With major brands like Bath & Body Works finally entering the platform to crush gray market dilution, selling on Amazon in 2026 has officially shifted from an arbitrage playground to a strict test of operational excellence.
There are currently over 700,000 brands enrolled in Amazon Brand Registry, defending their intellectual property and market share more aggressively than ever before. When you combine this with the fact that 9.48 million American small businesses are active on the platform, the landscape looks impenetrable.
This data naturally leads many to wonder: Is Amazon FBA saturated in 2026? The short answer is no, but the long answer requires a shift in mindset. The marketplace is not full; it is simply professionalizing, and the rewards are now reserved for those with superior operational skills.
Popular Brands Entering Amazon Intensifies Competition
Jungle Scout's Iconic Brands on Amazon: Market Trends and Expert Insights"63% of brands report Amazon sales above $100k per month."
Selling on Amazon in 2026 is becoming increasingly complex as more well-known brands join the platform. A recent report from Retail Dive by Kaarin Moore highlights that Bath & Body Works will officially launch on Amazon early next year to recapture lost revenue.
The company aims to address the estimated $60 million to $80 million in unauthorized sales currently happening on the platform. These gray market listings dilute the brand value and confuse customers who are looking for authentic products.
This move is part of a broader “consumer first formula” designed to place products directly in the path of digital shoppers. It signals a major shift in selling on Amazon in 2026, where large brands no longer ignore the platform but actively manage their presence to protect their margins.
Bath & Body Works plans to start with a limited assortment of evergreen items to test the waters. This initial phase focuses on building strong ratings and reviews before expanding the catalog further.
Key details of the strategic launch include:
- The launch aims to recapture sales specifically lost to the gray market.
- The strategy focuses on “winning in the marketplace” by improving digital discovery.
- This pivot follows a reported 1% decline in third-quarter net sales.
- The brand seeks to stop leaving the platform open for competitors to dominate.
The decision underscores the importance of implementing robust Amazon brand defense strategies to prevent competitors and resellers from hijacking search results. Leaving the channel open allows other sellers to capitalize on brand equity without contributing to its long-term growth.
Leveraging Live Shopping Features for New Product Launches
Brands are also now utilizing Amazon’s advanced advertising capabilities to debut major product lines directly to consumers. A report from MediaPost by Danielle Oster outlines how PepsiCo is leveraging the platform to launch its new Pepsi Prebiotic Cola.
The company is premiering the new drink on Black Friday with a shoppable ad running during the Amazon Prime NFL stream between the Philadelphia Eagles and Chicago Bears. This strategy highlights the growing convergence of live entertainment and instant commerce on the platform.
The integration of live sports and “click-to-buy” technology sets a new standard for selling on Amazon in 2026. Brands are no longer just listing items; they are orchestrating immersive media events to drive immediate conversion.
Key details of the launch strategy include:
- The product debuts with Original Cola and Cherry Vanilla varieties containing five grams of sugar and three grams of fiber.
- Viewers can purchase the 8-packs directly from their screens during the football game.
- The limited-time online release precedes a broader retail rollout planned for early 2026.
- Distribution channels include Amazon, Walmart.com, and TikTok to maximize reach.
This move follows PepsiCo’s acquisition of the prebiotic soda brand Poppi to capture market share in the functional beverage category. The company is now blending internal innovation with external acquisitions to rejuvenate its portfolio under its flagship names.
This level of media dominance presents a significant challenge for smaller private labels competing with Chinese sellers on Amazon. It forces all merchants to elevate their creative assets or risk being invisible during high-traffic events.
Direct participation in major retail events also aids in Amazon gray market removal by ensuring authentic inventory dominates the Buy Box. When the brand owner controls the primary offer during a national broadcast, unauthorized resellers effectively lose their ability to capture sales.
Amazon Projected to Overtake Walmart as World's Largest Company
Market dynamics suggest a historic shift in the global retail hierarchy is imminent as Amazon closes the revenue gap with its biggest competitor. A recent analysis by Jennifer Saibil for The Motley Fool predicts that the e-commerce giant will finally overtake Walmart to become the largest company in the world by sales next year.
This transition is driven by a significant divergence in year-over-year growth rates between the two retail titans. While Walmart continues to post respectable single-digit increases, Amazon is delivering double-digit growth across both its retail and technology sectors.
The company is being propelled by “twin growth engines” that combine robust e-commerce performance with staggering advances in artificial intelligence. AWS and AI services are already generating billions in revenue, with a reported $123 billion run rate that shows no signs of slowing down.
This aggressive corporate expansion creates a stable, albeit high-stakes, environment for selling on Amazon in 2026. As the platform invests heavily in faster delivery infrastructure to outpace local retail, the Amazon US marketplace opportunities for third-party sellers continue to expand alongside the corporate giant.
The integration of advanced cloud technology into the retail interface facilitates sophisticated marketing tools, such as the Shoppable video ads Amazon recently deployed for Pepsi during live NFL broadcasts. These innovations demonstrate that the company is focused on leveraging its tech dominance to shorten the path from discovery to purchase.
Key factors driving this market leadership include:
- Amazon is currently trailing Walmart by only $23 billion and is expected to close this gap within the next year.
- The AI market opportunity alone is projected to reach between $3.5 trillion and $4.8 trillion by 2033.
- CEO Andy Jassy notes that the majority of global IT spend is still on-premises, signaling massive future growth for the cloud division.
- The company is improving its value proposition by adding more products and increasing delivery speeds to reduce reliance on physical stores.
The Physics of Competition on Amazon has changed
A recent analysis by Anthony Laneau, Global Head of Commerce at VML, drawing on data from the “Amazon Marketplace Trends Report 2026,” challenges the popular narrative that the platform is overcrowded. The report uncovers a “Competition Paradox” where the total number of active sellers has actually declined by 25% over the last four years, dropping from 2.4 million to 1.8 million.
Despite this contraction in the overall seller base, the number of businesses generating significant revenue has exploded. This shift indicates that selling on Amazon in 2026 has evolved from a casual side hustle into a professionalized industry where institutional discipline is the primary driver of success.
The data highlights several counter-intuitive trends that define the current marketplace:
- The U.S. Remains King – New sellers in the U.S. have a 60% chance of making their first sale within a year, dwarfing success rates in Germany and the UK.
- Traffic Density is Up – There is 30% more traffic available per active seller than four years ago, increasing the viability of micro-niches like “sourdough starter jars.”
- Million-Dollar Growth – The number of sellers generating over $1 million annually has nearly doubled to 100,000, while those exceeding $100 million surged from 50 to over 230.
- Veteran Dominance – Over 60% of the top 10,000 sellers registered their accounts before 2019, proving that time in the market beats timing the market.
- Chinese Seller Majority – Chinese sellers now account for 57% of those exceeding $1 million in revenue, forcing U.S. brands to compete on quality rather than price.
This professionalization of the “commerce battleground” means that casual participation is no longer a viable business model. Sellers aiming to scale Amazon business to 10 million or more must now leverage data and operational excellence to compete with established veterans.
The rise of Chinese manufacturing dominance has fundamentally changed the competitive dynamic, making price wars a losing strategy for domestic brands. Companies now require Amazon profit margin protection services to build defensible moats based on brand identity and customer experience.
With 69% of sellers still operating in just a single marketplace, there is also a massive “blue ocean” opportunity for those willing to navigate global expansion. However, executing these complex strategies often requires professional Amazon account management to ensure consistent execution across multiple regions.
For brands that lack the internal infrastructure to handle these demands, partnering with an Amazon agency for brand growth is often the most efficient path to scale. Navigating this complex landscape often compels specialized brands to hire an Amazon agency capable of managing the intense operational rigor now required to win.
Smartscout's Voice of the Seller Support 2024"While competition remains the primary battleground for private label brands, rising FBA fees are the true margin-killer for resellers."
