Amazon reportedly makes more profit from ads sold to sellers than from selling products — so why does that matter now?

This explores how much of Amazon's profit comes from selling ad placements to marketplace sellers, rather than from selling goods. The corpus has no audited figure for Amazon's profit share, so it can't give you an exact percentage. What it does show is why the number matters: the argument rests on advertising making more profit than retail, not on its share of revenue. Todasco argues that at Amazon, advertising produces more profit than product sales do, and reads Amazon's decision to block Meta's Muse shopping agent as a move to protect that ad income (Why did Amazon block Meta's Muse from its marketplace?). Lipsman's analysis of Emarketer's 2029 forecast explains the gap. It assumes roughly 60% operating margins on retail media and about 10% on ecommerce, which makes ad dollars about six times as profitable as sales dollars. On those assumptions, retail media still produces about ten times more operating profit than AI-agent sales in 2029 (Does retail media or agentic commerce offer bigger margins by 2029?).

Here's the part you may not have expected: the threat to that profit isn't a rival store. It's a shopper who never looks at the page. Sponsored listings work because people scan search results and click. An agent ranks products by price and the criteria it was given, so it walks past paid placement. Jarc points to Tripadvisor's Hotels revenue falling 23% in one quarter as an early sign that agents are keeping the demand signal for themselves and making attention ads less relevant (Are AI agents making attention-based ads irrelevant for aggregators?). Rustamli adds a qualification. Agents erode search ads for things people already need, but they can't create new wants, so ad money may move toward influencers and social platforms rather than disappear (Do AI shopping agents destroy search ad revenue while leaving influencer marketing intact?).

Where does the money go if it leaves ads? Jaipuria suggests merchants could turn ad budgets into lower prices and better terms, since a discount is what actually moves an agent. Google's Direct Offers pilot is an early version of this (Could agents redirect merchant ad budgets toward customer savings?). The pull to bring ads back is strong, though. Hedges warns that an agent paid for by advertising has a built-in reason to favor sponsored products (Do advertising-funded shopping agents favor paid product placements?). One experiment found that adding a single sentence to the agent's prompt, naming the consumer as the person it works for, removed that sponsorship bias (Can naming the consumer fix AI agent sponsorship bias?). Another found that when a platform tilts its rankings and sellers tilt their product descriptions at the same time, consumers are harmed more than twice as much as by either alone, even without any coordination (Do platforms and sellers exploit AI shoppers together more effectively?).

The takeaway: the exact percentage matters less than the margin gap. If ads earn several times what retail earns per dollar, then any shopper who doesn't click, human or agent, threatens the most profitable part of the business. That explains why platforms are fighting over who controls the agent.