The eCommerce landscape is changing faster than ever. Between aggressive ultra-low-price competitors like Shein and Temu, and major platforms such as Amazon EU adjusting fees to stay competitive during peak seasons, sellers are facing an environment where margins are being squeezed from all sides.
For online merchants, this new reality requires smarter pricing strategies, clearer channel economics, and diversified marketplace presence. In this in-depth guide, we break down the shifts that are reshaping seller profitability and outline practical actions sellers should take now.
The New Era of Price Competition
Over the past two years, ultra-low-cost platforms such as Shein and Temu have not only entered Western markets — they’ve disrupted them. Their pricing strategies, subsidized logistics, and massive product selection have raised consumer expectations for rock-bottom prices.
According to Statista, Temu became one of the fastest-growing shopping apps globally in 2023 and 2024, driven largely by price-driven consumers. Meanwhile, Forbes reports that Shein’s pricing model continues to place downward pressure on apparel and household goods categories across multiple marketplaces.
What This Means for Sellers
• Competing solely on price is no longer sustainable for most merchants
• Consumers expect lower prices, faster shipping, and frequent promotions
• Brands must protect margins without falling into the race-to-the-bottom trap
• Differentiation (brand, quality, convenience) matters more than ever
Amazon EU & Other Marketplaces Adjust Fees for Holiday Competitiveness
In response to the pricing pressure created by Shein, Temu, and similar players, major marketplaces — especially in Europe — have begun restructuring seller fees.
For example, Amazon EU recently implemented adjustments to FBA and referral fees to remain competitive during peak shipping and holiday seasons. These updates often include:
• Temporary fee reductions
• Category-based adjustments
• Seasonal fee structures
• New incentives tied to fast shipping or local inventory
You can track Amazon’s fee updates directly via the official Amazon Seller Central EU Fee Update Page (country-specific).
Why Platforms Are Making These Adjustments
• To keep product prices competitive against low-cost marketplaces
• To encourage faster delivery speeds that match rising customer expectations
• To improve conversion rates during peak periods
• To retain sellers who feel increasingly pinched by platform costs
Marketplace Fee Increases + Low-Price Rivals = Margin Compression
As a seller, you’re now facing a double squeeze:
1. Marketplace fees rising (FBA, storage, referral fees, return processing, etc.)
2. Competitors pricing aggressively low (sometimes below cost)
This combination makes it essential to re-model your economics by channel — because a product that was profitable on Amazon in 2022 may no longer be profitable in 2024–2025.
Action #1: Re-Model Your Margins By Channel
To protect your business, you need clarity on true profitability per marketplace, per SKU.
Include in your margin model:
• Product cost (COGS)
• Inbound & outbound logistics
• FBA/FBM fees
• Referral fees
• Warehousing & storage fees
• Returns & refunds
• Advertising (PPC, Meta, Google)
• Platform surcharges (holiday, peak, fuel, inventory surcharges)
Tools like Shopify’s Profit Margin Calculator or HubSpot’s pricing tools can help estimate profitability across channels.
Why This Matters
Many sellers discover that:
• Some SKUs are only profitable on 1 or 2 marketplaces
• Amazon FBA fees vary so widely by size/weight that certain products shouldn’t stay in FBA
• A product may perform better on Walmart, eBay, or niche marketplaces
Re-modeling margins gives you the power to make data-backed decisions instead of reacting to price pressure blindly.
Action #2: Test Temporary Promo Strategies (Without Killing Your Margins)
Promotions are powerful — but dangerous if misused.
Instead of slashing prices across your catalog, adopt priority-based promotional tactics.
Smart Promotion Strategies
1. Use short, high-impact promotions during peak periods
2. Run category-limited or SKU-limited discounts
3. Implement buy-more-save-more tiers
4. Offer free shipping thresholds instead of major price cuts
5. Use coupon-based promos that don’t affect your displayed price
Why Limited-Time Promos Work
According to CXL’s consumer psychology research, urgency and perceived savings increase conversion rates — even if the discount is small.
Be Cautious With:
• Lowering prices to match Shein/Temu levels
• Running blanket discounts across your catalog
• Over-discounting repeatedly (trains customers to wait for sales)
The key is to stay competitive temporarily without sacrificing long-term margin health.
Action #3: Consider Diversifying Marketplaces
Relying heavily on one platform — especially Amazon — is increasingly risky.
Alternative Marketplaces to Explore
• Walmart Marketplace (fast adoption, lower competition)
• eBay (global reach, strong for unique or refurbished goods)
• Etsy (handmade, personalized, creative categories)
• Zalando (fashion & apparel focus)
• Cdiscount / Allegro / Bol.com (strong in European regions)
• TikTok Shop (explosive growth driven by social commerce trends)
Diversification spreads risk, allows for price variations between channels, and exposes your brand to new customer segments.
Supporting Data
According to Forrester Research, multi-marketplace sellers experience higher resilience during fee changes or competitive disruptions.
Additional Tips for Navigating the New Competitive Landscape
✔ Focus on Brand Differentiation
Temu and Shein compete on price. You can compete on:
• Quality
• Trust
• Customer service
• Brand story
• Sustainability
• Fast & reliable shipping
✔ Reduce Operational Costs
Improving efficiency in packaging, shipping, and returns can add 5–10% back to your margins.
✔ Optimize Advertising ROI
Aggressive competitors raise ad costs. You must refine:
• Negative keyword lists
• Campaign structures
• Bidding strategies
• Creative testing
✔ Monitor Platform Policy Changes Frequently
Fee changes happen multiple times per year. Being informed early helps you adjust faster.
Final Takeaway
The combination of rising marketplace fees and ultra-low-price competitors is reshaping eCommerce seller economics — and the effects will continue into 2025 and beyond.
To succeed, sellers must:
1. Re-model margins for every channel
2. Implement smart, temporary promotional tactics
3. Diversify marketplaces to reduce dependency and risk
Brands that adapt quickly will not only survive this new era — they will outperform slower competitors and build a resilient, profitable eCommerce business.
