How Amazon Haul Impacts Ecommerce SMBs

Last month Amazon introduced Haul, a new low-cost marketplace to compete with China-based Temu and Shein.

Temu and Shein have gained traction in the U.S. by offering extremely affordable items shipped directly from China. Reuters reported in December 2023 that Temu had secured 17% of the U.S. market among discount retailers, including Dollar Tree, Dollar General, and Five Below.

Temu and Shein are currently the top two most downloaded shopping apps on the Apple App Store, according to Yahoo Finance in April 2024.

Amazon Haul

Amazon recognized the need for more budget-friendly options to compete with the growing Chinese market, particularly in the dollar store segment.

As of now, Haul is only available on the Amazon app, with separate listings from the general Amazon marketplace.

Haul offers items priced at $20 or less, with many under $10 and some as low as $1. Shipping is free for orders over $25 or $3.99 otherwise.

Seller Impact

Amazon sellers have been cautiously anticipating the impact of Haul for months.

Amazon’s Black Friday 2024 promotion, offering 50% off on all Haul items, resulted in high demand. Marketplace Pulse reported that many of the nearly 3,000 participating sellers sold out of key items during the promotion.

Katie Moro, global director of managed service at Productsup, highlighted the benefits of Haul for merchants selling low-cost items, making it easier for price-conscious consumers to find their products.

Customer acquisition

Some brands may use Haul as a way to attract new customers by offering discounted items. This strategy can help build customer loyalty and expand brand reach.

Private label rival

Private label sellers on Amazon sourcing products from China could face competition if Chinese manufacturers start selling directly on Haul.

Arbitrage competitor

Ecommerce drop-shippers relying on AliExpress-style arbitrage might face competition from Haul, as the platform makes direct-from-China retail more mainstream.

Cheap Ecommerce

While the impact of Haul remains to be seen, factors such as new tariffs could affect direct-from-China retailing. The trend towards affordable ecommerce items continues to grow.

FAQs

1. What is Amazon Haul?

Amazon Haul is a low-cost marketplace launched by Amazon to compete with Chinese platforms like Temu and Shein.

2. How do prices on Haul compare to other retailers?

Haul offers items priced at $20 or less, with many under $10 and some as low as $1, making it competitive in the budget-friendly market.

3. How can Haul benefit Amazon sellers?

Haul provides a platform for sellers of low-cost items to reach price-conscious consumers more easily, potentially increasing sales and visibility.

4. What impact could Haul have on private label brands?

If Chinese manufacturers start selling directly on Haul, private label sellers on Amazon sourcing products from China may face increased competition.

5. Will Haul affect ecommerce drop-shippers?

Ecommerce drop-shippers relying on AliExpress-style arbitrage could face competition from Haul, as the platform makes direct-from-China retail more mainstream.