Why Amazon and Etsy Are Traps for New Sellers

For years, platforms like Amazon and Etsy have been celebrated as the gateways for entrepreneurs to build thriving businesses. The promise is seductive: instant access to millions of customers, built-in trust, logistics handled for you. But behind the glossy marketing lies a dangerous trap—one that too many new sellers fall into.

I know, because I did.

The Cycle That Enriches Platforms, Not Sellers

At first glance, selling on Amazon or Etsy looks like a low-risk way to start. But the reality is that these platforms are designed to keep sellers locked in a cycle that benefits the marketplace, not the individual business owner.

• Platform Fees: Once you factor in referral fees, FBA/fulfillment charges, payment processing, and “hidden” costs like storage, many sellers give up 35% or more of every sale before they ever see a penny.
• Advertising Dependency: To be visible, you have to pay for PPC (pay-per-click) ads. The algorithms force you to compete with thousands of others—bidding against each other until the only true winner is the platform collecting the ad dollars.
• Returns & Fraud: Return fraud is rampant. Customers treat Amazon and Etsy as risk-free showrooms, ordering products to test and return, or worse, to swap for cheaper knockoffs. The seller eats these costs.
• Tariffs & Inventory Pressure: With tariffs climbing to 50%, margins shrink even further. Meanwhile, algorithmic nudges push sellers to keep more inventory than they’d choose on their own. You’re encouraged to tie up your cash in warehouses, not in growth or innovation.

When you add it all up—fees, ads, returns, tariffs—the question becomes: how much is really left for the seller?

The Illusion of Customers

The harshest truth is this: they’re not your customers, and they never will be.

On Amazon, the “customer” belongs to Amazon. You don’t get their contact info, you can’t nurture the relationship, and you can’t build true loyalty. Etsy isn’t much different. You’re renting access to an audience, not creating your own. At best, you might peel off a few, but most buyers are platform loyal, not brand loyal.

That means the foundation you’re building isn’t really yours. It belongs to someone else.

The Billionaire Problem

Every purchase on these platforms enriches billionaires who already control too much of commerce. Sellers are squeezed until their margins vanish, while the platforms expand into every imaginable vertical—crowding out the very entrepreneurs they lured in the first place.

We need to start asking ourselves: why are we making the rich richer while small businesses struggle to survive?

Breaking Free

After years of running in the hamster wheel, I finally realized: the platforms are trapping me.

So I took the leap. I decided to stop feeding Amazon and Etsy, and instead focus on selling directly to the people who truly matter—my customers.

It’s not as easy as listing a product and hoping the algorithm favors you. It means building your own store, owning your customer relationships, and putting long-term growth over short-term platform scraps. But it also means that when you win, you win for yourself.

A Call for Support

If you’ve ever wondered why your favorite small brands disappear, this is why. The system is rigged to favor the platforms, not the people creating the products. The only way to change it is to vote with your wallet.

Support small businesses directly. Buy from their websites. Share their work. Help them build relationships that last.

I’ve made my choice to step off the treadmill. But I can only succeed with your support.

Together, we can stop enriching billionaires and start rebuilding communities where businesses—and people—actually thrive.