Amazon Expands Shop Direct

What's Happening

Amazon just expanded its Shop Direct program to accept product datafeeds from merchants. Previously, Amazon's system relied on crawling merchant websites to find products. Now merchants can submit structured feeds directly, and the program has grown to 100M+ products from 400K+ merchants. A self-service portal is coming next. Anything that moves the fee, fulfillment, or returns metrics gets pulled into our weekly cockpit review, and this fits. Anything that moves the fee, fulfillment, or returns metrics gets pulled into our weekly cockpit review, and this fits.

This is Amazon's counter-move to agentic commerce competitors. ChatGPT, Gemini, and Perplexity are all building shopping experiences that pull from the entire internet. Amazon's response: absorb that inventory into its own ecosystem. If every merchant's catalog is already inside Amazon, there's less reason for shoppers to search elsewhere.

For 3P sellers, this changes the competitive landscape. Off-Amazon merchants who previously had zero presence on the platform can now appear alongside your listings. They don't pay referral fees the same way you do. They don't need to manage FBA. And they get access to Amazon's 200M+ Prime members.

Amazon's Four Inventory Buckets (2026)

Amazon now operates four distinct fulfillment models simultaneously. Brands can participate in all four, creating what industry analysts call "Ultra-Hybrid" distribution. Here's how they compare:

The datafeed expansion primarily affects Shop Direct. Instead of Amazon's crawlers slowly indexing merchant sites, merchants now push their full catalogs into Amazon's system. That's how you go from thousands of products to 100M+ in under a year.

What This Means for 3P Sellers

The competitive dynamics break down differently depending on your business model:

The 100M+ product figure is staggering. Amazon's 3P marketplace currently has around 350M+ listings. Adding 100M products through Shop Direct increases total selection by nearly 30%. That's more competition for every search query, more options for every customer, and more pressure on your listing optimization to stand out.

Why Amazon Is Doing This Now

The timing isn't random. ChatGPT, Google Gemini, and Perplexity are all building shopping experiences that search the entire internet. If a customer asks an AI assistant to find them a product, and that product isn't on Amazon, the AI sends them somewhere else. Amazon's solution: make sure everything is on Amazon.

By accepting merchant datafeeds, Amazon can index products faster than web crawling ever could. A merchant uploads a 50,000-SKU feed, and those products are searchable on Amazon within days. Compare that to the months it takes for Rufus to crawl and index a merchant's website. This is Amazon building a defensive moat around product selection.

What You Should Do Now

1. 1.

   Audit your catalog for Shop Direct overlap

   Check whether the brands you sell are also appearing through Shop Direct. If a brand starts selling directly through datafeeds at lower prices, your contribution margins will compress. Use product-level tracking to spot new competitors early.

2. 2.

   Double down on what Shop Direct sellers can't do

   Shop Direct merchants don't get A+ Content, Brand Story, or Sponsored Brands access. Your competitive advantage is the full Amazon ecosystem. Invest in Brand Registry benefits, premium content, and advanced PPC strategies.

3. 3.

   Track your TACoS for competitive pressure signals

   If new Shop Direct competitors enter your niche, you'll see it in rising ad costs and declining organic share. Set up daily performance monitoring to catch shifts early.

4. 4.

   If you're a brand, evaluate Shop Direct as a channel

   Selling through Shop Direct alongside your 3P presence could expand reach. But you need to track multi-channel profitability Carefully. Adding a channel that cannibalizes your higher-margin 3P sales isn't growth.

How Nova Helps

As Amazon's marketplace gets more complex with four different selling models, tracking profitability across channels becomes essential. Nova's profit and loss analytics show you exactly where you're making money at the SKU level, so you can decide which channels deserve investment and which ones are just adding complexity.

With Winners & Losers analysis and Custom Breakdowns, you can quickly identify which products face new Shop Direct competition and adjust your strategy before margins erode. Whether you're an FBA seller Protecting your turf or a brand exploring new distribution, the data tells you what's working.