Ecommerce giant, Amazon, has revealed plans to introduce a discount store on its platform with the aim of selling affordable fashion and lifestyle products while allowing Chinese sellers to ship directly to U.S. customers.
Amazon’s Discount Store
This initiative by the tech company mirrors strategies employed by other e-commerce platforms, particularly in response to rising competitors like Temu and SHEIN.
Despite its stature and the kind of revenue it posts quarter by quarter, the company is facing stiff competition from such emerging players who are doing good riding on offering a vast array of low-cost products.
In an exclusive meeting with the Chinese sellers, Amazon highlighted that the new discount store will feature unbranded items across various categories which would primarily be priced under $20. Under this new model, these sellers shall no longer have to rely on the Amazon’s Fulfillment by Amazon (FBA) service and be able to ship directly from China with a delivery window of 9-11 days.
On the lines of to SHEIN’s on-demand manufacturing model, the direct shipping approach allows the cost reduction and the small batch production facilitation which would in turn help manufacturers to test the products without having to necessarily commit to a large scale production.
Though there is no official launch date as we speak, but it’s anticipated that vendors will start submitting products by late 2024.
Rising Concerns Among U.S. Vendors Over Amazon’s Discount Store Strategy
On the flipside, there are apprehensions amongst the US vendors especially those who are small businesses. With the direct shipping and cost reduction and eventual influx of low priced Chinese products, competition could increase which could further complicate the profitability of local sellers.
Also since China is a significant source of counterfeit items, there are fears of counterfeit goods entering the discount store market. As per experts, the chances of overseas sellers selling fraudulent products could increase and eventually erode the consumer confidence in Amazon’s reputation.
How things roll for the Amazon Discount Store is yet to be seen, until then…
