Beauty brands grew traffic 16.9% on Amazon in 2025, but unit margins fell 14.7 percentage points. Fill rates hit 91%, yet out-of-stock losses more than doubled. The culprit? Ad spend peaked in November, CPC jumped 37%, and ROAS dropped 15%. Growth came at a steep profitability cost.
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Key takeaways
Near-perfect fill rates couldn't prevent OOS leakage: PO Fill Rate reached 91% by December, yet OOS dollar loss surged 127.7%, proving execution alone doesn't solve demand planning failures.
Pricing power showed up, but margins didn't follow: ASP increased 11.2% with minimal discounting, but unit margin fell 14.7pp as operational
Holiday traffic came with a profitability tax: Glance views jumped 16.9% YoY, but conversion stayed flat while CPC rose 37% and ROAS dropped 15%, making Q4 growth expensive.
Inventory builds protected availability but not mix: Average inventory rose 21.8%, peaking in November to support holiday demand, yet OOS losses doubled, signaling planning misalignment.
November revealed the true cost of seasonal demand: Gross unit margin hit its yearly low of 7.8% in November as logistical overhead and promotional pressure converged during the gift-giving rush.
Beauty became pay-to-play in 2025: Ad spend peaked in November as brands fought for shelf space during gift-giving season, compressing margins to single digits and proving media efficiency was the year's biggest casualty.
