Temu Is Killing Amazon FBA Sellers - Here's What's Happening...

there hasn't been much media coverage on this yet but timu is quickly eating away at Amazon's market share in the e-commerce space which will have a lasting impact on all Amazon FBA sellers in just two short years teimo has become a major rival to Amazon and they've been on a sharp rise since their launch in September of 2022 they've got Deep Pockets too exploding in popularity after spending over 14 million to run multiple ads during this past Super Bowl now according to statista timu was the most downloaded e-commerce app in 2023 surpassing Amazon and Shen with over 120 million downloads but have they managed to grow so big so quickly and how badly are they hurting Amazon sellers will teu continue its rapid growth this year and if so can Amazon survive so in this video we'll explore what Teemu is how it's shaking up the industry and why Amazon might need to rethink its strategy and if you're an Amazon FBA seller you got to pay attention so first off if you haven't heard of timu they are an e-commerce company specializing in selling dirt cheap products to cost conscious consumers in more than 45 countries worldwide including the United States all U's products are manufactured in China and are shipped directly to Consumers from China timu offers free shipping and while they don't ship as quickly as Amazon Teemu Shoppers don't seem to mind waiting a couple of extra days to save money now while teu States on its website that it was launched in Boston Massachusetts the company is a subsidiary of pind daa which is a major Chinese e-commerce company pindor or PDD for short was founded in 2015 using the same model of extremely low prices that teu employs today now while PDD had its early doubters who didn't believe the company could turn a profit by selling items for next to nothing they managed to find success in the Chinese market against giants like Alibaba and jd.com in fact near the end of 20123 PD's market value Rose to $195 billion and surpassed alib for the very first time now armed with a huge War chess that they can spend on Advertising PDD has infiltrated the US market with timu and they're greatly hurting Amazon Shen and other discount online marketplaces but how has timu been growing so fast and what are the numbers well according to gws magnifi teu had 82.4 million active Shoppers on its app in September of 2023 up from only 4.6 million the previous year now by comparison eBay only drove 40 million online Shoppers in September while timu ran neck and neck with Walmart which had 85.5 million online users and while Amazon is still number one with 142 million monthly users in September teu is pretty darn close in traffic after just two years but how has teu managed to gain ground on Amazon so quickly well the secret lies in U's ability to offer products at significantly lower prices than Amazon teu has disrupted Amazon's business model by making it possible for lowcost Chinese manufacturers to bypass the middleman and ship directly to the consumer which allows them to cut cost dramatically Amazon's business model on the other hand charges higher fees to Amazon FBA sellers including referral and storage fees which forces them to sell at higher prices in order to make a profit now in my last teu video I highlighted a memory foam floor mat that sells for $46 on Amazon but on teu you can get it for $17 you heard that correct the same product listed on Amazon is selling on teu for 40x cheaper and this is happening with thousands of products right now Teemu is selling unbranded products that are being sold at much higher prices on Amazon and people are noticing while Amazon can ship products more quickly than teu cash strapped consumers are willing to wait 7 to 15 days to get their items at much lower prices teu also has a huge tax advantage over Amazon due to the DI Minimus loophole that allows Chinese sellers to not have to worry about paying taxes tariffs or customs duties now the dominous loophole is that any shipment sent into the United States that is valued at less than $800 does not have to pay any taxes whatsoever because timu is shipping individual products from China into the United States they don't have to pay any customs duties or taxes at all meanwhile every Amazon FBA seller has to import containers of products into the US and pay both customs duties and tariffs on the products and keep in mind there are tariffs in the double digits for many products now because of these two major factors Teemu is decimating Amazon sales in many categories and hurting third-party Amazon FBA sellers Amazon reps have told me that the Amazon apparel Market is down at least 30% year-over-year because of places like teu and shien but it's not just low prices that are driving timu success timu also entices Shoppers by gamifying the shopping experience when you download and log into the teu app you are bombarded with time-sensitive offers to win coupons worth up to $200 or more but you got to be quick it's a race against the clock if you want to score these deals at next to nothing prices Now by placing these seemingly incredible offers right at the beginning of your shopping Journey timu makes you want to keep scrolling through the app looking at hundreds of dirt cheap products you never intended to buy now speaking of gamifying timu also lures users with online games built right into their app for example team fishland allows players to catch fish and earn money teu redeem cash allows players to win real money by redeeming coins they won in other teu games and these online games don't just offer prizes they keep users on the app for longer periods of time teu also leverages social connections by encouraging users to buy together and earn bulk discounts this includes a referral program that asks users to invite their friends and family to join tumu in exchange for discounts and Gifts timu makes it easy for users to share their referral codes on Facebook Tik Tok and Instagram and so far Amazon doesn't have an answer for the social shopping experience that Teemu has created now how is Amazon doing how is the e-commerce giant fighting back against the increasing pressure from teu now to be clear Amazon is still a Powerhouse in the e-commerce industry with over 200 million Amazon Prime members worldwide it is a loyal customer base that appreciates its quick shipping streaming services and exclusive deals the Amazon strength lies in its established brand extend product catalog and the convenience it offers now while Tim's low prices are chipping away at Amazon's competitive Advantage Amazon still offers a much wider product range in timu they have millions of Sellers and a much larger catalog which includes highquality products from well-known brand names and sellers can still access double the customer base by selling on Amazon versus Teemu however the landscape is evolving and Amazon is definitely feeling the heat but don't expect Amazon to just roll over they will continue to innovate and find ways to maintain a competitive Advantage for example Amazon just announced a new generative AI shopping assistant called Rufus and according to Amazon CEO Andy jasse Rufus will be trained on Amazon's product and customer data and greatly improve the customer experience by answering questions and making product recommendations that are based on customer preferences now while Rufus is still in beta mode Amazon plans to roll it out to all us consumers in the near future anyway this is just one example of how Amazon continues to innovate in the face of increased competition and while Amazon Remains the Undisputed leader the sudden rise at tumu is a reminder that the e-commerce landscape is constantly changing and no company is safe now let's switch gears and take a look at teemu's challenges by offering ridiculously low prices teemu's rise seems Unstoppable but they have their own set of challenges as well if Teemu wants to catch Amazon they will need to overcome some big problems first off U's quick rise has made them vulnerable to scammers looking to capitalize on their popularity now these Bad actors create imitation sites and products deceiving consumers and tarnishing teemu's reputation in 2023 timu took legal action against over 50 us and European websites accusing them of trademark infringement offering fake tumu coupons and blind boxes and fishing activity among other things and according to teu many of these websites trick users into clicking links to collect their personal information and then install malware on their devices now while teu is taking strong legal action if the level of scammy fraudulent activity continues it may scare off Shoppers who are already concerned about teemu's reputation as a safe place to do business now te's challenge will be to keep pressure on these scammers and Shady websites to protect the company's reputation but those aren't the only legal issues that Teemu is facing teimo has been sued by one of its main Rivals shien and among other things shien alleges that timu sellers have been stealing images from their website and using them to sell products on teu Sheen owns the copyright to many of the images on their website and chion has also accused teu of engaging in unsavory business practices by paying influencers to comment negatively about shien and in response Teemu has launched her own lawsuit against shien accusing them of using Mafia style intimidation of suppliers in order to restrict U's expansion into the US now who knows where these disputes will end up but there's some d that they could derail teemu's growth into the US market meanwhile if timu wants to go head-to-head with Amazon they will eventually have to convince top brands to sell their products on its platform and that's not going to be easy because teu has gone to where it is today by selling cheap products with questionable quality buyers aren't thinking about timu when they want to purchase higher pric quality items timu has yet to receive accreditation with the Better Business bureo it has a C+ rating and an average customer review rating of just 2.5 out of five with over 1,600 complaints closed in just the last year now as long as teu faes questions about the quality of its products and its reputation as a reliable seller top brand names will continue to stay away now the poor quality products on teu remain a competitive Advantage for Amazon which is a much more established and trusted platform finally timu also has to battle its perceived connection to the Chinese communist government another Chinese company Tik Tok has received a lot of attention from us politicians about its ties to to the Chinese government there have been calls to ban Tik Tok in the US due to concerns that Tik Tok is collecting sensitive information on millions of us users and feeding it over to the Chinese government now with the attention focus on Tik Tok timu has managed to fly under the radar but how long will it be before people start questioning teemu's ties to China after all timu has way more access to user information than Tik Tok including your name email address phone number and credit card information and if you use a social media account to log teu they can also see your profile photo and anything you publicly share on your channel they can even see the make and model of the device you're using your IP address and your location data now with all eyes on the US government's decision on the future of Tik Tok in the US is teu just a trojan horse and are Regulators paying attention well the same accusations that have been levied against Tik Tok are being thrown at teu that is that they are making money on your data by collecting it and selling it over to the Chinese government but here's the million-dollar question will Teemu continue its sharp rise in canid Dethrone Amazon and will being an Amazon FBA seller be worth it in just a couple of years while teimo has certainly disrupted the e-commerce landscape and gained a substantial following it's tough to predict the future however I believe timu will continue its growth trajectory in 2024 affordability remains an issue in the United States and Americans facing a cash crunch will continue to favor teemu's low pricing over Amazon's fast shipping teemu's long-term success will hinge on its ability to navigate its many challenges which include Waring off fraudulent websites that risk damaging teemu's reputation a need to attract highquality Brands and products and a growing perception that timu may be selling information over to the Chinese government none of these are small challenges but whatever the outcome one thing is clear the competition between timu and Amazon is pushing both platforms to innovate and deliver better value to Consumers and as an Amazon Seller myself just be aware that if you don't sell quality products and establish a recognizable brand online your days are numbered now if you enjoyed this video then make sure you watch this video here on how team is killing us businesses

Channel: MyWifeQuitHerJob Ecommerce Channel

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Id: hGvBOLvos5M

Length: 12min 43sec (763 seconds)

Published: Tue Mar 05 2024