Amazon’s low-price mall is about to go online? Is it ready to conquer the market with low prices?

Amazon’s recent internal testing of the low-price mall project is like a bomb in the e-commerce industry that is about to explode, attracting widespread attention and heated discussions inside and outside the industry. The project directly targets the rapidly rising e-commerce platform Temu, focusing on the strategy of low-price unbranded goods, and accurately targeting the huge consumer groups that are extremely sensitive to prices. So, what far-reaching impact will this highly anticipated Amazon low-price mall have on the fiercely competitive e-commerce market?

‌Low-price mall is showing its edge: Amazon officially blows the horn of attacking the low-price market‌

As early as June this year, Amazon quietly released a signal that it would launch a low-price mall project. Now, the project has entered an intense internal testing phase and has begun to open up to some carefully selected invited sellers. The low-price mall focuses on white-label products, that is, those products without brand labels or with low awareness of their own brands. These products will be efficiently shipped directly from Chinese warehouses to the US market. This strategic deployment is undoubtedly Amazon’s powerful response to the rapid development of emerging low-price e-commerce platforms such as Temu and Wish. It is worth noting that the low-price mall is not directly launched on the Amazon main site, but has set up an independent entrance that can only be accessed in the Amazon App, and has set strict standards and requirements for the price, weight, logistics and other aspects of the goods.

‌Product and price rules: small commodities contain big business opportunities‌

Amazon has strictly controlled the prices of goods in the low-price mall and set a price cap of $20 to ensure that all goods can be sold at very competitive prices. Specifically, the maximum price of shorts shall not exceed $14, necklaces shall be $10, and relatively high-value goods such as digital cameras shall be strictly controlled within $20. This carefully designed pricing strategy is aimed at directly challenging those e-commerce platforms known for their low prices, allowing consumers to buy high-quality goods at a lower price on the Amazon platform.

In addition, the low-price mall has also strictly screened the types of goods to be settled, focusing mainly on popular categories such as fashion goods, household goods, and daily necessities, and the weight of the goods must be controlled below 1 pound. At the same time, in order to ensure that the goods meet the strict requirements of cross-border sales, goods such as baby products, children’s products and batteries that require special compliance documents will be excluded. These measures will not only help improve the overall product quality of the low-price mall, but also provide consumers in the US market with a better, safer and low-price shopping option.

‌Logistics and warehousing: unified and efficient, reducing costs‌

The logistics and warehousing system of Amazon’s low-price mall has achieved a high degree of unity and efficiency. All settled goods are uniformly managed by the operation center in Guangdong, China, and sellers are strictly prohibited from delivering them by themselves. Through efficient air transportation, goods can be quickly delivered to American consumers within 9-11 days. More importantly, due to the low price of goods, many goods meet the requirements of small tax exemption, which greatly reduces the cost of tariffs and further consolidates the price advantage.

In terms of delivery and warehousing fees, Amazon has also formulated detailed and reasonable charging standards. For example, for goods not exceeding 4 ounces and priced below $3, the delivery fee is only $0.50; for goods above 4 ounces, the starting price of clothing is $2.05. As for storage fees, they are charged at a rate of $0.40 per cubic foot per month. This reasonable logistics cost structure undoubtedly provides strong support for the smooth operation of the low-price mall.

‌Refunds and returns: flexible policies to improve experience‌

In terms of after-sales service, Amazon’s low-price mall has adopted a flexible “refund without return” policy. For goods priced below $3, consumers have no right to request a return; for goods priced above $3, they are defaulted to a refund without return service. Amazon will determine whether the goods meet the policy based on the specific circumstances, and may clear, donate or dispose of goods that do not meet the requirements. This policy not only helps to reduce the after-sales cost of low-priced goods, but also improves consumers’ shopping experience to a certain extent.

‌Market Outlook and Potential Impact of Low-Price Malls: Opportunities and Challenges Coexist‌

Amazon’s launch of the low-price mall is timely, especially against the backdrop of the rapid rise of platforms such as Temu and profound changes in consumer shopping habits. With the continued intensification of inflation and the increasingly obvious trend of consumption downgrade, more and more consumers are beginning to pay more attention to the cost-effectiveness of goods rather than just pursuing brand effects. Therefore, the launch of Amazon’s low-price mall is undoubtedly to meet the urgent needs of this part of consumers.

According to some sellers who participated in the internal test, more than 100 sellers have settled in the low-price mall and are actively preparing for the upcoming traffic bonus period. Although the project is still in the optimization stage, sellers are generally optimistic about its prospects. They believe that the launch of the low-price mall will bring them unprecedented traffic and exposure opportunities, thereby helping to significantly improve sales performance.

However, some sellers are concerned about the launch of the low-price mall. They are worried that this new project will have an impact on the traffic of Amazon’s main site, especially for those sellers who rely on FBA services, who may face the pressure of traffic diversion. In addition, the launch of the low-price mall may also trigger a series of market shocks and changes in the competitive landscape, all of which require sellers to be fully prepared and respond.