As we move into 2026, the marketplace environment continues to challenge brands, demanding agility and a deep understanding of Amazon’s evolving priorities. At Brandwoven, we believe in being proactive partners, addressing the turbulence head-on while driving measurable growth.
Here is a look at the key market realities we observed in recent quarters, the solutions we implemented, and how we’re ensuring success for our brands in 2026.
- Increasing product cost due to tariffs and other factors are conflicting with the consumer’s desire to trade into cheaper products.
- Margin pressures, especially with brands in Vendor Central, is forcing brands to think creatively about their assortment and approach to reaching the Amazon consumer.
The Pressure on Margins for Brands
Amazon itself remains healthy as consumers continue to shift spending online. Although the pace of that shift has slowed in recent years, Amazon has continued to grow through 2 primary channels. Instead of huge increases in retail sales, AWS and marketing services are propelling Amazon ahead. While AWS has little impact on the brands we service, marketing has become increasingly expensive. As Amazon expands its advertising capabilities and encourages brands to lean into this revenue source, it is putting pressure on brands from a margin perspective:
- Many US based brands are struggling to keep pace with their factory direct counterparts who can invest more in marketing
We recognize that for many brands, the traditional Vendor Central (VC) model is becoming increasingly challenging with Amazon leaning on maintaining margins while brands take a hit:
- The vast majority of our clients are struggling to secure price increases as Amazon is more willing to give up buy box and cease purchases for products below profitability targets.
- Many products just aren’t profitable for Amazon and/or the brand with some unable to justify continuing to sell on the platform. One example is less expensive larger products.
- Brands removing assortment from VC.
- Some exploring 3P partners to sell vs the traditional relationship with Amazon.
- VC seemingly becoming a less predictable platform, creating undue stress and uncertainty for brands as they search for stability.
- Increased advertising investment from competitors that brands cannot keep up with, resulting in a loss of market share.
We understand that factors like price increases and competitor investments are often outside of our control. Our commitment, therefore, is to provide actionable management and strategic flexibility.
Strategic Solutions to the Evolving Marketplace Landscape
Our core focus remains on being ready to adjust to changing customer needs. We reject one-size-fits-all approaches and emphasize the need to flex and adapt to unique client situations.
Adaptive Business Models
To mitigate the difficulties inherent in Vendor Central, Brandwoven offers strategic alternatives designed to maintain profitability and control:
- Negotiating Cost Increases with Cost Support Agreements (CSAs): We have noticed a pattern of Vendor Managers (VMs) pushing for CSAs as a requirement of accepting cost increases. CSAs target a NetPPM and will charge monthly/quarterly true-up payments if/when a client’s total business falls below that target threshold. This strategy works well for brands with very tight control over retail pricing and distribution as cost increases almost always result in retail price increases – so CSAs are predictable and low risk. However, CSAs can add uncertainty to the business for most brands.
- Brands Leaving Vendor Central: Some brands are being dropped by VC or are no longer managed and can get permission to exit. When this happens, we encourage brands to explore alternative methods, like leveraging a Seller Central sales model instead (which can often come with increased price control and profitability).
- Explore 3P Relationships with a Reseller: To break away from complicated direct Amazon relationships, some brands prefer an exclusive reseller model where products are sold to a trusted 3P partner who then manages the entire VC account and relationship with Amazon.
Focusing on Controllable Growth
When faced with external pressures, our efforts shift to where we can drive tangible results. We are focused on mitigating pressures by shifting efforts to controllable pathways, like improved digital merchandising. We strive to be more proactive and action-oriented, ensuring our management approach explains why numbers look a certain way and provides concrete, actionable solutions.
Our Agency’s Plan for Growth During a Volatile Year
Despite the challenging business environment this year, Brandwoven grew and had a successful 2025. Our strong performance is a testament to the effectiveness of our adaptive strategies:
- Despite some challenges, many of our brand partners continue to grow. As a result, we had our best year ever for the company.
- We invested heavily in our branding, messaging, and agency positioning, going through a complete rebrand in late 2024 that has helped us better promote our premium service offerings and attract right-fit prospects.
- Client service remains a top priority for us, with many of our partners staying with us for years (our average client tenure is nearly 3x the industry average). We remain committed to consistent growth even in volatile years, which has afforded us an awesome group of long-term partners.
- We are excited to also be working with many new brand partners and look forward to their success for years to come.
We are committed to helping our clients thrive through the current market turbulence. By offering flexibility, deep marketplace knowledge, and diversified solutions, we’re positioning our partners and agency for success.