At a closed-door event in China in late June, Amazon announced their plans to launch a budget storefront for Amazon US, featuring low-cost fashion, home, lifestyle items and more…
We’ve talked before about the threat posed to Amazon by the rise of Temu and Shein, and this move is the marketplace’s boldest bid yet in the fight to maintain competitive edge.
What will the Discount Storefront sell?
Creating a smooth path for Chinese Sellers to ship directly to US consumers, Amazon’s new storefront is set to feature a variety of unbranded items, mostly priced under $20, attracting bargain shoppers into the marketplace and expanding and solidifying Amazon’s reach.
Items previewed in the presentation in China included gua sha facial massaging tools, arm weights and phone cases.
The Offer – Streamlined Shipping and Cost Savings
The new model will allow products to be shipped directly from China to US consumers within nine to eleven days, and it will bypass the traditional Fulfilment by Amazon (FBA) process where goods are first sent to US warehouses to speed things up.
This direct shipping approach aims to cut costs for Chinese sellers and enables them to test new items through small-batch production, a method similar to Shein’s on-demand manufacturing.
The Impact? Sellers share their apprehensions…
Amazon’s plan to introduce this discount storefront is causing significant concern among American Sellers, who fear it will further erode their market share and profit margins for small goods – especially after a year or more of squeezes.
Let’s say it comes to Amazon UK. How can Sellers stay competitive?
We’ve said this before about Shein and Temu – their issue is the quality of their products.
Buyers expect to “get what they pay for” and, with no FBA involvement, there are also potential product safety and counterfeit issues – not to mention a significant potential environmental impact that climate conscious shoppers are sure to find off putting.
There are a number of strategy shifts that will help Sellers stay ahead of the influx of low-cost goods – including:
1. Focusing on Branding and Quality
Consistent branding and emphasising the quality and reliability of your products through detailed product descriptions, high-quality images and customer reviews builds customer loyalty and trust.
Differentiate your products by highlighting their superior quality, durability and safety, and offer detailed information about product materials, manufacturing processes and quality control standards.
2. Exploit Niche Opportunities
Use market research to uncover underserved segments and niche markets that may not be as easily replicated by discount sellers – specialised products often attract dedicated customer bases willing to pay a premium.
3. Customise and Personalise
Offer customisation options or personalised products to attract customers looking for unique items, and combine it with excellent customer service to build a loyal customer base that values the buying experience from your brand.
4. Offer Superior Customer Service
Provide exceptional customer service, including prompt responses to inquiries, hassle-free returns and proactive communication.
5. Keep your Listings Engaging
Optimise everything regularly, enhance every element of your listings – including A+ content – and use the tenets of content marketing to engage your audience – share stories, tutorials and user-generated content to build a community on Amazon.
6. Invest in Advertising
With everything optimised, deploy a robust Amazon Ads strategy to increase your visibility, drive traffic to your listings and boost your sales and growth.
Our award-winning experts are on hand to help you create a strategy with all the commercial rigour, vigour and vision you need! Get in touch today.