Amazon may launch a discount store! Rolling up like Temu?

Product vouchers, price vouchers, service vouchers... "Vouchers" can be said to be the "keyword of the year" in the cross-border e-commerce industry in recent years. Along with the rapid growth of emerging platforms known for their low prices, even the mighty Amazon has been inevitably drawn into the price whirlpool.

Rumor: Amazon to Launch Discount Store

AMZ123 has learned that according to industry sources, Amazon is secretly preparing for a new project called "Discount Store." This project operates on an invitation-only basis, focusing on private label low-priced fashion, home, and lifestyle products, with merchant recruitment almost comparable to Temu.

Currently, Amazon has not officially announced this news publicly, but according to sellers, Amazon recently invited some sellers in Shenzhen and held a closed-door merchant recruitment meeting for the "Discount Store."

Leaked meeting content from the industry shows that the Amazon Discount Store is a store specifically providing customers with private label low-priced fashion, home, and lifestyle products. Fulfillment and delivery will be handled by Amazon's warehouses in China, with products expected to be delivered directly to customers within 9-11 days.

Consistent with the leak, "private label low-priced," "fashion home and lifestyle products," and "fulfillment by Amazon" all overlap with Temu's fully managed business. However, unlike full management, under the Amazon Discount Store project, sellers have the right to select products, set prices, and participate in activities despite not having advertising rights.

Based on the summarized key recruitment content of the Amazon Discount Store project from the leaked meeting content in the industry, AMZ123 presents the following:

1. About Entrance

Amazon will set up the entrance to the discount store on the amazon.com homepage, with a browsing interface branching off from the homepage to a secondary page.

2. About Product Selection

Categories: Fashion, home, and lifestyle products.

Criteria: Private label low-priced, lightweight safe products. Priced under $20, weighing less than 1 pound, within the range of 1485 inches.

3. About Logistics

Products enter Amazon's warehouses in China and are directly sent to end customers in small packages, with a delivery time of 9-11 days.

Clothing SKUs can be mixed in boxes, while non-clothing products cannot.

4. About Rights and Responsibilities

Sellers: Right to select products, set prices, and participate in activities.

Platform: Logistics fulfillment, on-site and off-site advertising, commission collection.

5. Other Key Points

Refund policy: Products priced below $3 are non-refundable.

Performance assessment policy: Separate from the main store, conducted independently.

No piggybacking, no storage limits, no overage inventory fees.

According to a senior seller's disclosure, Amazon's low-price store has entered the implementation stage, adopting an invitation system, and is expected to release invitation links to sellers within 2-3 months.

This news quickly spread across the cross-border e-commerce community:

"Is this Amazon's low-price fully managed model?"

"Prices are about to fluctuate again, competing with Temu."

"Is this an upgraded version of full management? Pricing power + high traffic, there must be something to play with."

As of the time of writing, Amazon has not publicly released relevant information on this, and the specific details of the project are still to be followed up. From the reactions of the sellers, many of them are curious and looking forward to this new project by Amazon, and the industry is discussing the motives behind Amazon's launch of the low-price store.

Is the low-price store aiming to compete with Temu?

Temu, which emerged in 2022, quickly gained ground in overseas markets with its low-price spear. Its flagship full-service model has sparked a wave of extreme cost-effectiveness dominated by the four small dragons going global.

As the global e-commerce leader, Amazon has long held a dominant position in the overseas e-commerce landscape. However, facing fierce attacks from Chinese e-commerce platforms like Temu, especially in the global environment of consumer downgrading, its market share has inevitably been eroded.

Cost-effectiveness has always been the important development logic that Amazon relies on for survival. It has established a fair pricing policy to constrain merchants' pricing power, checking through price search algorithms whether the products sold on the platform are comparable to competitors' prices.

Faced with the aggressive burning of money and extreme low pricing by Temu, Amazon initially did not want to confront it head-on, having previously announced that Temu did not meet its pricing policy execution standards and therefore removed it from the pricing algorithm.

If the above news is true, the launch of the low-price store may be a means for Amazon to proactively confront Temu in the low-price field.

In fact, as early as February this year, Amazon took the lead in India to launch a special store called "Bazaar", focusing on selling unbranded, fashionable, and lifestyle products, with prices below 600 Indian Rupees (approximately 7.2 US dollars). Through this low-price store, Amazon aims to reach the middle and lower consumer groups pursuing cost-effectiveness and compete for market share with local e-commerce platforms.

Now, the rumored low-price store that will be launched in the United States has many similarities in terms of model and logic to Bazaar. Based on this, it can be inferred that Amazon's move to target the low-price market in the face of platforms like Temu has long been brewing.

The reason why Temu can establish an absolute low-price advantage is inseparable from the full-service escort, through this model of de-intermediation, Temu integrates high-quality domestic supply chains, quickly assembles factory-type and trade-type sellers with deep sources and independent production capabilities, and achieves extreme cost compression through a highly centralized management system Amazon's low-price mall is somewhat similar to Temu's full-service model, as both are operated by the platform in terms of logistics, traffic, and other operational processes, while sellers are responsible for product selection. However, the difference lies in the fact that under the Amazon low-price mall model, sellers have the autonomy to set prices and manage inventory.

For many sellers, the launch of Amazon's low-price mall is seen as a double-edged sword.

From the leaked information, it appears that this low-price mall adopts a white-label strategy, with lower-priced products, which may further intensify competition. Especially for FBA sellers on the main platform, they will face pressures such as inventory, advertising, warehousing, and logistics costs. Once the low-price mall opens up for mass entry, products on the main platform may face significant price competition, leading to erosion of traffic and market share.

However, some sellers believe that on one hand, the low-price store will mainly sell unbranded products, which presents a huge opportunity for white-label goods. On the other hand, the customer base of the low-price mall overlaps with Amazon's main customer base, making it a channel for testing products, reducing testing costs, and enabling quick cash out.

Overall, Amazon's launch of the low-price mall is not just about competing with Temu on low prices. While the main platform focuses on brand cultivation and building brand moats, this new traffic entry point of the low-price mall extends to white-label products, reaching a broader consumer base and providing more dimensions of choice in the context of consumer downgrading.

Author: Shuangmu, Mailin AMZ123, Source: AMZ123 Cross-border E-commerce, Original Title "Amazon to Launch Low-Price Store! Competing with Temu?"