Imagine a shopper choosing to purchase a $12 gadget on Temu instead of a $20 one on Amazon. A month later, the product breaks. The shopper replaces the item—again on Temu. Has the shopper really saved money?
A recent study from Omnisend, highlighted by USA TODAY, reveals that while 87% of consumers trust Amazon, 53% still shop on Temu—even though only 5% actually trust it. The driving factor? Price. Consumers are willing to take a chance on lower-cost alternatives, even when reliability is in question.
The Trade-Off Between Price and Trust
Temu’s appeal lies in its significantly lower prices. According to the study, consumers can save an average of 40%—or about $13.37 per product—by shopping on Temu rather than Amazon. However, these savings may come with hidden caveats, such as product durability, return hassles, and potential quality issues.
While many consumers prioritize price in their initial purchase, long-term costs add up if items require frequent replacement.
At the same time, Amazon has been expanding its offerings with Amazon Haul, a lower-cost shopping experience that mirrors some of Temu’s value-driven appeal. Amazon Haul is designed for budget-conscious consumers, offering deeply discounted items from third-party sellers. However, unlike Temu, Amazon Haul still operates within Amazon’s ecosystem, meaning it benefits from Amazon’s fulfillment infrastructure, return policies, and some level of quality control.
Will Tariffs Shift Consumer Behavior?
The landscape may be changing as tariffs impact pricing. With new U.S. tariffs on foreign goods, Temu’s competitive pricing advantage could diminish. According to the study, 29% of consumers said they would immediately stop or reduce their purchases from Chinese marketplaces if prices rose. Another 20% indicated they would only continue shopping if price increases were minimal.
However, Amazon’s introduction of Amazon Haul adds complexity to this shift. While Amazon’s core marketplace has long been built on trust and reliability—often offering lower prices than many U.S. retailers—Amazon Haul takes a different approach. It competes more directly with Temu by prioritizing affordability and sourcing from similar suppliers. If tariffs drive up prices on Temu, some price-sensitive shoppers may not simply return to Amazon’s traditional marketplace but instead shift to Amazon Haul as a similarly budget friendly, yet more stable and trustworthy, option. This dynamic could reshape how consumers weigh price versus trust, with Amazon now offering both a reliability-driven and a price-driven shopping experience.
Photo by Anastasios Antoniadis on Unsplash
What This Means for Brands on Amazon
For brands selling on Amazon, these insights reinforce a critical point: Price may drive the first sale, but trust builds repeat customers.
To compete effectively:
- Leverage Amazon Brand Registry: Protect your brand identity and ensure consumers are buying authentic products.
- Optimize Product Listings: Use enhanced content and clear descriptions to highlight quality, durability, and long-term value.
- Engage with Customer Feedback: Maintain transparency in reviews and address concerns to strengthen trust with shoppers.
Brands should also be aware of Amazon Haul’s growing presence. While it expands Amazon’s reach to more price-sensitive consumers, it also introduces new challenges. Brands should carefully evaluate whether participating in Amazon Haul aligns with their positioning or if they should emphasize the value of their products within Amazon’s traditional marketplace.
As consumer behavior shifts in response to economic factors, brands should focus on more than just pricing strategies. By reinforcing trust and reliability, they can foster long-term customer relationships that extend beyond the first transaction.
