Billionaire investor Mark Cuban has said he steers clear of companies whose revenue depends heavily on Amazon, calling the fees those sellers pay “INSANE AND UNSUSTAINABLE.” His warning arrives as Amazon layers new charges onto its third-party marketplace and faces a record federal enforcement action, creating a squeeze that should concern anyone betting on platform-dependent businesses. For founders and investors alike, Cuban’s stance is less about Amazon as a company and more about the structural fragility that comes from building on a platform that can change the rules at any time.
Cuban’s Case Against Amazon Dependence
Cuban has been blunt about the risk. In a social media post, he stated that any meaningful reliance on Amazon is “a negative” and asked sellers to share what percentage of their total sales goes to Amazon and Walmart fees. The responses he received showed fee burdens high enough for him to label them “INSANE AND UNSUSTAINABLE” in all caps, a rhetorical choice that left little room for interpretation. His investment thesis is straightforward: if a company’s margins live or die by terms dictated by a single platform, the business carries a structural vulnerability that no product advantage or marketing savvy can fully offset.
From Cuban’s perspective, this is not just a theoretical concern about concentration risk. It is a practical filter for capital allocation in an era where digital gatekeepers control access to customers. A brand that derives the bulk of its revenue from Amazon’s marketplace may appear to be growing quickly, but if Amazon raises fees, alters search rankings, or tightens policy enforcement, that growth can evaporate overnight. Cuban’s skepticism effectively challenges investors to look past topline sales and ask how much of a company’s cost structure and customer access is controlled by a counterparty whose incentives are to extract more value over time.
A Growing Stack of Seller Fees
Amazon’s own policy updates illustrate the trajectory Cuban is flagging. The company introduced an “inbound placement service fee” effective March 1, 2024, averaging about twenty-seven cents per unit for standard-size items and $1.58 per unit for large bulky goods. For a seller moving 50,000 standard-size units a month, that single policy change could translate into an estimated more than $13,000 in additional monthly costs before considering storage, advertising, or returns. Crucially, the fee sits on top of existing referral and fulfillment charges, meaning merchants must absorb a new expense that did not exist in their prior-year financials, complicating forecasting and undermining margin stability.
Another charge followed soon after. A low-inventory-level fee took effect on April 1, 2024, penalizing sellers whose historical days of supply drop below twenty-eight days. Amazon offered a one-month transition credit for fees incurred during April 2024, credited in May, but once that grace period ended the charges applied in full. The policy effectively punishes merchants for running lean inventory, a strategy many small businesses use to preserve cash and reduce the risk of unsold stock. Combined with the inbound placement fee, it shows how Amazon can unilaterally reshape the economics of its marketplace: sellers must either tie up more capital in inventory and logistics or accept higher per-unit costs, with little ability to negotiate or opt out without sacrificing access to Amazon’s massive customer base.
Regulatory Pressure Adds a Second Layer of Risk
Platform fees are not the only headwind for Amazon-dependent businesses. In September 2025, the Federal Trade Commission secured a $2.5 billion settlement against Amazon focused on the company’s Prime enrollment and cancellation practices, in a case filed in U.S. District Court for the Western District of Washington. While the enforcement action targets consumer-facing conduct rather than seller fees directly, it underscores that regulators are willing to impose substantial financial and operational constraints on Amazon’s business. Settlements of that scale can come with behavioral remedies, compliance obligations, and ongoing oversight that may affect internal priorities.
Cuban’s warning gains additional weight when these forces intersect. Rising marketplace fees squeeze merchants from below, while regulatory scrutiny presses Amazon from above, creating an environment in which the platform has strong incentives to protect its own profitability and flexibility. That could mean further adjustments to fee structures, advertising requirements, or algorithmic placement as Amazon responds to legal constraints and seeks to offset new costs. For investors, the key takeaway is not that Amazon will disappear, but that companies whose economics are tightly coupled to its policies face a double exposure: they are vulnerable both to Amazon’s internal profit goals and to external regulatory shocks. Cuban’s decision to avoid those dependencies altogether is one way to manage that risk; at a minimum, his stance suggests that anyone investing in Amazon-centric brands should model not just current fees and rules, but a future in which those terms become steadily more demanding.
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*This article was researched with the help of AI, with human editors creating the final content.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
