Hi fellow sellers,
I’ve been wondering for a while about why Amazon has been introducing many new fees lately: low inventory fee, inbound placement fee, etc. On the surface, it looks like Amazon wants to make more profit from new fees. However the increasing fees will only be passed on to buyers in the form of increasing prices. Higher prices will make Amazon less competitive against other marketplaces and online sites in the long run. I couldn’t figure out why would Amazon sacrifice long term e-commerce dominance for short term extra profits… until I learned from another famous Amazon seller/YouTuber yesterday.
He explained that Amazon is losing its market share to Temu and Shien. Many items on Amazon are offered on Temu for less than half the price. One extreme listing that he showed was a door mat that is selling on Amazon for $39.99 and only $3.99 on Temu. Yes, exact same mat for 10% of the Amazon price. The economy is getting worse and people are losing jobs. Many of them are willing to wait 10-14 days to buy at 90% discount. To fight back, Amazon is opening a new platform that will ship directly from China. The roll out will occur in stages starting with unbranded clothing and small household items priced under $20 and weight under 1 pound. Amazon is rounding up Chinese factories to sign up with this program. It’s estimated that at least 50% of items on amazon.com will be on this new ship direct from China platform. Basically Amazon is adapting from the FBA and FBM (except ship direct from China) business model to Temu’s business model. That’s why Amazon is trying to squeeze every last dollar out of sellers without worrying about long term damage.
Ok, I don’t want to make this post too long. I would post the source YouTube video URL if I’m allowed. What do you guys think? Is the end (for non-Chinese sellers like us) near and what to do to survive? Please share your thoughts. Thanks.