Sellers reduce costs! Amazon will implement new policies next month

At the end of last year, Amazon announced a major news that it would significantly reduce the commission for clothing categories on the US site.

Before the adjustment was announced, Amazon's US sales commission for clothing products priced below $15 was 17%, which was reduced to 5% after the adjustment; clothing products priced between $15 and $20 were adjusted from 17% to 10%. The adjustment of the commission for low-priced clothing is not a big deal.

Just when people thought that this policy would only benefit the US site, Amazon Global Selling posted a statement this morning saying that not only the US site, but also Europe (UK, Germany, Netherlands, Belgium, France, Italy, Spain, Sweden, Poland), Japan, and Canada will significantly reduce the commission on low-priced clothing. How low will it be? It will be as low as 70% off.

According to Amazon, this move was made because the policy of lowering the commission rate for low-priced clothing products in the United States received a good response, so the platform decided to expand this measure to Europe, Japan and Canada, which will take effect from May 15, 2024 (local time).

After the new rates come into effect, the commissions for low-priced clothing on the above-mentioned sites will range from 5% to 10%, which is much lower than the current 10% to 17%. The UK site has the largest reduction, from 15.3% to 8.16%, while the Polish site has the smallest reduction, from 10% to 8%.

Amazon also mentioned that eligible low-priced Amazon Logistics products can also enjoy low Amazon Logistics rates.

As early as when the US site announced a reduction in commissions for low-priced clothing products, many people speculated that it was because the rise of emerging e-commerce platforms such as Temu had put pressure on Amazon.

Recently, there are also reports that Amazon has shifted its focus from Walmart to emerging platforms to a certain extent. Especially Temu, where some clothes are even priced at less than $1. In addition, the overlap rate of sellers on Amazon, Walmart, and Temu is also increasing. Some of the new sellers on Amazon and Walmart have already settled in or are about to settle in Temu.

Although it has been said that emerging platforms have brought a lot of pressure to Amazon, your big brother is still your big brother.

A recent report released by US research firm eMarketer mentioned that Amazon's e-commerce business in the United States had a GMV of US$444.76 billion last year, an increase of 11.7% year-on-year. This figure not only accounts for 39.6% of the total GMV of the US e-commerce market, but also exceeds the overall growth rate of 8.1% of the US e-commerce market by 3.6%. According to eMarketer statistics, this is the first time since 2019 that Amazon's growth rate has exceeded the entire industry.

As for the commission discount, the name of the new policy, “low-priced clothing commission”, indicates that it is a favorable policy for clothing sellers with a price below $20, but it also exacerbates internal competition to a certain extent. Some sellers were worried that other peers would choose to cut prices and compress profit margins to cater to this policy in order to seize market traffic. Therefore, while sellers are happy, they still need to be prepared to deal with various situations that may occur next.

Amazon

Low Price Clothing Commissions

New policies