Sales on Amazon
When is it not worth selling on Amazon? 5 signs that expansion might not pay off
Last updated: 13/11/2026
In 2025, the German e-commerce market reached a net value of €92.3 billion, with Amazon accounting for as much as 63.3%. Such a large sales volume may encourage businesses to launch their operations on the marketplace. However, market size does not guarantee profitability, and simply launching listings does not mean orders will start rolling in.
Entering Amazon requires more than just a competitive product and preparing listings. The health of the category, consumer behaviour, price pressure, and the budget required to gain visibility all matter. Even in a growing market, not every brand has an equal chance of achieving satisfactory results.
Data from the HDE Online-Monitor 2026 report, compiled by IFH Köln, allows us to examine the barriers in German e-commerce and identify situations where entering the marketplace may carry a particularly high financial or operational risk.
Table of contents:
Your product category is not growing
Your product can easily be replaced by a cheaper alternative
Your industry is dominated by brands known from brick-and-mortar retail
You don't have the budget to create an offering tailored to buyer behaviour
You base your entire sales strategy on paid advertising
Summary: When is it better to hold off on entering Amazon?
FAQ – frequently asked questions
You can read this article in 5 minutes.
Your product category is not growing
A low share of online sales in a given category may give the impression of untapped potential. However, it does not always mean consumers are waiting for more offers. Sometimes, limited e-commerce growth is due to barriers that cannot be overcome simply by having a presence on a marketplace.
A good example is the German Heimwerken & Garten category, which covers home improvement and gardening. According to the HDE Online-Monitor 2026, this was the only category that recorded a negative compound annual growth rate (CAGR) of −0.5% between 2020 and 2025.
The reasons behind the limited online sales potential can include, among others, high shipping costs for bulky items, the need for assembly, or consumer preferences for in-store shopping.
This does not mean that every product in such a category is doomed to fail. However, it shows that before entering Amazon, you need to verify actual demand and sales profitability, rather than assuming that a low competitor presence automatically represents a business opportunity. Especially if customer acquisition and order fulfilment costs could eat up a significant portion of your margin.
Before starting cross-border sales on Amazon, it is therefore worth analysing the category's potential, the local competition, and the costs of entering the chosen market.
Your product can easily be replaced by a cheaper alternative
Price competition is one of the greatest challenges for manufacturers and distributors offering mass-market products. The problem becomes particularly acute when the customer sees no significant difference between offerings and makes a decision primarily based on price.
The scale of pressure from Asian platforms is demonstrated by data concerning the German market. Temu and Shein generated a combined turnover of €4.7 billion, accounting for around 5% of the market and reaching 16 million shoppers. Simultaneously, Amazon is expanding its own budget segment, Amazon Haul, which reached a brand awareness level of 47% within four months of launch.
In such conditions, brands offering products without a distinct quality differentiator, brand recognition, or an advantage stemming from proprietary product solutions face an especially tough situation.
If a consumer can easily find a near-identical product at a much lower price, the seller must either convince them to pay extra for their offer or lower their own price. The second scenario leads to mounting pressure on margins.
If your only advantage is an attractive price, and you do not possess sufficiently low purchasing or production costs, entering the marketplace may prove unprofitable. Simply increasing sales volume will not solve the problem if each transaction yields too little profit.
For brands developing their own product range, a well-planned approach to selling on Amazon for manufacturers should take into account product advantages, price positioning, and long-term profitability.
Your industry is dominated by brands known from brick-and-mortar retail
Not all e-commerce categories evolve according to the same model. In some industries, a large proportion of online customers choose retailers they already know from traditional high-street shops.
According to the HDE Online-Monitor 2026, in the German Gesundheit & Wellness category, as much as 66.2% of online turnover belongs to companies originating from brick-and-mortar retail.
This is crucial information for new brands planning to enter this market. Recognisable chains hold an advantage in the form of existing consumer trust, an established market position, and buyer familiarity with their products.
A new brand must build these elements from scratch. This entails additional promotional expenditure and often a longer timeframe required to reach profitability. In practice, winning customers may demand higher advertising spend, particularly when the competition already commands a strong market foothold.
Therefore, before launching sales, it is worth evaluating not only the number of competing offers, but also who actually drives sales in a given category and how strong the positioning of those brands is in the minds of consumers.
If the market is dominated by well-known retailers and your budget does not allow for a gradual build-up of brand awareness, expansion may require more time and resources than initially anticipated.
You don't have the budget to create an offering tailored to buyer behaviour
Simply publishing a product on Amazon is not enough to compete effectively for customer attention. The way the offer is presented also matters, especially in the context of the devices and tools used while shopping.
Data for German e-commerce illustrates just how crucial mobile devices have become. A staggering 61% of turnover comes from smartphones, which is why preparing listings tailored for small screens should never be treated as an afterthought.
Illegible infographics, a product presented too small on the main image, or overly convoluted copy can prevent customers from quickly understanding the offer. If shoppers cannot find the most important information swiftly, the risk of them opting for a competitor's product increases.
The way people search for information prior to purchase is also changing. According to the cited data, 35% of German consumers use AI tools such as ChatGPT or Gemini when researching products. In the 16–19 age bracket, this figure rises to as much as 53%.
This is yet another reason to produce clear, comprehensive, and well-structured product content. Descriptions overloaded with keywords, devoid of key technical specifications, or written in unnatural language make products harder to understand and compare.
Preparing an effective listing therefore requires appropriate resources: visual assets, content adapted to the local language and decision-making habits, as well as an advertising budget to secure initial visibility.
If a company cannot afford to fund these activities, it is worth considering postponing the expansion. Even a competitive product may struggle to sell if its listing fails to capture attention and does not provide buyers with the arguments needed to make a purchase decision.
You base your entire sales strategy on paid advertising
In mature e-commerce categories, gaining visibility involves intense competition. This applies, among others, to the Fashion & Accessoires and CE/Elektro sectors, where the share of online sales stands at 44.2% and 45.1% respectively.
In these segments, sellers present on Amazon compete for the attention of German consumers alongside major retail entities such as Otto, Zalando, MediaMarkt, and Saturn.
For a new brand, this means having to compete in a market where consumers have access to a wide selection of products, and gaining visibility can demand substantial investment.
The problem arises when increasing the advertising budget becomes the only way to generate further orders.
High cost-per-click (CPC) rates can cause customer acquisition costs to outpace sales profits. As a result, a brand may see rising turnover while simultaneously losing profitability.
Therefore, advertising should not be the sole foundation of an Amazon sales strategy. Building the organic ranking of products, improving conversion rates, and—if the nature of the product range allows—fostering repeat purchases are equally vital. An example is the subscription model used in selected FMCG categories.
Without these components, a business risks making its sales completely dependent on constant ad spend. If the margin does not sufficiently cover these costs, simply increasing the budget will only exacerbate the issue.
Summary: When is it better to hold off on entering Amazon?
German e-commerce offers tremendous sales potential, but that does not mean every company should automatically embark on an expansion. Data from the HDE Online-Monitor 2026 highlights how vastly competitive conditions can vary across individual categories, and how heavily consumer behaviour, brand recognition, and price pressure come into play.
Particular caution should be exercised when your category has not shown growth for years, your product lacks a distinct edge over cheaper alternatives, and the competition comprises strong, well-established brands. Equally significant warning signs include a lack of budget for professional listing creation and advertising, as well as margins that fail to cover the operational costs of selling.
Not all of these factors necessarily rule out the possibility of achieving good results. However, their presence should prompt a more thorough analysis before committing to an investment decision.
Before you launch on Amazon, evaluate the potential of your category, your product's genuine competitive advantage, and profitability after factoring in platform fees, logistics, and advertising costs. Only by aligning these elements can you determine whether the expansion rests on solid business foundations or whether it is better to pause until conditions improve.
An experienced Amazon agency can assist with sales potential analysis, competitor benchmarking, and preparing a marketplace entry strategy tailored to your company's actual capabilities and budget.
Because the viability of entering a marketplace is not determined by the size of the market, but by whether your business can sell within it profitably.
FAQ – frequently asked questions
When is it not worth starting to sell on Amazon?
Entering Amazon can be unprofitable when a product has low profit margins, does not stand out from the competition, or belongs to a category with limited growth potential. Another red flag is the lack of a budget for listing preparation, logistics, and advertising. Before launching, it is essential to analyse demand, competition, and all the costs associated with trading on the marketplace.
Is selling on Amazon.de still profitable?
Amazon.de offers access to a large e-commerce market, but merely having a presence on the platform does not guarantee profit. Profitability depends on the product category, level of competition, margins, logistics costs, and Amazon Ads spend, among other factors. Therefore, the decision to enter the German marketplace should be preceded by an analysis of the specific product range's potential.
How can you check if a product has sales potential on Amazon?
You need to analyse demand in the given category, competitor pricing, the number of similar listings, and opportunities for product differentiation. It is also vital to estimate selling fees, Amazon commissions, logistics, and customer acquisition costs. Only by comparing projected revenues against costs can you determine whether a product can yield a satisfactory margin.
Can you successfully compete on Amazon with cheap products from China?
Yes, but competing solely on price can be difficult for businesses without a genuine cost advantage. Products that stand out in terms of quality, functionality, brand recognition, or added customer benefits have a much better chance. If shoppers see no difference between products, price frequently becomes the deciding factor.
How much does it cost to start selling on Amazon in Germany?
The cost of launching on Amazon.de depends on the type of products, the logistics model, and the planned scale of operations. The calculation must factor in marketplace fees, order fulfilment, listing creation, potential warehousing, and an advertising budget. There is no one-size-fits-all figure, so costs should be estimated on an individual basis before beginning an expansion.
Is Amazon Ads enough to achieve sales on Amazon?
Amazon Ads can help gain visibility and secure initial orders, but it cannot compensate for a non-competitive product or a poorly prepared listing. If campaigns incur high click costs while the listing has a low conversion rate, increasing the budget can harm profitability. An effective strategy must combine advertising, listing optimisation, and the development of organic visibility.
Why is mobile optimisation important for Amazon listings?
A large proportion of online purchases in Germany are made on smartphones, making product presentation on small screens critically important. Legible imagery, clear infographics, well-crafted titles, and key product specifications help buyers evaluate an offer more quickly. Neglecting these elements can lower a listing's performance.
How should you prepare a business to enter the German Amazon marketplace?
Preparations should begin with an analysis of the market, the competition, and product profitability. Next, you need to plan logistics, prepare listings in German, verify platform requirements, and set a promotional budget. A well-crafted market entry strategy for Amazon.de helps mitigate the risk of investing in products that lack sufficient sales potential.
Source of data used in this article: HDE Online-Monitor 2026, compiled by IFH Köln.
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