Low prices is king! Amazon plans ultra-low pricing, HeadtoHead Battle Temu

Amazon is reportedly setting strict price caps for products sold on its upcoming low-cost storefront, according to a report from The Information. The price limits include $8 for jewelry, $13 for guitars, and $20 for sofas, based on messages Amazon sent to merchants. The report also noted that a list of 700 items was shared with sellers.

Amazon plans to ship orders directly to U.S. customers from a facility in Guangdong, China, and will offer sellers lower fulfillment fees for items sold through this new platform. An Amazon spokesperson said, We are always exploring new ways to work with our selling partners to delight customers with more selection, lower prices, and greater convenience.

If implemented, these price caps would mark a significant shift for Amazon, which traditionally hasn't enforced strict pricing limits on sellers.

With high inflation persisting, U.S. consumers have increasingly turned to low-cost goods, and e-commerce platforms like Temu, which focuses on bargain prices, have posed a strong challenge to Amazon. In response, Amazon has been exploring ways to cut costs, including researching direct air shipments from China to the U.S. since June.