Amazon’s $1B Compliance Overhaul Reshapes the Supplement Industry

The dietary supplement industry is undergoing a major transformation as Amazon implements one of the most ambitious compliance initiatives in e-commerce history. With over $1 billion invested in 2024 alone, Amazon has strengthened its product verification systems, affecting how supplements are manufactured, tested, and sold online.

A Turning Point for Supplement Sellers

In April 2024, Amazon introduced mandatory third-party verification for all dietary supplements. Sellers are now required to obtain certifications from approved Testing, Inspection, and Certification (TIC) organizations such as NSF International, UL, Natural Products Association, SGS, or Eurofins. This verification is retroactive, meaning existing products without proper documentation risk delisting.

The requirements go beyond simple testing. Sellers must submit:

Current Good Manufacturing Practice (cGMP) certificates

Complete product specifications

Certificates of analysis for all ingredients

Stability testing data

Detailed manufacturing records

For smaller brands and international sellers, gathering this documentation proved challenging, leading to significant product removals from Amazon’s platform in the first six months.

Rising Costs of Compliance

The financial impact of these changes is substantial. Standard product testing costs range from $400 to $800 per SKU, while high-risk categories such as weight loss, sexual enhancement, and joint health supplements can exceed $2,000 per SKU. For sellers with multiple products, this can mean six-figure annual compliance costs just to maintain eligibility on Amazon.

Contract manufacturers now play a pivotal role, offering not only production services but also guidance and support for meeting Amazon’s documentation and testing standards.

Legal Liability and Marketplace Dynamics

Recent legal developments have increased potential liability for online marketplaces. Courts have clarified that platforms like Amazon may be considered part of the sales chain under certain circumstances, exposing them to potential consequences for misbranded or non-compliant products.

According to industry experts, this has pushed Amazon to adopt stricter compliance standards, effectively setting marketplace-wide expectations that often exceed federal regulatory requirements.

Review Hijacking and Consumer Trust

The FTC has actively pursued deceptive practices such as “review hijacking”, where new products inherit positive reviews from unrelated items. A landmark enforcement action resulted in a settlement highlighting the importance of authentic customer feedback. This emphasizes that trust and transparency are critical for online supplement sales.

Scrutiny of “Made in USA” Claims

Another key area of regulatory focus is the authenticity of “Made in USA” claims. Many third-party sellers, especially those with international supply chains, face challenges proving that their products meet FTC standards for domestic manufacturing. Amazon now requires detailed documentation for any such claims, and products with unverified claims may be delisted or face further legal scrutiny.

Technology and Compliance Infrastructure

Amazon’s $1 billion investment supports machine learning systems, software development, and investigative teams tasked with detecting counterfeit products, misleading claims, and review manipulation. Automated systems scan listings for potential compliance issues, while manual audits handle complex cases.

Despite these measures, industry observers note that the marketplace model allows some non-compliant products to reach consumers before detection, highlighting ongoing challenges in enforcement

Industry Adaptation and Future Outlook

Responses to these new requirements vary. Large brands with established quality systems have largely embraced the standards, gaining a competitive advantage over smaller or undercapitalized sellers. Many smaller brands have exited the marketplace or consolidated under larger manufacturers capable of meeting compliance demands.

Contract manufacturers now offer end-to-end compliance support, transforming their role from simple production partners to strategic collaborators. As regulatory expectations evolve, Amazon and other major retailers are expected to further tighten testing and documentation requirements, reshaping the dietary supplement landscape for the digital age

Conclusion

Amazon’s compliance overhaul demonstrates the growing influence of online marketplaces in setting industry standards. Sellers must navigate complex regulatory and documentation requirements, while consumers can expect higher levels of transparency and product integrity. As the marketplace ecosystem evolves, compliance expertise will become an essential differentiator in the competitive supplement industry.