‘Say hello to crazy low prices’ is the tag line for Amazon’s new low cost store in the US, named Amazon Haul. The proposition is really simple:
- Cut out the white label middle man and list everything as what it is – Generic, i.e. low cost low asp product from China
- Cap prices at $20 for everything, but dictate to Chinese suppliers the maximum price for each type of product to keep prices even lower
- Consolidate orders in China and ship direct to the consumer in the US
- Free delivery for orders over $25
- Offer discounts – 5% off orders $50 and over, and 10% off orders $75 or more
- Free returns… but only for purchases over $3.00 within 15 days of delivery
So the big question is why? Well… Temu and SHEIN have been eating into what Amazon consider to be their playground and Amazon want a chunk of the business back. This is the low-ASP low-Quality goods sector of mass produced product in China, and Amazon have been watching Temu hoover up sales by cutting prices and offering slow delivery.
Slow delivery goes against everything Amazon have built over the past few decades, where they’ve pretty much single handedly trained us to expect everything to arrive tomorrow, if not today. But the economy is hurting consumers and they’ve voted with their wallets to shop on Temu and sacrifice speed for low cost so Amazon have having to follow.
There’s a tax advantage to be gained from de minimis imports, but that’s going to disappear as governments regulate and reduce limits to zero. But the big saving is the margin from the raft of sellers who pick a cheap product and import from China, stick a sticker on to claim it’s now a branded product and resell on Amazon. We’ve known for years that these are generic products and that the seller add nothing bar local stock availability that can be delivered fast and Amazon has noticed as well. So, they’re cutting the seller out of the loop, sticking to a ‘Generic’ brand label and offering the products at knock down prices.
Where Amazon are trying to differentiate themselves is by backing the low-ASP low-quality products with their A-to-z Guarantee. Amazon say that they screen the products sellers offer in Haul so customers can be confident they’ll receive products that are safe, authentic, and compliant with applicable regulations. Plus, the A-to-z Guarantee protects customers including if the item is damaged, defective, or not as described.
Finding great products at very low prices is important to customers, and we continue to explore ways that we can work with our selling partners so they can offer products at ultra-low prices. Amazon Haul aims to help make shopping for fashion, home, lifestyle, electronics, and other products even more fun, easy, and affordable, all backed by Amazon’s A-to-z product guarantee so customers can shop with confidence that the products they’re purchasing are safe, authentic, and in the condition expected. It’s early days for this experience, and we’ll continue to listen to customers as we refine and expand it in the weeks and months to come.
– Dharmesh Mehta, vice president of Worldwide Selling Partner Services, Amazon
Customers in the US can find Amazon Haul in the Amazon Shopping app by searching “Haul” in the search bar, navigating to Amazon Haul from the main menu icon, or by going to www.amazon.com/haul on their mobile
