across channels requires either centralised fulfilment infrastructure or careful channel-specific stock management.
Performance reporting and analytics need to operate at a cross-channel level. The sellers who add a second or third channel without building visibility into cross-channel profitability end up optimising each channel in isolation and missing the compound effects and trade-offs that only become visible when you are looking at the full picture.
None of these challenges are reasons to avoid diversification. They are reasons to approach it strategically, with proper planning and the operational capability to execute it well.
Where to start
If you are reading this as an Amazon seller who knows diversification is overdue, the most useful first step is an honest assessment of where your business is most exposed and which channel expansion would address that exposure most directly.
That assessment is something we do as a starting point for most diversification conversations with clients. If you would like to understand how your specific business sits from a platform risk and diversification opportunity perspective, we are glad to have that conversation.
