Amazon cuts seller fees in Europe in Shein, Temu price war

Amazon is cutting the fees it charges sellers in Europe as it responds to competition from marketplaces like Shein and Temu that sell clothes, homeware and gadgets at rock-bottom prices.

The move, which Amazon said in a statement on Tuesday was one of its largest ever fee reductions, is focused first on lowering fees for sellers of cheap fashion.

It cuts the referral fees Amazon charges on clothes and accessories to 5% from 7% for items up to 15 euros ($17.41) or 15 pounds ($19.79), and to 10% from 15% for items between 15 and 20 euros or pounds, effective from December 15.

Shein charges sellers a referral fee of 10% for its European Union sites and 12.24% for Britain, according to its website, with zero referral fees for new sellers for the first 30 days.

“As we continue to lower our cost to serve through operational improvements and innovation, we are passing on greater savings to our selling partners,” Amazon said.

Shein, which sells tops for 3 euros and jeans for as little as 8.20 euros, has taken market share from European fast-fashion retailers and challenged Amazon with its marketplace selling everything from duvet covers to vacuum cleaners.

Amazon is the dominant ecommerce platform in Germany, France, and other European countries, in a market where revenue is expected to grow 7% to hit 900 billion euros this year, industry association Ecommerce Europe forecast.

Additionally, Amazon said that it would cut referral fees from February 1 for home products to 8% from 15% for items up to 20 euros or pounds, as well as cutting fees on pet clothing, grocery and vitamins.

It will also reduce fulfilment fees for parcels by an average of 0.32 euros or 0.26 pounds in its Germany, France, Italy, Spain, and British stores from December 15.