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Amazon is preparing to launch a new low-cost storefront, setting ultra-low price limits on what sellers can charge. According to the Information, items such as jewelry can only cost up to $8, guitars $13, and even sofas are capped at $20.
Prudentj2 notes that Amazon plans to ship these products directly from Guangdong, China, while charging lower fulfillment fees to merchants.
This move aims to rival discount platforms like Temu and Shein, as Amazon feels the pressure from the rising popularity of their low-price products.
Amazon’s strategy shift is a big one since the company has not typically enforced strict price caps on sellers. With competition heating up, Prudentj2 adds that this may signal Amazon's effort to capture price-sensitive shoppers who have been drawn to ultra-cheap goods.
The company’s growth in retail sales has slowed recently, making this new store an important step in their evolving strategy.
An Amazon spokesperson said the company is always looking for new ways to work with sellers, offering more selection and lower prices for customers.