IRS is Coming for E-Commerce Sellers: Are You Prepared?

From IRS enforcement to Halloween sourcing, tariff updates, and Amazon Q2 insights — here’s what sellers need to know before it impacts your profits.

August 15, 2025

Welcome back to Seller Snacks — your weekly buffet of ecommerce goodness.

This week, we’ve got a stern warning from the IRS, Halloween product trends you absolutely need to know, Q4 planning with the newly-signed tariff truce in play, and Amazon Q2 highlights.

Whether you’re flipping, sourcing, or binge-scrolling Keepa — grab a plate, we don’t judge.

On Today's Menu

Let’s eat!

⚠️ IRS Turns Up the Heat on E-Commerce Sellers

Attention Amazon, Shopify, and Etsy sellers: the IRS has you in sharper focus this year. Tax pros say online vendors who’ve been lax with bookkeeping could face audits or unexpected tax bills in 2025. The agency is rolling out more 1099-K forms and tapping into advanced data tools to catch underreported income, and yes, even smaller sellers are now part of the target list.

The IRS is also syncing data with PayPal, Stripe, and Venmo to spot mismatches between what you earn and what you report. Many sellers are caught off guard when 1099-Ks show inflated totals that include refunds, shipping charges, and canceled orders - amounts the IRS may still treat as income until you prove otherwise.

What to Do:
✅ Keep accurate, up-to-date records for all sales, refunds, and fees
✅ Make sure your reported income matches your payment processor totals
✅ Hold on to documentation to dispute inflated 1099-K amounts
✅ Work with a CPA who understands e-commerce to avoid costly mistakes

Bottom line: In 2025, sloppy bookkeeping isn’t just risky; it’s an open invitation for the IRS to come knocking.

🎃 Halloween 2025 Sourcing Guide: Trends and Hot-Selling Products

Halloween is creeping up, and August is your window to snag the best inventory before the rush. Costumes, decor, and party supplies are already showing signs of flying off Amazon shelves, especially based on what crushed it on Prime Day 2025. Get ahead now, or risk showing up to the party empty-handed.

Halloween Market Snapshot
Amazon’s Halloween sales are driven by seasonal demand for costumes, decorations, and novelty items. Here’s what’s trending:

  • Costumes: Pop culture-inspired outfits like Wednesday Addams and Among Us continue to fly off shelves, with top listings pulling in around $41,000 per month. Plague doctor masks are also holding strong as a classic spooky favorite.

  • Decorations: Inflatables, LED lights, and table props are dominating, especially during Prime Day promotions offering up to 47% off.

  • Pumpkin Carving Tools: Carving kits are in high demand, with top sellers moving roughly 500 units per day.

Top Performing Halloween Products on Amazon During Prime Day 2025

Why These Halloween Items Are Flying Off Shelves

  • Riding the Pop Culture Wave: Costumes tied to hit shows and movies, like Wednesday and Abbott Elementary, are sparking big sales as fans want to dress as their favorite characters.

  • Novelty Meets Safety: Plague doctor masks and motion-activated decorations are appealing for their quirky, post-pandemic twist- fun and slightly eerie, but still “safe.”

  • The Last-Minute Rush: A huge chunk of Halloween shopping happens in the final week, which is why easy-to-set-up inflatables and tabletop décor are moving fast.

What You Should Start Doing:

✅ Snag Seasonal Deals Early: Keep an eye out for supplier discounts and early Halloween promotions to stock up before the rush.
✅ Stick to Hot-Selling Items: Focus on costumes, inflatables, and interactive decorations as these continue to see steady demand.
✅ Maximize Your Margins: Prioritize high-profit, lightweight products like pumpkin carving kits and LED décor to reduce shipping costs while boosting returns.

🏆 Win All Year, Not Just on Halloween

Seasonal spikes like Halloween can boost your sales, but consistent winners are what really scale your online arbitrage business. With FBA Lead List, you get 10+ fast-moving, high-profit OA leads delivered straight to your inbox from Monday to Friday.

Start your 7-day free trial today. Open your first list and start stacking wins, risk-free.

✌️90-Day Tariff Truce: What OA Sellers Need to Know

China and the U.S. just extended their tariff truce for 90 more days (until November 10, if you’re keeping score), keeping import duties stable for now. For Amazon sellers, this isn’t just news - it’s a window of opportunity to plan and profit for Q4.

What This Means for Amazon Sellers:

  • Margin Protection: Stable tariffs mean no surprise cost spikes on popular products from China, so your profits stay intact.

  • Inventory Planning Confidence: You can source Halloween, Black Friday, and Christmas items without the fear of sudden price hikes.

  • Competitive Pricing: Keeping costs predictable lets you maintain prices that attract buyers while staying ahead of competitors.

  • Time-Sensitive Advantage: The truce is temporary. Sellers who act now can lock in deals and stock fast-moving items before the holiday rush.

Quick Action Steps:

✅ Focus on top-selling seasonal items that move fast.
✅ Consider bulk purchases to avoid stockouts during peak season.
✅ Track supplier pricing and lock in deals while costs are stable.
✅ Plan shipping so products arrive in time for Q4 sales spikes.

Even a short reprieve like this can give proactive sellers a meaningful edge. Those who plan wisely now can turn it into a strong Q4 performance.

📈 Amazon Q2 Performance: Insights for Amazon Sellers

Amazon’s online store and third-party seller services both grew 11% in Q2, beating expectations and signaling strong demand ahead of Prime Day. Total net revenue hit $167.7 billion, up 13%, with net income rising 35% to $18.2 billion. For Amazon sellers, the key takeaway is that consumer spending remains robust, despite recent tariff concerns.

Advertising and subscription services also saw healthy gains, up 23% and 12% respectively, showing that sellers can still leverage Amazon’s ecosystem to drive sales. The return of Nike and the launch of luxury brands, along with faster same-day and next-day delivery expansions, suggest continued opportunities in both mainstream and high-demand niches.

For OA sellers, the lesson is clear: consumer demand is holding strong, and top-selling categories are still moving fast. Planning inventory and sourcing ahead of Q4 remains critical, and sellers should keep an eye on pricing shifts as the 90-day tariff truce evolves.

🗞️ Essential Amazon Seller Updates

📣 Customer Reviews Are Evolving: VOC Takes Over
Amazon is retiring the Customer Reviews page on September 30, 2025, replacing it with the Voice of the Customer (VOC) dashboard. Sellers should start tracking VOC trends now, as it offers structured insights on sentiment, returns, and defects, helping you spot issues early and scale smarter.

⚡Offer Prime Exclusive Deals Year-Round
Amazon now lets sellers run Prime Exclusive Deals anytime, not just during Prime Day. These deals target Prime members, giving you extra visibility, dedicated placements, and repeat-customer potential while keeping standard prices for other shoppers. Check the Deals Recommendations dashboard to see which products qualify.

🌟 Amazon Vine Now Accepts Heavy & Bulky Items
Brands in Amazon Brand Registry can now enroll heavy and bulky FBA products in Amazon Vine. By providing free units to trusted reviewers, you can generate early reviews, boost social proof, and increase awareness for new or slow-moving ASINs.

🫀 Poll: Quick pulse check. We’re always looking for ways to help our OA community win. Take a second to share your thoughts so we can bring you more of what matters.

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🧰 Arbitrage Corner — OA Tips, Threads & Tools

☣️ Hazmat Shipping Costs Are Changing — Here’s the Real Deal
Amazon’s new inbound fee rules just made Hazmat shipments trickier and more expensive for OA sellers. In this thread, we broke down exactly what’s changed, how it impacts your margins, and when FBM might beat FBA. If you sell Hazmat, this is one thread you can’t afford to skip.

Want help sourcing Hazmat products that are still profitable under the new rules?
We just launched Uranus, a new beta lead list focused entirely on Hazmat ASINs. It’s available now at a discounted price for early testers.
👉 Check out Uranus here

🤖 Let AI Supercharge Your Amazon OA Biz
Ever wondered what happens if AI runs parts of your Amazon business? From analyzing Keepa charts and spotting risky buys, to generating new sourcing ideas, writing professional customer service messages, and building ready-to-use spreadsheets — this thread from Warner Fields (@FieldsofProfit) shows how AI can save time and boost profits. Click through to see the full breakdown and get actionable tips you can start using today.

🧴 Check Expiration Dates Like a Pro
Selling health & beauty products without visible expiration dates? Tools like Check Fresh let you quickly determine manufacturing dates and approximate shelf life using the lot number. Stay compliant and protect your profits by knowing exactly what you’re selling. Bookmark this!

🧸 Hold Toys, Make Big Profits
Most Amazon sellers flip fast, but some of the real money comes from holding, especially during Q4 when toy demand peaks. In this episode of Clear the Shelf, The Toy Investor reveals how to turn LEGO and collectible toys into long-term profit machines. Learn how to spot profitable leads, track inventory, ride pop culture trends, and maximize ROI across Amazon, eBay, and Walmart Marketplace.

🚦 Stop-and-Go Selling? Find Your Momentum
Ever feel like your Amazon business is stuck in traffic - moving a little, then stalling? This episode of Full-Time FBA dives into why most sellers lose steam (hint: it’s not luck) and shares the key to building sustainable, profit-driving momentum. Reset, refocus, and discover how consistent action can turn small wins into real results.

🎓 This Week in Seller School

📚 Blog Posts

  • How to Calculate Real Amazon Profit in 2025: Fees, PPC, and Hidden Costs by Seller Labs

  • Amazon Review Policy Explained by AMZ Advisers

  • The Inventory Forecasting Blueprint for FBA Sellers by eComEngine

  • Amazon FBA Box Size Rules Become More Seller-Friendly by OmniTalk

  • 2025 Guide to Amazon Account Health Rating: Avoid Deactivation with Better Compliance by SellerEngine

⚡ Quick Clicks — Headlines Worth a Glance

🎭 Meme of the Week

Because Amazon selling is serious business… but not too serious.
Want more sourcing memes, weekly drops, and a few laughs between IP claims?

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