On Monday, Seth Godin published a post titled “The Amazon tax,” and the internet did what it does: 1,100 points on Hacker News, 600 comments, a thousand hot takes. Godin’s argument is that Amazon’s advertising system — the sponsored listings that now dominate every search result — is “legal theft” from consumers. He cites the number: more than $30 billion in ad revenue last year.

The actual number is worse. Amazon’s advertising business brought in $68.6 billion in 2025, up 22% from the year before. In the first quarter of 2026 alone, it generated $17.2 billion. That’s not a side hustle. That’s a business larger than the GDP of most countries.

But here’s what Godin gets wrong, and what almost everyone in that comment thread missed: the Amazon tax isn’t a tax on consumers. It’s a tax on sellers. And the people paying it aren’t the victims — they’re the product.

The Toll Road Has No Off-Ramp

When you search for “toothbrush” on Amazon, the top results are ads. But here’s the thing nobody says out loud: there is no “organic” Amazon underneath the ads. On Google, you can scroll past the sponsored links to the real results. On Amazon, the sponsored results are the results. The entire store is the ad.

A seller I spoke with — a mid-sized kitchenware brand that’s been on Amazon since 2016 — put it this way: “We used to pay Amazon a referral fee. Now we pay a referral fee, a fulfillment fee, a storage fee, and an ad fee just to show up in the same search results we used to rank in for free. The ad fee is now our single largest expense. It’s not a tax. It’s rent.”

That’s the shift. Amazon used to be a store that charged a commission. Now it’s a search engine that charges for visibility, and the search engine happens to also ship the products. The distinction matters because stores and search engines have different incentives. A store wants to sell you the best product at the best price. A search engine wants to sell the placement of products, and the best placement goes to whoever pays the most.

The $68 Billion Tell

Here’s the number that should make everyone uncomfortable: Amazon’s ad revenue now exceeds its retail operating margin. The company doesn’t make money selling things anymore. It makes money selling access to people who want to buy things.

That’s not a moral failing. It’s a business model. And it’s a remarkably good one — $68.6 billion in 2025, growing at 22% a year, with margins that make the retail business look like a rounding error. The problem is that nobody has updated their mental model of what Amazon is.

Regulators still think they’re dealing with a retailer. Sellers still think they’re building businesses. Investors still think the retail flywheel is the story. All three are wrong. Amazon is an advertising company that happens to own a logistics network. The store is the bait. The ads are the product.

Who Should Be Worried

Godin’s framing — “Amazon is stealing from customers” — is emotionally satisfying but strategically useless. Consumers aren’t being stolen from. They’re being sold to, which is a different thing, and one they’ve proven remarkably willing to tolerate. The people who should be panicking are the two million third-party sellers who built their livelihoods on Amazon’s platform and are now discovering they’re just tenants in someone else’s mall, paying rent that goes up every quarter.

And the regulators. If Amazon is an advertising company, then the antitrust conversation needs to change. You don’t regulate a search engine the way you regulate a retailer. You regulate it the way you regulate Google — which is to say, you ask hard questions about whether the company that controls the search results should also be the company that sells the ads in those results.

Godin is right that something broke. He’s just wrong about what. The Amazon tax isn’t a fee Amazon charges. It’s what Amazon became. And the scariest part is that it happened so gradually, so quietly, that by the time anyone noticed, there was no “before” left to go back to.

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