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Amazon just launched a new low-cost online store that ships unbranded goods directly from Chinese factories to US shoppers in 9 to 11 days, in a direct assault on Temu and Shein. For third-party Amazon FBA sellers, this is the worst piece of Amazon news in a decade. Chinese factories selling on the new store skip US import duties (thanks to the 800-dollar de minimis rule), skip the middleman, and undercut FBA prices by 5x to 40x on identical products.
In this episode of the My Wife Quit Her Job podcast, I break down exactly what Amazon announced, why the new store is going to leak into the main Amazon search results whether Amazon admits it or not, and the four-step defense strategy I am using in my own store at Bumblebee Linens to stay competitive.
Below is the full breakdown of Amazon’s new direct-from-China store, why the pricing gap is impossible to close under current FBA fees, the Temu and Shein numbers driving Amazon’s reaction, and the ecommerce playbook that still works when generic products go to zero.
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Table of Contents
Key takeaways
- Amazon opened a new online store shipping unbranded goods directly from China in 9 to 11 days, initially targeting clothing and household items under 20 dollars and one pound.
- Chinese sellers on the new store avoid US import duties under the 800-dollar de minimis rule, skip the middleman, and skip most Amazon FBA fees.
- Temu had 82.4 million active US shoppers in September 2023, up from 4.6 million a year earlier, and was the most-downloaded ecommerce app of 2023 with 120 million-plus downloads.
- Identical products already sell for 5x to 40x more on Amazon than on Temu (a 40-dollar Amazon floor mat is 1.06 dollars on Temu).
- Amazon’s own new 2024 fees (inbound placement fee of 21 cents to 6 dollars per unit, low-inventory surcharge) make the FBA pricing gap even wider.
- The four defenses that still work: sell premium and trust-heavy categories, offer personalization, own your website and email list, and build a real brand.
What Amazon just announced about its direct-from-China store
Amazon has opened a new online storefront that lets Chinese factories sell unbranded goods directly to US consumers, with shipping times of 9 to 11 days instead of the usual Prime 1 to 2 days. The rollout is phased. The first phase targets unbranded clothing and household items priced under 20 dollars and weighing under one pound.
Amazon is actively recruiting Chinese factories into the program right now, and the model is essentially identical to Temu: factory-direct, cheap, slow. The goal is to stop the massive market-share drain Amazon has been suffering to Temu and Shein over the last two years.
Why Amazon is copying the Temu and Shein model
Amazon is copying Temu and Shein because Americans have proved they will happily wait 9 to 11 days to save 5x to 40x on generic products. Amazon’s own apparel revenue is down roughly 30 percent year over year, and tens of millions of shoppers have shifted spend to the two Chinese platforms.
How big Temu and Shein got, in numbers
The scale that forced Amazon’s hand is startling. Below are the September 2023 monthly active shopper counts for the major US ecommerce platforms, per GWS Magnify.
| Platform | US monthly active shoppers (Sept 2023) | Note |
|---|---|---|
| Amazon | 142 million | Still #1 |
| Walmart | 85.5 million | Neck and neck with Temu |
| Temu | 82.4 million | Up from 4.6M a year earlier |
| eBay | 40 million | Half of Temu |
Temu was also the most-downloaded ecommerce app in the world in 2023 with more than 120 million downloads, per Statista, surpassing Amazon. Two years after launching in the US, Temu already has more than half of Amazon’s monthly shopper base.
How much cheaper Temu is on identical products
The price gap on identical products is enormous. On a foam floor mat, Amazon lists 40 dollars while Temu lists 1.06 dollars, a 40x difference. On a neck fan, Amazon lists 23 dollars while Temu lists 6.95 dollars, roughly 3x cheaper.
The products are literally the same items shipped from the same Chinese factories. The only difference is that the Amazon listings sit behind US import duties, FBA fees, and a US-based middleman.
Why Amazon FBA sellers cannot match direct-from-China pricing
US-based Amazon FBA sellers cannot match direct-from-China prices because the FBA fee stack, plus US import duties, plus the middleman markup, is structurally 30 to 60 percent of the retail price before the seller earns a dollar. A Chinese factory selling direct on the new Amazon store skips almost all of that.
The Amazon FBA fee stack in 2024
Here is what a US FBA seller pays on a typical product, on top of the cost of goods and shipping to the US.
| Fee | Rate |
|---|---|
| Referral fee | 15% of sale price |
| FBA fulfillment fee | 10 to 15% of sale price |
| Inbound placement fee (new 2024) | $0.21 to $6.00 per unit |
| Low-inventory surcharge (new 2024) | Variable per unit |
| US import duties and tariffs | Category-dependent, often 7 to 25% |
| Advertising to stay visible | 20 to 30% of sale price |
The inbound placement fee is new in 2024. Amazon now charges 21 cents to 6 dollars per unit just to accept standard and bulky items into a fulfillment center. The stated justification is to cover the cost of distributing your inventory across the network.
The low-inventory surcharge is the other new 2024 fee. In the past you only got penalized for holding too much inventory in FBA. Now you also get penalized for holding too little.
What Chinese sellers on the new store pay instead
A Chinese factory selling direct on the new Amazon store bypasses most of that stack. Packages under 800 dollars enter the US under the de minimis rule with no import duties or tariffs. There is no US middleman, no US warehouse, and no FBA fulfillment fee because Amazon ships directly from China.
The combined effect is a 30 to 60 percent structural pricing advantage. A US FBA seller cannot beat that gap on a generic product no matter how efficient the supply chain is.
Why the new store will bleed into regular Amazon search
Amazon has said the new low-cost store will live in its own section on the site. In practice, the cheaper direct-from-China listings will almost certainly show up alongside regular listings in normal Amazon search results, because Amazon has done exactly this before with its own private-label products.
Amazon makes money either way. Whether a shopper buys your FBA product or a 3x-cheaper direct-from-China alternative, Amazon takes its cut. The incentive to hide the cheap listings from mainstream search does not exist.
The likely search experience: a shopper types in your product, sees a Chinese direct-from-China listing at one-third the price sitting right next to your listing, and clicks the cheaper option. Brand loyalty on Amazon is close to zero for most categories, so the price gap wins.
How to fight back: the 4-step defense for ecommerce sellers in 2024
The four defenses that still work against direct-from-China competition are picking trust-heavy categories, offering personalization, owning your web presence and email list, and building a real brand on emotion instead of price. Below is how I am applying each of these in my own businesses.
Step 1: Move into categories a Chinese factory cannot easily replicate
The first move is to reposition your product portfolio into categories where trust, safety, or expertise matter more than price. A student in my course sells skincare, and skincare is a great example. Consumers are not going to buy a no-name skincare product from a Chinese factory at one-tenth the price because they have no idea what chemicals are in the formulation.
Other trust-heavy categories to consider include supplements, baby products, pet food, kitchen items that contact food, and anything with a safety certification. In each of these, buyers reliably pay a premium to reduce perceived risk.
Step 2: Add personalization Chinese sellers cannot match
The second move is to add customization that a bulk-shipping factory cannot deliver cost-effectively. At my store Bumblebee Linens, we have doubled down on personalization: custom embroidery, custom printing, custom monogramming on almost every product we sell.
Personalization is a real operational pain, and that is exactly why it is a moat. A Chinese seller shipping thousands of identical units per day cannot easily monogram a linen handkerchief for a wedding and get it to a US customer on a deadline.
Step 3: Own your website and email list
The third move is to stop building your business exclusively on Amazon and start building assets that you own. Your own website, your own email list, and your own SMS list are all channels where no platform can undercut you or change the rules overnight.
Amazon is a distribution channel, and it should be one channel among several. Every Amazon sale should be treated as an opportunity to capture a customer into an owned marketing channel that will still be there in five years.
Step 4: Build a real brand that sells on emotion, not price
The fourth move is to actually build a brand around your products, because a brand insulates you from price competition on commodity goods. The technical definition of a brand is just a name that identifies your goods, but a real brand triggers an emotion that makes price irrelevant.
Dr. Squatch is the textbook example. The company sells bar soap for 8 dollars while a comparable Chinese-made bar sells 50-for-79-cents on Temu, and Dr. Squatch is a nine-figure business because their commercials sell masculinity and sexual companionship rather than soap.
True Classic Tees is another one. A plain colored t-shirt from True Classic costs 30 dollars while 8 similar shirts on Temu are 13.49 dollars, and their commercials sell the promise of looking buff and hiding your gut. That emotional payoff is why they became a nine-figure company on a commodity product.
The through-line is simple. If you are competing on price on Amazon in 2024, you are competing directly with Chinese factories that ship for free under de minimis. If you are competing on brand, personalization, trust, or premium positioning, you have a business that can survive the shift.
What US Amazon FBA sellers should do in the next 90 days
The next 90 days matter, because the new Amazon direct-from-China store is going to accelerate the pricing pressure faster than most sellers expect. Below is the short-list of actions I would take right now if I were still primarily an Amazon FBA seller.
- Audit every SKU. Any generic, unbranded product under 20 dollars is at risk of being undercut. Plan an exit path or a premium upgrade.
- Move into premium, trust-heavy, or customizable product lines that direct-from-China sellers cannot easily replicate.
- Stand up an owned Shopify or WooCommerce site and start driving Amazon buyers to it with insert cards, warranty registration, and free content.
- Build an email and SMS list. These are the only marketing channels no platform can shut off.
- Start producing content (video, podcast, blog) that builds real brand recognition off Amazon.
- Diversify sales channels. Sell on Shopify, TikTok Shop, Faire, wholesale, and other platforms so no single platform can end your business.
Frequently asked questions
What is Amazon’s new direct-from-China store?
Amazon’s new direct-from-China store is a low-cost online storefront that lets Chinese factories sell unbranded products directly to US shoppers, with 9 to 11 day shipping. It is Amazon’s competitive response to Temu and Shein, and it initially focuses on clothing and household goods priced under 20 dollars and weighing under one pound.
What is the 800-dollar de minimis rule?
The de minimis rule is a US customs provision that allows packages valued at 800 dollars or less to enter the country without paying import duties or tariffs. It is the loophole that lets Temu, Shein, and Amazon’s new direct-from-China store deliver factory-direct products to US shoppers without the fees a US-based importer has to pay.
How much bigger is Temu than a year ago?
Temu grew from 4.6 million US monthly active shoppers in September 2022 to 82.4 million in September 2023, an 18x jump in one year (source: GWS Magnify). Temu was also the most-downloaded ecommerce app in the world in 2023 with more than 120 million downloads, per Statista, surpassing Amazon.
Can Amazon FBA sellers still compete in 2024?
Amazon FBA sellers can still compete in 2024, but not on generic sub-20-dollar products against direct-from-China listings. The winners will be sellers who move into premium categories, offer personalization, build a real brand, and diversify sales onto owned channels like their own website and email list.
Will the direct-from-China products show up in regular Amazon search?
Amazon has stated the new low-cost storefront will have its own section, but direct-from-China products almost certainly will appear alongside regular listings in normal Amazon search. Amazon has repeatedly promoted its own private-label products in mainstream search, and it collects fees on the cheaper Chinese listings either way.
What product categories are safest from direct-from-China competition?
Categories where trust, safety, expertise, personalization, or brand matter more than price are the safest. Skincare, supplements, baby and pet products, food-contact kitchen items, personalized gifts, custom apparel, and premium branded goods all resist commodity price pressure from direct-from-China sellers.
What is the best defense for a small ecommerce business right now?
The best defense is to build an owned direct-to-consumer store, capture every customer into an email and SMS list, and use marketplaces like Amazon as one distribution channel rather than the whole business. That way, when Amazon or any other platform changes the rules, your customer relationships and margins survive.
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