This is a YouTube podcast titled "Cahoot: 2025 FBA Fees Announced, Temu's New US Plans" recorded in late 2024. The podcast features two hosts, Maneesh and Jer, discussing Amazon's announcement of no fee increases for 2025, the competitive pressures from Temu and Shein, and the implications for US-based sellers and consumers. The conversation focuses on Amazon's strategies to maintain market share and the evolving e-commerce landscape.
Welcome to the Kahoot podcast with Maneesh and Jer. An interesting topic this week. Amazon just announced that there's no fee increase and no planned new fees for 2025. And you know, sellers on the forums are happy, they're praising Amazon, thanking them for getting into the holiday spirit. But you have a different opinion about, about this 100%.
I mean maybe there are five sellers that are happy and 500 that are, you know, feeling supremely pinched. So Amazon has pretty much squeezed any juice there is to squeeze and so there is no room so plan no fee increase. You know is honestly, if you read between the lines in Amazon's release, they want to promote FBA new selection which is absolutely self serving because that's a direct competition to TEMU and trying to basically get better traction with Amazon hall because Amazon is getting smoked in many ways by the TEMU chains of the world and they've realized that there is really no room to squeeze the sellers any further.
What is this new selection program?
Well, Amazon is touting that they will provide additional incentives to sellers for adding certain new selection to their store. These are discounts for products that are everyday essentials that have high customer demand but they have lower selection on Amazon store or popular brands that are not available globally. So essentially in my opinion it is a self service, self service serving tactic from Amazon to compete with the temu because as the inflation as tariffs and duties kick in, you know, if for example the shampoo that you buy is going to cost you 35% more, you know you are going to consume less of the discretionary item. You're not going to buy four shampoos and you will gravitate towards your essentials. So this is essentially gearing up for 2025 so that they know that, that consumers which are highly pinched are going to gravitate towards essentials and these incentives are geared to improve the selection so that Amazon continues growing in the segment that is likely to see greater traction in 2025.
Temu just announced they've opened up the recruitment of US based sellers and that's TEMU is directly going after the Amazon US based seller right now is recruit them for their platform. And some people are saying maybe that's part of the reason why they're keeping their costs down for next year. So what do you think about that?
Well, Amazon is very proudly proclaiming that they are lowering the fees on lower priced items which is direct competition with TEMU and Shane. So it's not that they're lowering, they have lowered their cost of doing business at the expense of the sellers. They introduce many fees last year. Inbound placement fee, low inventory fee, aged inventory fees. I mean talk about it. There is really no room. Yes, if the seller can ship the items to four or five Amazon fulfillment centers, break down the pallets into four different shipments. Yes. All that expense is borne by the seller, not by Amazon, which obviously reduces Amazon's cost of transportation. So it's not that Amazon is lowering, Amazon is just improving its profit margins. I'm sorry to say that, but that's the fact.
So what about TEMU though? Do US based sellers even want Temu or is it perceived as a low cost, you know, cheap products site?
I wouldn't quite categorize it that way just yet. I mean, just like Amazon, when it started it was perceived, Nikes of the world would have never considered, you know, that they would be selling on what they termed at the time as a flea market on Amazon. So I would not jump to any such conclusions. It's not what the Amazon sellers want, it's what the US consumers want. If the US consumers are going to shop on sites like TEMU and Shein, yes, sellers are going to flock where the customers are, where the eyeballs are, where the sales are. So it's not about the sellers, it's about the consumers.
Thanks, Maneesh. Well listeners, we'd love to hear what you think about all this. So leave us some comments and until next time, keep learning and stay curious.
