Amazon Advertising
Ecommerce News 2025 Recap: Tariffs, TikTok, and the Rise of AI
If you lead Amazon growth for a brand, 2025 probably felt like a year you’re still unpacking. Tariffs shifted without warning, competition intensified, and AI began reshaping how shoppers discover and choose products. Many brands entered 2026 with new questions about supply chains, advertising efficiency, and where demand truly starts. This post is a strategic recap of a year-end conversation between Liran Hirschkorn, CEO of Incrementum Digital, and Yoni Mazor. It highlights the most important shifts across Amazon and e-commerce in 2025 and pulls out clear, high-level takeaways for brands as they plan for 2026.
Learn How to Make Listings That Convert in 2025!
Read our step-by-step guide on how to optimize your listings using Rufus AI insights. Sign up for our newsletter and get your copy for free!
Show me how
Tariffs & Global Trade Tensions
Tariffs came back hard in 2025, and not just on China. The big headline was the April 2 “Liberation Day” package, which introduced a broad baseline tariff and higher “reciprocal” rates for many countries. Vietnam was a clear example of why brands felt there was “nowhere to hide.” Many companies had already shifted sourcing there, then faced the risk of steep new tariffs under the reciprocal framework, followed by shifting timelines and deal talk.
The practical result for operators was uncertainty. When policy moves can change quickly, brands hesitate to place POs, forwarders get whiplash, and planning cycles break.
Impact on supply chain, margins, and inventory planning
Supply chain volatility
Tariffs and trade uncertainty created a ripple effect across supply chains, margins, and inventory planning. Order timing became unpredictable as some brands rushed purchases to beat tariff deadlines while others paused imports altogether to avoid bringing inventory in at peak duty levels. Freight strategy shifted as well. When timing mattered more than cost, faster and more expensive shipping options became a necessary tradeoff.
Margin compression
Margins came under immediate pressure as higher tariffs increased landed costs overnight. Brands that could not raise prices quickly saw profitability squeezed, while those that did raise prices often faced softer conversion when competitors had different sourcing structures or lower tax exposure. In many categories, pricing power became uneven, amplifying competitive pressure.
Inventory planning stress
Inventory planning also became more stressful. Brands with strong cash flow increased buffer stock to protect against disruption, accepting higher carrying costs in exchange for stability. Others took the opposite approach, reducing forecast risk by spreading orders across suppliers or shortening reorder cycles, even when that meant sacrificing unit economics.
Strategic pivots brands used
1) Hong Kong-based DTC shipping and “wait-and-see” imports – Some brands used Hong Kong as a staging point and shipped DTC to avoid committing to a large U.S. import at a worst-possible tariff moment. It is not “free,” but it can reduce timing risk by paying duties on smaller flows instead of one bulk entry.
Important nuance: policy and carrier behavior mattered here too. Hongkong Post, for example, announced it would stop sending parcels to the U.S. as de minimis rules shifted, which pushed brands toward private couriers and alternative logistics setups.
2) Customs code optimization – Brands leaned harder into classification accuracy because the HS/HTS code determines the duty rate. Small classification errors can create large cost swings. This is where a strong customs broker and a willingness to challenge assumptions pay off.
- Use the official U.S. Harmonized Tariff Schedule to validate duty rates.
- Use CBP ruling resources when classification is unclear.
- Consider requesting formal guidance if needed.
3) Geographic diversification – 2025 reinforced a basic lesson: diversifying outside China is helpful, but it is not a guarantee. Vietnam and other alternatives can still get hit. The best operators treated diversification as a portfolio strategy, not a single move.
Fairer Competition: US Sellers vs. Chinese Giants
For years, many U.S. brands felt like they were competing in a structurally uneven market. The rules technically applied to everyone, but enforcement and economics often favored overseas sellers shipping directly to U.S. consumers. In 2025, that imbalance finally began to correct.
The de minimis loophole — and why closing it matters
The de minimis rule allowed shipments valued under $800 to enter the U.S. without duties or full customs processing. It was originally designed for administrative efficiency decades ago, long before modern e-commerce and high-volume cross-border shipping existed.
Authoritative background on the intent and evolution of the rule is documented by the Congressional Research Service and U.S. Customs.
As cross-border marketplaces scaled, this exemption became a major pricing lever. Overseas sellers could ship millions of individual parcels directly to U.S. consumers while avoiding duties that domestic brands pay when importing inventory in bulk. This structural advantage helped fuel extreme price competition and made it difficult for U.S. brands to compete on unit economics alone.
This distortion has been widely covered by trade and policy analysts examining the rise of platforms like Shein and Temu.
In 2025, U.S. trade authorities moved to suspend broad duty-free treatment under de minimis. The White House and Customs made clear that the exemption no longer matched modern e-commerce realities. Once duties and standard customs requirements apply at scale, the economics of the direct-from-factory model change quickly.
Amazon’s data-sharing with Chinese tax authorities
At the same time, enforcement tightened on the tax side. In 2025, China expanded platform-level reporting requirements for cross-border e-commerce. Amazon formally notified sellers that it would share certain sales and tax-related information with Chinese authorities in line with updated regulations.
Amazon’s own seller documentation confirms the scope of this reporting shift.
This change has real economic consequences. Increased tax transparency raises compliance costs, compresses margins, and forces sellers to rethink pricing strategies. As enforcement increases, sellers that previously relied on opacity lose a key advantage.
Independent reporting has highlighted growing concern and operational changes among Chinese sellers as a result.
Early signs of a more level playing field
Taken together, these changes signal a meaningful reset. The de minimis advantage that fueled aggressive cross-border pricing is shrinking, and tax transparency is increasing. That combination does not eliminate competition, but it removes artificial cost advantages that distorted the market for years.
Market analysis shows that some China-based sellers are already restructuring legal entities or adjusting operations in response to these pressures.
For U.S. brands that already operate with full landed costs, tax compliance, and domestic inventory, the competitive landscape is becoming more rational. Not perfectly level, but materially closer than it has been in a long time.
AI Is the New Front Door of E-commerce
Search did not disappear in 2025, but it changed shape. Increasingly, product discovery now starts with an AI conversation, not a marketplace search box. For brands, this shift has major implications for visibility, traffic, and conversion.
The rise of ChatGPT and AI-assisted product discovery
OpenAI made this trend explicit by launching “shopping research” inside ChatGPT. The pitch is simple: describe what you want, and ChatGPT builds a guide that helps you choose instead of forcing you to sift through dozens of product pages. That changes the funnel because the filtering happens before the click.
On the measurement side, third-party reporting in late 2025 showed AI referrals into retailers increasing around peak shopping periods. The exact share of total traffic is still early, but the direction is clear: AI is becoming a real referrer, not a novelty.
Amazon’s Rufus and growing personalization in search and ads
Amazon didn’t sit still. Rufus (Amazon’s generative AI shopping assistant) is designed to answer shopping questions, compare products, and guide decisions in a more conversational way than traditional search. Amazon’s own announcements frame Rufus as a major layer in the shopping experience, not just a feature.
By late 2025, Amazon pushed Rufus further into personalization, including features that use context like activity, purpose, and shopping behavior to recommend and even automate parts of shopping. This matters for brands because “one search result for everyone” becomes less true over time, and the ad experience becomes more tailored too.
Generative Engine Optimization (GEO) and why Reddit/listicles matter
As AI answers become a starting point, brands need to think beyond classic SEO. GEO (Generative Engine Optimization) is the practice of shaping content so your brand is more likely to appear as a trusted source inside AI-generated answers. In plain English: you’re optimizing for the summary, not just the ranking.
This is where Reddit, listicles, and third-party editorial content come back into the spotlight. AI systems frequently pull from what’s already published and discussed online. Reddit content has become especially valuable in this ecosystem, which is why its data has been formally licensed for AI training and retrieval. That’s a strong signal about where AI engines are getting their “real-world” product sentiment and comparisons.
The takeaway for 2026 is simple: if your brand is invisible in the sources AI trusts, you can lose the shopper before they ever reach your PDP. Brands that win will build an “AI-readable” footprint: credible third-party coverage, strong comparison content, and real conversation happening in places like Reddit.
Amazon Advertising & AMC Evolution
Amazon advertising continued to mature in 2025, not by adding more surface-level placements, but by quietly changing how targeting, measurement, and optimization actually work. The biggest shift was access to data that used to be gated.
Amazon Marketing Cloud goes mainstream
Amazon Marketing Cloud (AMC) moved from being an enterprise-only tool to a core part of the Amazon advertising stack. In 2025, Amazon made AMC broadly available inside Seller Central and Vendor Central, giving more brands access to audience creation and path-to-conversion insights.
AMC allows advertisers to analyze anonymized shopper behavior across ads, organic interactions, and purchases. Instead of guessing which touchpoints matter, brands can see how shoppers move from impression to conversion and build audiences based on real behavior, not assumptions. Amazon has positioned AMC as the foundation for more advanced audience targeting and measurement.
Higher CPCs, but higher-quality traffic
As targeting improves, competition intensifies. One clear trend in 2025 was rising cost per click across many categories. This was not random inflation. It was driven by more advertisers bidding on smaller, higher-intent audience pools.
With AMC-powered audiences and in-market signals, advertisers are no longer paying just for keywords. They are paying for access to shoppers who are more likely to convert. For brands that understand their unit economics, higher CPCs can make sense when conversion rates and downstream performance improve. Amazon has explicitly tied audience-based bidding and performance optimization to AMC insights.
New ad formats and deeper analytics
Alongside AMC, Amazon expanded ad formats and analytics capabilities. Sponsored Product video ads gained more prominence in search, allowing brands to run multiple short videos that highlight different features or use cases for the same product. This format gives shoppers more context before they ever reach a product detail page.
Amazon also began rolling out influencer licensing tools that let brands pay creators a fixed fee for content and reuse that content in Amazon ads for a defined period. This bridges creator marketing and performance advertising in a way that feels closer to TikTok’s model, but native to Amazon’s ecosystem.
At the same time, Amazon significantly improved in-platform analytics. Custom analytics dashboards now allow advertisers to build their own views of performance data, and AI-powered insights inside the ad console help surface trends without exporting data into external tools.
Amazon has documented these changes as part of its broader push toward AI-assisted advertising and measurement.
TikTok Shop & DTC: Full-Funnel Commerce Emerges
In 2025, TikTok Shop crossed an important threshold. It stopped being viewed as an experimental channel and started behaving like a true commerce engine, one that can take a customer from first exposure all the way to checkout without ever leaving the app.
TikTok Shop as a discovery-to-purchase engine
Unlike Amazon, which is still largely intent-driven, TikTok Shop is built around discovery. Products surface organically through creator content, live streams, and algorithmic recommendations, often before a consumer knows they want or need them.
TikTok has been explicit about its goal to merge content and commerce into a single experience, reducing friction between inspiration and purchase.
This full-funnel structure is what makes TikTok Shop fundamentally different. Awareness, consideration, social proof, and checkout all happen inside one environment.
Live shopping and creator-first strategies gain traction
Live shopping became one of the fastest-growing formats on TikTok in 2025. Brands are increasingly working with creators who host live sessions, demonstrate products, answer questions in real time, and drive urgency through limited-time offers.
TikTok has continued to invest in live commerce infrastructure and creator monetization tools, positioning creators as the primary sales channel rather than traditional brand ads.
Platform Diversification & Ecosystem Expansion
By 2025, most serious brands reached the same conclusion: relying on a single marketplace, even Amazon, is a risk. The strongest operators began thinking in ecosystems, not channels.
Beyond Amazon: the retail marketplace expansion
Amazon remains the center of gravity for product search and conversion, but it is no longer the only scaled marketplace worth attention. Retailers have continued expanding their third-party marketplace programs, giving brands access to trusted consumer destinations with built-in demand.
Walmart has aggressively grown its marketplace and advertising capabilities, positioning itself as a true second pillar in U.S. e-commerce.
Target+ remains invite-only, but it offers premium brand alignment and a more curated competitive set for qualifying brands.
Home improvement and durable goods brands continue to find success through Home Depot and Lowe’s, where marketplace expansion complements existing retail demand.
Fashion, beauty, and lifestyle brands increasingly look to Macy’s and Nordstrom marketplaces to reach higher-intent, brand-conscious shoppers.
Each of these platforms comes with different economics, operational requirements, and traffic profiles. The opportunity is not to be everywhere, but to be present where your customer already trusts the retailer.
The strategic mix: on-Amazon optimization + off-Amazon brand building
What separated top performers in 2025 was not abandoning Amazon, but complementing it. Brands optimized Amazon for conversion, scale, and efficiency while building demand elsewhere.
Off-Amazon brand building through TikTok, creators, PR, and content increases branded search volume on Amazon. When shoppers arrive already aware of the brand, ad efficiency improves, conversion rates rise, and reliance on generic keyword competition decreases.
This “outside-in” demand strategy has become increasingly common as AI, social commerce, and creator platforms shape early-stage discovery.
When to start on Amazon vs. build demand first
For many brands, Amazon is still the fastest path to revenue. If the product is price-competitive, easily understood, and already searched for, starting on Amazon makes sense. The platform provides immediate access to intent-driven demand.
However, for premium, innovative, or education-heavy products, launching outside Amazon first can be the smarter move. Building awareness through DTC, creators, or TikTok Shop can generate branded demand before entering Amazon. When those shoppers later search for the brand directly, launches are faster, ad costs are lower, and early traction is easier to sustain.
There is no single right path. The decision depends on product type, price point, margin structure, and internal capabilities. What changed in 2025 is that brands now have viable alternatives. Amazon is no longer the only starting line.
The brands best positioned for 2026 are not choosing between platforms. They are intentionally designing how those platforms work together.
2026 Outlook: Bullish, But Only for the Adaptable
Looking ahead, Liran’s view is clear. He is bullish on e-commerce over the next 36 months, but with an important qualifier. Growth will not be evenly distributed. It will reward brands that adapt faster than the market.
Consumer demand is not disappearing. What is changing is how that demand is discovered, influenced, and converted. Brands that rely on the same playbooks from even two or three years ago will feel increasing pressure on margins and efficiency.
AI as a competitive advantage, not a buzzword
AI is no longer optional. Brands that integrate AI into core workflows, from product research and creative development to forecasting and advertising optimization, will operate at a structural advantage.
The impact is not just speed. AI-driven teams can reduce operating costs, identify opportunities faster, and reinvest savings into growth. That creates a compounding effect. Lower costs enable higher ad investment, better creative testing, and faster iteration across channels.
Efficiency and innovation go hand in hand
Cost efficiency will matter more in 2026 than pure top-line growth. Rising CPCs, tighter competition, and more sophisticated consumers mean waste is punished quickly.
At the same time, innovation is what unlocks efficiency. New ad formats, new discovery channels, new content models, and new ways to use data all favor brands willing to test and learn. The brands that win will not be the biggest spenders, but the smartest operators.
Speed and creativity will decide the winners
The advantage in the next phase of e-commerce belongs to brands that think creatively and move decisively. The market now rewards rapid experimentation, cross-channel thinking, and clear strategic focus.
Being bullish on e-commerce does not mean assuming easy growth. It means recognizing that the opportunity is still there, but only for teams willing to evolve. Brands that embrace AI, optimize relentlessly, and stay open to new models of discovery and conversion will be the ones defining the next cycle.
Get Clarity Before You Spend Another Dollar
If rising CPCs, creative fatigue, or unclear performance are slowing your Amazon growth, our Brand Audit is built to pinpoint exactly where the leaks are. We review your current ad spend, creative assets, and overall Amazon strategy to identify what’s driving incremental growth, what’s wasting budget, and where you can scale more efficiently in 2026.
No fluff. No generic recommendations. Just a clear, actionable roadmap tailored to your business.
LET’S DISCOVER WHAT’S POSSIBLE FOR YOUR BRAND
We’re here to listen and uncover opportunities tailored to your unique goals.
Fill out the form to get started, and you’ll walk away with real insights and actionable recommendations—whether we work together or not.
- HANDS-ON LEADERSHIP
- AWARD-WINNING PARTNERSHIPS
- CUSTOM-BUILT SOLUTIONS