Amazon is lowering the fees it charges to sellers in the European market to compete with e-commerce platforms like Shein and Temu, which sell clothing, home goods, and tools at extremely low prices.
In a statement released on Tuesday (December 2nd), Amazon said this is one of the largest fee reductions in the company’s history, focusing initially on reducing fees for businesses selling affordable fashion products.
Starting from the 15th of this month, Amazon will decrease the referral fee for clothing and accessories from 7% to 5%, applicable to items priced below 15 euros (17.41 US dollars) or 15 pounds (19.79 US dollars), while reducing the referral fee from 15% to 10% for items priced between 15 to 20 euros or pounds.
According to Shein’s official website, it charges sellers on its EU website a 10% referral fee and a 12.24% referral fee on its UK website, with new sellers not having to pay referral fees for the first 30 days.
Shein sells tops for as low as 3 euros and jeans for as low as 8.20 euros, thereby capturing market share from fast-fashion retailers in Europe, selling a variety of products from duvet covers to vacuum cleaners, posing a challenge to Amazon.
“We are continuously improving operations through innovation, reducing service costs, and passing on the cost savings to our sales partners,” Amazon stated.
Amazon also announced that starting from February 1st, the referral fee for home goods (priced below 20 euros or pounds) will be lowered from 15% to 8%, and the referral fees for pet clothing, groceries, and vitamins will also be reduced. Additionally, from December 15th, the company will average a 0.32 euros or 0.26 pounds reduction in parcel delivery fees in Germany, France, Italy, Spain, and the UK.
Amazon currently dominates the e-commerce platforms in European countries like Germany and France. The industry association Ecommerce Europe predicts that Amazon’s revenue in this market will grow by 7% this year, reaching 900 billion euros.
(This article is based on a report from Reuters)