What sellers need to know about Amazon’s fee cuts amid rising competition
Amazon is taking one of its most aggressive steps yet to protect its position in the European ecommerce market, announcing sweeping fee reductions for sellers as ultra-cheap platforms Shein and Temu continue to gain ground.
The company confirmed the changes on Tuesday, describing them as among the largest fee cuts it has ever implemented in the region, News.Az reports, citing Reuters.
Beginning December 15, referral fees for budget fashion items — the core battleground of Shein and Temu — will decrease sharply. Sellers will now pay only 5% instead of 7% for clothing and accessories priced up to €15 or £15, and 10% instead of 15% for items in the €15–20 or £15–20 range. Fulfillment fees in Germany, France, Italy, Spain and the U.K. will also fall by an average of €0.32 or £0.26 per parcel.
Amazon said the reductions are made possible by efficiency improvements within its logistics network and that the company is “passing these savings directly to sellers.” More fee cuts are coming on February 1, targeting home goods, pet clothing, groceries, and vitamins — categories that Shein and Temu have aggressively expanded into in recent months.
The timing is significant. Europe’s ecommerce market is expected to reach €900 billion in revenue this year, and competition for budget-conscious consumers is fiercer than ever. With inflation and higher living costs reshaping buying habits, Shein and Temu have surged by offering prices that traditional marketplaces struggle to match. Shein, for example, routinely sells tops for as little as €3 and jeans for around €8, setting a new standard for low-cost fast fashion.
These platforms have rapidly expanded across Europe: Shein has reached more than 266 million annual active users globally, while Temu — owned by China’s PDD Holdings — became the most downloaded shopping app in Europe in 2024 and more than doubled its EU profits to nearly $120 million, despite employing just eight staff members in the bloc, according to The Guardian. Their low overheads and direct-from-supplier model have allowed them to undercut Amazon on price by enormous margins.
The pressure on Amazon is clear. Germany and France — Amazon’s largest European markets — have seen the fastest growth in Temu’s and Shein’s user bases. According to industry trackers, more than 25% of Germans under 35 have made at least one purchase from Shein or Temu this year, a trend that Amazon cannot ignore.
In response, Amazon has adjusted its global strategy. Last month, the company expanded Amazon Bazaar — its ultra-low-cost marketplace featuring $2–$10 items — into a broader set of international markets. The move was widely interpreted as Amazon’s direct attempt to reclaim price-sensitive customers increasingly drifting toward Asian platforms.
Industry analysts say Amazon’s fee cuts have a dual purpose: helping sellers stay competitive while signaling to consumers that the platform is ready to compete on price, not just convenience. Lower commissions typically translate into lower retail prices, allowing Amazon sellers to narrow the pricing gap with Shein and Temu.
But the reductions also highlight a deeper shift within Amazon itself. The company is now optimizing its supply chain, reducing warehousing costs, and automating key logistics processes — all part of a larger effort to maintain profitability while competing with platforms that rely on deeply subsidized shipping from China and ultra-low operating expenses.
Still, the battle is far from settled. Shein and Temu benefit from a global manufacturing ecosystem that enables them to produce at extremely low cost. Temu’s marketing spending — estimated in the billions — continues to overwhelm competitors on social media, while Shein’s data-driven fast-fashion cycle has shortened design-to-production times to as little as 7–10 days, compared with traditional retailers' 3–6 months.
For European sellers, Amazon’s fee cuts may bring much-needed relief after years of rising operational costs. For consumers, they could lead to lower prices. And for the industry at large, they mark the beginning of a new phase in the ecommerce price war — one that Amazon, for the first time in a decade, is no longer guaranteed to win.
With Europe’s ecommerce landscape undergoing rapid transformation and €900 billion in annual revenue at stake, Amazon’s latest move shows that even the world’s largest marketplace is being forced to adapt, evolve, and compete on terms set by its fast-growing Chinese rivals.
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