Two major China-based Amazon merchants say Amazon reps have recently been offering incentives like free ads and lower commissions if they stop selling on Temu
The Information :
Context & Ripple Effects
Amazon had already elevated Temu and Shein as key retail competitive concerns in internal discussions, while also preparing a low-cost direct-from-China storefront aimed at the same seller and price segment.
The contest is increasingly over merchant supply, not only consumer promotions: Temu's effort to recruit Amazon merchants had already triggered supplier backlash over its recruitment push.
First-order effects
- The two merchants reporting the offers could receive lower selling costs and advertising support from Amazon if they stop listing on Temu, making their channel choice immediately more consequential.
- For Amazon, the reported incentives target Temu's access to China-based marketplace inventory; for Temu, they risk raising the cost of retaining overlapping sellers.
Second-order effects
- Other merchants selling on both platforms may seek comparable concessions, putting pressure on Amazon's commission and ad economics in the affected cohort.
- Temu may need to counter with better merchant terms or recruitment efforts, extending the seller-acquisition fight that followed its earlier campaign to draw Amazon merchants.
Third-order effects
- If such conditional incentives become a broader playbook, marketplaces may compete more through seller economics and channel access rather than solely through consumer-facing prices.
- The episode points to a more vertically contested cross-border marketplace model, where platforms build direct-from-China supply while trying to limit rivals' access to the same merchants.
The trend: Cross-border marketplaces are shifting from competing for shoppers alone to competing directly for the merchants and supply pools that determine price and assortment.