Recently, Amazon has been working on launching a new discount marketplace with very cheap products that are directly shipped from China to compete with brands like Temu and Shein, which are two popular Chinese stores selling inexpensive goods. According to a report by The Information, the e-commerce giant was recently seen sharing information with its merchants about the maximum price limits it will set for selected products.
The list included 700 items. Some of the maximum price limits include $8 for jewelry, $9 for mattresses, $13 for guitars, and $20 for sofas. Amazon does not implement a price ceiling system in its main marketplace, so this is a completely new approach that it will test in the new store. The products will be shipped from the fulfillment center in Guangdong, China.
Shipping timelines are expected to be around nine to 11 days, and sellers will be charged fees ranging from $1.77 to $2.05 to ship an item weighing 4 to 8 ounces from the center. This information compares these numbers to the fees of $2.67 to $4.16 that sellers pay for shipping items of the same weight from fulfillment centers locally by Amazon.
One of the biggest issues with such Chinese stores, apart from incredibly low-quality offerings, is the exploitative labor model they are built on. A report highlighted by a committee stated that Temu sends millions of shipments to the U.S. every year containing products made by Uighur Muslims under forced labor. It added that Temu does nothing to ensure compliance with the Uyghur Forced Labor Prevention Act (UFLPA) or any other policies regarding exploitative labor.
As stated in the report, “(…) all companies operating in the U.S. are required to clean up their supply chain and ensure they are not contributing to (…) the genocide of the Uighur people by facilitating the sale of goods made with forced labor.” But given the exploitative labor model that Amazon operates on and how outrageously it is abused in workplace policies, it is unlikely to take a different, more ethical approach with its budget store.
What can you expect from a $20 sofa? Poor aesthetics and flimsy construction. While they are often stuffed with toxic levels of lead as an unethical shortcut to enhance colors, add some weight, and make them resistant to corrosion. This makes the thought of a $13 guitar even more concerning than it seems.
Temu and Shein have not made Amazon feel insecure due to their tremendous success. Last year, TikTok responded to the competition by launching an in-app shopping feature exclusively for the United States to sell cheap Chinese products.
