Here are the five operational realities vendors must prepare for in 2026.

1. Annual vendor negotiations will be more margin-focused.

As Amazon continues to formalize cost recovery and efficiency standards, annual vendor negotiations are expected to prioritize funding structure, freight terms and profitability. Clear, defensible cost data will be increasingly important in these conversations.

What to do now: Build a cost-to-serve model. Quantify the value you already deliver, such as high Electronic Data Interchange (EDI) accuracy, low defect rates and consistent on-time performance. These metrics translate directly into cost savings for Amazon and help you defend your terms. Shifting the conversation from “price” to “total value” is essential.

2. Inbound compliance is entering a zero-tolerance phase.

Amazon is tightening rules across EDI, carton-level accuracy and packaging standards. The goal is a fully automated receiving process. Anything that requires manual review will lead to rejections and chargebacks.

What to do now: Automate validation across the entire workflow. Every PO, label and ASIN should be confirmed before shipment. If your systems cannot catch issues immediately, you increase the risk of inventory being rejected at the dock, which stalls sales momentum and disrupts replenishment.

3. Low-inventory-level (LIL) fees at the FNSKU level raise the stakes.

For 2026, Amazon will apply LIL fees at the individual FNSKU level instead of the parent ASIN, meaning each variation you sell will be evaluated on its own. A single popular SKU selling out can now trigger fees even when the rest of the line is fully stocked, creating new margin pressure.

What to do now: Run a variation-level profitability audit. If a specific size or color cannot maintain the inventory stability required under the new rule, consider removing it from Vendor Central or shifting it to Direct Fulfillment. Slow-moving variations can no longer hide behind top-sellers.

4. Purchase order (PO) delays and partial orders will remain common.

Despite Amazon’s broader push for efficiency, PO volatility is expected to continue in 2026. Delayed or partial orders can create major disconnects between supply chain planning and campaign execution. A cut PO during a product launch can turn your ad spend into wasted investment.

What to do now: Strengthen real-time PO visibility. You need immediate insight into order changes, shipment status and confirmation timelines. This allows your teams to adjust spend, pacing or retailer promotions before inefficiencies compound.

5. Tariff and sourcing shifts will pressure margins.

Global trade volatility and rising tariffs, especially on goods from China, will continue to affect landed cost and vendor profitability. Relying on a single sourcing region increases risk in a year where Amazon is tightening its financial expectations.

What to do now: Pursue a two-track approach. Explore diversification into regions such as Mexico or Vietnam while also stabilizing near-term costs. Forward buying in early quarters, reviewing contracts for tariff pass-through clauses, and rebalancing your ASIN mix can help protect margin throughout 2026.

Aligning with Amazon’s direction. 

While recent conversation around Amazon has focused on advertising improvements, the larger message applies across the ecosystem. Amazon is pushing for fewer bottlenecks and stronger operational discipline, and vendors who match that rigor will be better positioned in 2026 negotiations, replenishment and long-term growth. The opportunity remains significant, but the margin for error is shrinking. Success now depends on connecting your marketing vision with operational accuracy so talent, technology and data work together rather than in silos. Now is the time to tighten your foundation and ensure your Vendor Central workflows meet Amazon’s rising expectations. Reach out if you want help assessing your readiness for the year ahead.

This year, Amazon’s keynotes reinforced a clear message: positioning their ad offering as “full-funnel, at scale, for everyone.” Every announcement aimed to unite ad types, streamline operations and measurement for advertisers, and make creative more accessible to brands of all sizes. Here’s what advertisers need to know about the new product lineup, and what it tells us about the future of Amazon Ads.

Here’s what’s rolling out across Amazon’s newest products.

1. Eliminating silos between awareness and conversion. 

Amazon is making it easier for advertisers to connect upper- and lower-funnel campaigns, closing gaps that often make measurement and optimization harder. Brands should keep an eye out for:

• Full-Funnel Campaigns, a new campaign type that expands on last year’s Brand+ and Performance+ formats. Amazon cited examples in which Brand+ and Performance+ are most effective when run together, such as a 144% lift in conversion rate and a 35% improvement in cost per acquisition for H&R Block, so they created a product to deliver that effect in one.
• New consolidated interfaces to unite upper- and lower-funnel ads in one view. The new Campaign Manager combines AMS/Ad Console and Amazon DSP into a single workspace. This provides a complete view of Sponsored Products, Sponsored Brands, and programmatic campaigns in one place. Crucially, it also includes new unified metrics so brands can make apples-to-apples decisions. Amazon is doing the same for streaming and linear TV, launching Complete TV and Inventory Hub to unite digital and traditional media planning.

2. Democratized access to creative generation and deeper insights, even for smaller advertisers. 

Amazon is improving access to advanced creative and analytical tools for brands of all sizes. These updates help teams large and small act faster and test new ideas with fewer barriers. Brands should experiment with:

• Ads Agent, an AI assistant that uses natural language to understand ad performance, make changes instantly, uncover new audiences, and pull insights from Amazon Marketing Cloud (AMC) without SQL knowledge or data science support.
• The improved Creative Studio produces image, video and audio ads using generative AI with greater fidelity and complexity than prior iterations of the tool. For brands without a deep bench of design resources, this enables faster creative production and more relevant messaging during shopping “micromoments” and holidays.

3. A more educational shopper experience to reduce “leaky” funnels. 

These updates make it easier for shoppers to educate themselves and overcome friction while in the middle of their Amazon search journey, ultimately boosting sales for brands who need to educate their buyer in order to win the sale. The Amazon results feed will now include:

• Sponsored Products Video, for brands to showcase motion assets directly within search results. This could be key for challenger brands to highlight their differentiators without requiring users to reach the product detail page.
• AI Prompts, powered by Rufus, to anticipate shopper hesitations and educate them while they compare products. The in-feed Q&A modules will guide shoppers toward purchase by educating them when they’ve slowed their scroll through the results list.

Amazon’s changes point to two major themes.

Amazon is making it clear that they’re investing in taking control of advertiser perception of their offering, and are aiming to get two major themes across to brands:

• They’re in your corner and responsive to your feedback. In all main stage talks, Amazon leadership reinforced how many of the product evolutions they were announcing were direct results of feedback from brands and partners. For example, advertisers have long asked for more accessibility and actionability from the gold mine of shopping data Amazon controls; in response, they expanded AMC’s ad-traffic lookback window from 13 to 25 months, launched country-level budget/bids in Amazon Ads Console, and premiered the Ads Agent for generating SQL queries faster. Additionally, even evolutions of existing products—like the launch of Sponsored Products Video—achieved an audible reaction of delight on the conference floor because brands have long asked for more engaging ways to stand out on the results page.
• They’re more than the largest point of purchase, they’re the most integrated ecosystem in digital commerce. Amazon is making the most of their huge investments in upper-funnel properties (from Prime Video to Thursday Night Football to Twitch) with the launch of dedicated products for closing the gap between discovery and conversion. In the context of their history as an ad platform, these rollouts are an even firmer push into efficient, insight-driven advertising across the full funnel. Amazon is solidifying their shift from a purchase-focused platform into a connected ecosystem that partners with brands to drive discovery and educate shoppers, not just convert demand.

Prepare for the next chapter of Amazon advertising. 

This year’s unBoxed event showed a clear direction for where Amazon advertising is heading. Campaign management, creative production, and performance measurement are becoming unified to give advertisers more speed and clarity across the funnel. Looking to 2026, Amazon is positioning itself as an integrated partner for brands throughout the entire buyer journey, not only at the point of purchase.

As innovation accelerates, the opportunity lies in choosing the advancements that support long-term goals and applying them in measurable ways. Amazon Ads’ unBoxed 2025 offered a preview of what the future of commerce media will look like when insights, creative and optimization work within one connected ecosystem. If you’re exploring how these updates could fit into your 2026 plans, reach out and we can help assess which changes are worth testing.