What level of Amazon revenue concentration is too high?

Answer: There is no universal percentage at which Amazon concentration becomes unacceptable. A company with 40% of revenue from Amazon may be less exposed than one with 20% if the first has strong contribution, diversified demand and transferable capabilities while the second depends on Amazon for discovery, inventory velocity and profit. Boards should evaluate the severity and recoverability of the dependency, not chase a benchmark. The key question is what happens to enterprise value if Amazon performance changes materially.

Why this matters

A single revenue percentage can create false comfort or false alarm. Concentration is multidimensional and should be judged against economics and strategic alternatives.

What the board should examine

  • Revenue versus contribution concentration
  • Dependence by SKU and customer segment
  • Advertising and search dependence
  • Fulfillment and inventory exposure
  • Time and cost required to replace lost demand

What good looks like

Management can quantify the major Amazon dependencies, explain why the concentration is economically rational, and identify practical mitigation steps without destroying attractive economics.

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