What sellers should know about Amazon’s fee cuts as Shein and Temu expand

Amazon has announced one of its most significant pricing reforms in recent years by cutting seller fees across its European marketplaces – a move widely seen as a direct response to intensifying competition from low-cost platforms Shein and Temu. The decision, which takes effect in mid-December and continues with broader changes in early 2026, aims to make Amazon more attractive to budget-focused sellers and consumers across Europe.

Below is a detailed FAQ explainer outlining what the changes mean for sellers, buyers and the wider e-commerce market.

What changes did Amazon announce?

Amazon confirmed that referral fees for clothing and accessories priced up to €15 or £15 will fall from 7% to 5%. For items priced between €15–20 or £15–20, fees will drop from 15% to 10%. These reductions take effect on December 15, 2025.

Amazon will also reduce fulfilment-by-Amazon (FBA) fees in major European markets – Germany, France, Italy, Spain and the UK – with per-parcel charges falling by an average of €0.32 or £0.26. Additional fee cuts will take effect in February 2026 for categories such as home goods, pet items, groceries, vitamins and other everyday products.

Why is Amazon lowering fees now?

Amazon is facing growing competition from Shein and Temu, both of which have rapidly gained market share in Europe by offering extremely low-priced products. Their rise has attracted millions of budget-conscious consumers and forced Amazon to adjust its pricing model to remain competitive.

Lowering fees allows Amazon to help sellers reduce prices, matching the aggressive pricing strategies of its rivals.

Which categories benefit the most?

The biggest beneficiaries are sellers of low-priced clothing, accessories and home products – items that typically cost €20 or less. These categories overlap directly with the strongest segments of Shein and Temu.

From February 2026, reduced fees will also apply to:

• home goods under €20

• pet clothing and pet food

• groceries and pantry products

• vitamins and supplements

• eligible low-weight FBA items

These changes are expected to improve seller margins and make low-cost categories more competitive.

How will this affect sellers and small businesses?

For small and medium-sized businesses, lower fees mean:

• higher profit margins on low-priced items

• the ability to cut retail prices without losing revenue

• more incentive to remain on or join Amazon instead of rival platforms

• stronger competitiveness in price-sensitive categories

However, sellers of higher-priced goods may see limited benefits, as most reductions target budget categories under €20.

How does this position Amazon against Shein and Temu?

The fee cuts indicate that Amazon is preparing for a long-term pricing battle. Unlike Shein and Temu, which rely on factories in China and long shipping routes, Amazon combines lower fees with faster delivery, broader fulfilment networks and established customer trust.

By reducing costs for sellers, Amazon aims to:

• match or undercut rivals’ prices

• prevent seller migration to Shein or Temu

• protect its leadership in Europe’s competitive e-commerce market

What does this mean for consumers?

European shoppers can expect:

• more competitive product prices

• faster delivery compared with Temu and Shein

• a wider selection of budget items

• more frequent discounts and promotions

The gap between Amazon and ultra-cheap competitors may narrow significantly.

What is the broader impact on Europe’s e-commerce market?

Amazon’s decision may:

• spark a Europe-wide price war between major platforms

• increase pressure on Temu and Shein to adjust their pricing models

• push sellers to diversify across multiple marketplaces

• attract regulatory attention, especially toward fast-growing Chinese platforms

The European retail landscape may enter a new era of intensified competition.

Bottom line

Amazon’s fee cuts represent a strategic move to counter the rise of Shein and Temu. By reducing seller costs and improving affordability, Amazon is positioning itself for a more aggressive phase of competition in 2026. The changes are expected to reshape consumer pricing, seller behaviour and overall market dynamics across Europe.

News.Az