Amazon Has Just Quietly Announced a Big Change to Its Website

Amazon is making plans to introduce a new section on its website that will allow Chinese sellers in its marketplace to ship low-cost products directly from China to customers in the U.S. The change was announced at an invite-only conference for sellers in China and was first reported by The Information. 

The new section will feature unbranded products, most of which will be priced below $20. These low-cost products would be shipped directly from Amazon warehouses in China, with a goal of arriving to customers in around nine days. Currently, those sellers ship their products to Amazon’s distribution centers in the U.S., from which they are delivered to customers.  

Amazon announced the change in response to increased competition from online retailers like Shein and Temu, which have ties to China, and to take advantage of a trade rule that exempts shipments with a value below $800 from tariffs. Those companies target bargain shoppers with aggressive advertising, pitching discounts for customers who are willing to wait for their purchases. 

That’s a stark contrast from Amazon’s primary strategy of getting customers to sign up for its Prime membership, which promises free one- or two-day shipping. For most of the past decade, the company has been organized around eliminating friction for fast delivery and building out a massive distribution network in the U.S. Fast delivery has been at the core of getting people to shift from shopping in brick-and-mortar stores to buying the same products online. 

In addition, the majority of purchases on Amazon’s website aren’t actually sold by the online e-commerce giant. Instead, third-party retailers that sell through its marketplace make up more than half of sales. Recent reporting suggests that number is close to 70 percent. Those sellers pay a commission to Amazon for each sale, as well as for advertising and distribution. 

In a statement, an Amazon spokesperson told news outlets that the company is “always exploring new ways to work with our selling partners to delight our customers with more selection, lower prices, and greater convenience.” The company did not comment further on its plans, but CNBC reported on the presentation after reviewing slides that were used at the conference. 

For sellers, the primary benefit seems to be saving money on the cost of shipping products to the U.S. to be distributed through Amazon’s network. It will also allow them to save on production costs by making products on demand since they will ship individually when customers place an order. 

For Amazon, the change is meant to maintain its position, even as consumers look for new ways to save money. As prices for just about everything increase, many customers are willing to wait if it means saving a few dollars on an item they don’t need immediately. The change shows just how much pressure Amazon feels from the smaller challengers as it targets shoppers willing to wait longer for lower prices on fashion or other low-cost items.

It’s a tricky balance for Amazon, which has built its brand on fast delivery. The fact that the company is quietly rolling out such a major change shows just how much pressure it feels from Shein and Temu. Amazon is nothing if not a fierce competitor. 

Ultimately, that’s the lesson here: Amazon recognizes that its core brand promise has to shift as its customers change. That’s true even if it means trying something that–on its face–is the opposite of the strategy it has been all in on for a decade.