Industry professionals were contacted for comment. Amazon’s Plans It is creating a new section where Chinese sellers can ship goods directly to customers in the U.S., a move in an apparent effort to win back consumers who have turned to Temu and Schein, which make cheap home goods and clothing, respectively.
China-based Shein sells cheap “fast fashion” apparel.
Bad idea
That’s a bad idea. Phil MasielloHe is the CEO of CrunchGrowth Revenue Acceleration Agency, a longtime Amazon seller, and founder of multiple e-commerce companies.
Merchants and brands have been battling Amazon for years over cheap counterfeit goods from China. “Brands that sell on Amazon are going to be furious,” Masiello said in a video interview, adding, “Amazon should raise prices. They should focus on exclusivity instead of trying to be the system.”
“Our Chinese competitors are selling junk to uneducated people. They buy only once. They’re not long-term customers of Tem,” Mr. Masiello said. Although Tem is popular, he said the business model is not sustainable.
“There is only one on Amazon “What every brand wants is customer retention,” Masiello added. “Everybody has the Amazon app on their phone. It’s the first place we look for anything.”
Masiello believes the move will be a loss for Amazon. Quality Seller They face increasing fees, with roughly 50% of sales going to Amazon.
Masiello isn’t the only one who thinks Amazon is making a mistake.
Calling for competition
“Amazon made a deal with the devil by importing this garbage from overseas,” he said. Rick Wilson“They’ve brought in a competitor,” said the CEO of e-commerce platform Miba.
Luxury items will not be sold in the new store, but “it ultimately depends on the product,” he said.
“Amazon continues to aggressively pursue overseas manufacturers, making it easier for them to become consumer brands.” James Thomson“In many areas, American brands that sell on Amazon are sourcing goods from overseas and now competing with manufacturers. Amazon is enabling that,” said Equity Value Advisors managing partner and former Amazon executive.
“As Amazon pursues lower-cost options, it becomes harder for small U.S. brands to succeed,” Thompson said.
Still, Thompson doesn’t see much of a problem in selling higher-priced items better.
“Many of the products sold on Temu and Schein are impulse buys,” Thompson says. “You don’t go to these sites thinking about what you need to restock your home.”
Thrasio, an e-commerce aggregator that recently emerged from bankruptcy, is focusing on quality and loyalty to avoid competing with products from Temu and Schein.
Everyday items such as kitchen utensils will become cheaper for consumers if sourced directly from China.
By focusing on quality, Trasio hopes to avoid competition from cheaper alternatives.
“There’s no way to compete in some of these commodity products,” said Stephanie Fox, Trasio’s new CEO. In an interview“Your profit margins are 5 percent and can never support a business of any size. Can a solopreneur compete with these products? Sure, but they’re not going to make a ton of money doing it.”
“It just wouldn’t be worth competing in low-margin everyday items, which is exactly what Amazon is focused on,” Fox said.
Mark DaoustThe founder of e-commerce intermediary Quiet Light compared the move to the launch of Amazon Basics.
“I’ve seen businesses crushed by Amazon Basics,” Daoust said, citing a client that sold low-cost office chairs. “Most sellers want to build a brand and a quality product and focus on being unique and inimitable. My client was making an economical chair that lots of people could buy. That was the whole value proposition.”
It wasn’t necessarily the best chair on the market, but it was economical and worked very well. That is, until it stopped working. “Amazon Basics destroyed the company.”
