Amazon.com Inc., faced with increasing competition, has made a surprising move – lowering its prices. The e-commerce behemoth announced last week that it is decreasing its sales commission rates on low-cost apparel from 17% to as little as 5%, starting next year. These price reductions appear to be a direct response to competition from the Chinese fast-fashion retailer, Shein.
The rise of Shein, with its quickly manufactured styles offered at impressively low prices, has resonated with consumers, even causing them to overlook lengthier delivery times when compared to Amazon’s one to two-day delivery promise. The extent of Shein’s appeal appears to have induced this change in Amazon’s commission structure to remain competitive in the fast-fashion market.
A direct link to these commission alterations was not explicitly mentioned by Amazon in its announcement. However, the timing of this move, along with the competition posed by Shein, presents a persuasive connection.
Full details about the commission fee alteration can be found in the announcement by Amazon here.
More comprehensive coverage of this development is available on Bloomberg Law‘s website.