According to Thrise founder Rajeshkumar, Amazon India brands are increasingly prioritizing profitability over growth metrics. As reported by Thrise, a typical founder scenario involves brands achieving strong GMV growth but struggling with declining bank balances, prompting the question of why revenue growth doesn't translate to actual profitability. The shift represents a fundamental change from the previous decade's focus on listing catalogues and advertising spend to drive GMV, with brands now asking how much they actually retain from each sale after accounting for all fees and costs.
As detailed by Thrise, Amazon's fee structure creates multiple layers of costs beyond the product price. According to the analysis, a single sale incurs referral fees, closing fees, weight-based shipping, storage charges, return handling, and advertising costs before GST, with the actual profitability often hidden beneath these layers. The company found that advertising costs only describe the advertising layer and don't reveal whether orders generate positive cash flow after all fees are stripped out, highlighting the complexity of Amazon's economics for sellers.
According to Thrise analysis, most Amazon India businesses face three primary profitability challenges. The first involves advertising bloat from campaigns that have aged into collecting keywords and placements that no longer work, with budget flowing to them out of habit. The second issue is catalogue neglect, including thin images, weak titles, and lack of A-plus content, forcing advertising to cover for pages that cannot convert independently. The third problem is discount dependence, where every promotion erodes margins until discounts become the primary business model.
As reported by Thrise, the company's approach involves three connected stages: Analysis, Assist, and Accelerate. The Analysis stage focuses on building clear, product-level views of contribution margin to understand where every rupee is allocated. The Assist stage involves rebuilding listings for independent conversion, restructuring advertising around profitable search terms, and implementing pricing strategies to protect margins. The Accelerate stage enables growth on a profitable foundation, where every rupee of advertising spend compounds profit rather than multiplying losses.
According to Thrise, the conditions facing Amazon India sellers are becoming more challenging in 2026. As reported, advertising costs are climbing, AI now manages much of campaign management rewarding sellers with clear profit targets, and festive demand is concentrating into fewer, larger windows. These factors mean brands with broken economics lose money faster at scale, making the shift toward profitability more critical for long-term sustainability. The analysis emphasizes that while GMV measures motion, margin measures whether that motion is taking the business toward profitable growth.
