I Was Wrong About Amazon Haul (Here's What Actually Happened) Transcript, AI Summary & Key Points

00:00 So, I was searching Amazon for wedding handkerchiefs the other day and I was shocked to find listings priced lower than I can source them from my own suppliers that I've used for 19 years. And I didn't find them on regular Amazon. They were listed on Amazon Hall, the store that I told you a year ago was going to die. So, it turns out I was wrong. Not completely wrong, but wrong enough that I have to sit here and make this video.

00:24 Because this past summer, Amazon made a pivot behind the scenes I didn't catch and something they said in their most recent earnings call told me that they're now going all in. So, in this video, I'm going to show you exactly what Amazon did, why Temu got destroyed, yet Amazon Hall survived, and what every FBA seller, including me, needs to be doing about it right now.

00:47 Now, to understand what Amazon did with Hall, you have to understand what happened to Temu first. Because Hall was a shameless clone of Temu. Both platforms shipped ultra-cheap products directly from factories in China to your doorstep, and both relied on the same loophole in US customs law called de minimis, which let any parcel worth less than 800 bucks enter the country duty-free.

01:10 That rule allowed both platforms to sell $3 phone cases and $5 t-shirts and still make a profit. But then, on May 2nd of 2025, the Trump administration killed de minimis for shipments from China. Every direct from China parcel now had to clear formal customs, pay full duties, and eat a per item fee, and that changed everything. Temu got wrecked. Their US daily active user count fell from 84 million before de minimis to 49 million in 2026, which is almost half of their US audience gone in less than a year.

01:44 They halted direct China to US shipments entirely and then scrambled to build American warehouse capacity from scratch. They rolled out what they called a semi-managed model, where US-based sellers hold inventory locally and Temu just runs the marketplace layer on top of it. Now, when they did this, delivery times went from 3 weeks down to just a couple of days, but prices jumped 20 to 40% across the platform because duties and warehousing don't come for free.

02:13 Temu's whole positioning was built on being the cheapest option online. And once they stopped being the cheapest option, a huge chunk of their user base just walked away. Now, to give you an example, this jump rope used to be only $2.39 on Temu back in the day. Well, today it is $5.61. Now, here's the thing. Amazon Hall was supposed to die the exact same death as Temu because it depended on the same de minimis loophole and it shipped the same direct from China products.

02:43 When I made my original Amazon Hall video a year ago, my whole argument was that the moment de minimis got killed, Amazon Hall would die, too. Well, the model I predicted would die is, in fact, dead. The problem is that Amazon built something else in its place while everyone else was watching Temu bleed out. Andy Jassy himself talked about Amazon Hall in the last earnings call and what he said should strike fear into all FBA sellers today.

03:09 So, what did Amazon do? They didn't shut down Hall when de minimis died, they rebuilt it from the inside. The original Amazon Hall was a pure direct from China delivery model. But, when de minimis died, they started routing Hall inventory into their own FBA warehouse network. They created separate FBA capacity limits specifically for Hall tagged inventory.

03:33 And they offered Chinese sellers a new deal with dedicated staging warehouses in Guangdong where Amazon handles the consolidation, the freight to the US, and the last mile delivery from an American warehouse. So, the Amazon Hall you see today is a completely different business than it was 15 months ago. And it's basically FBA with a $20 price ceiling.

03:56 And the Chinese sellers on Hall are no longer shipping direct to customers. Amazon is holding their inventory in US warehouses and shipping it out on the same logistics network that delivers your Prime orders. Now, this change is important because it eliminated the other reason that I believe that Amazon Hall would get discontinued. Back then, a $3.99 sale on Hall paid Amazon 43% less in fees than the same product on amazon.com and they basically made nothing from FBA cuz everything was merchant fulfilled from China.

04:28 But now, with Hall inventory sitting in FBA warehouses, every Hall seller now pays FBA fees on every unit. So, Amazon gets paid either way. And here's the ingenious move that Amazon made. Amazon kept Hall alive because they knew that people would abandon Temu after the de minimis changes and return back to Amazon. And their entire strategy was to outlast Temu and become the only cheap goods store left standing.

04:55 And today, with Temu hurting big time, Amazon is going all in on Hall and here's the proof. By the way, if you're interested in learning how to start your own profitable online store, make sure you sign up for my free 6-day e-commerce mini course below. 100% free and I guarantee you'll learn a ton. So, Amazon Hall launched in November of 2024. Between that launch and the summer of 2026, Andy Jassy sat through seven consecutive earnings calls and he never once mentioned the word Hall out loud in any of them.

05:25 Analysts asked him about Temu. They asked him about Shein. They asked him about the ultra low price segment and every time he answered in generalities. And in fact, he was silent about Amazon Hall for seven consecutive quarters. But then, on July 30th, he broke the silence. He told investors, and I'm quoting him directly here, that Amazon had expanded ultra-low price selection on Amazon Hall in the US by nearly 20 times since launch and now has over 6 million items priced under 10 bucks.

05:54 So, Jassy has also been telling investors for 2 years that everyday essentials are Amazon's fastest growing category, growing about twice as fast as the rest of the business, and Hall is the same strategy with a $20 cap. So, the way I see it, Amazon just publicly committed to feeding Hall with warehouse capacity, engineering resources, ad budget, and ranking priority inside the main Amazon app.

06:21 Now, I don't want to oversell this. So, here are the real numbers. Amazon Hall is doing about $2 billion a year in US GMV, and Temu is doing about $30 billion. So, Hall is roughly 1/15 the size of Temu right now. Only 16% of US shoppers buy from Hall monthly compared to 28% for Temu. So, Hall is still relatively small, but it is the only direct from China discount platform that is still growing fast.

06:48 Temu and Shein are hurting, and Hall is scooping up the shoppers that they are losing. And eventually, Hall will win this fight by outlasting everyone else. And with Jassy now publicly on the hook for the growth number, Amazon has every reason to keep pushing it. So, here are the implications for all Amazon sellers on the platform today, and it is not good news.

07:07 I told you at the beginning of the video that I did a search for wedding handkerchiefs on Hall, which is what I sell. I've been buying handkerchiefs from the same suppliers in China for 19 years. I know what a hemmed cotton handkerchief costs at the factory. I know what it costs to ship it here, and I know what the tariff adds on top of that right now.

07:26 My landing cost on a basic wedding handkerchief is about a buck 15. On Hall, I found a comparable six-pack listed at $6.49, which which works out to about a buck eight each. That is below my cost before I add a single dollar of margin. Now, most of my customers are buying a monogrammed handkerchief for a wedding, so that buyer is still coming to me for custom embroidery.

07:48 But, the shopper who just wants a plain handkerchief for a couple of bucks used to at least consider my listing on the Amazon search page, but today she sees a Hall listing at a third of the price in the same app, delivered from the same warehouse network as my Prime orders. And I'm willing to bet that this is happening in your category, too. Pick any product on Amazon that sells for under 20 bucks, and there will likely be a Hall version of it sitting inside the same app, and that selection is growing 20x.

08:16 Now, here's the part that annoys me as an FBA seller. The Chinese sellers on Hall are getting a deal that I cannot get. Amazon consolidates their freight out of a staging warehouse in Guangdong, moves it to a US fulfillment center, and then gives it a dedicated section of the app with its own capacity limits. Meanwhile, I pay full FBA fees. I manage my own inbound freight, and I compete in the regular search results against a wall of ads.

08:42 So, Amazon is running two marketplaces inside of one app, and the one with the lower prices is the one Jassy just told Wall Street he's going to grow. So, what do you do about it? Well, here's what I'm doing in my own store, and what I'm telling the sellers in my mastermind groups. So, first, search Hall for your top five products and screenshot what you find.

09:02 If your product exists on Hall at a price you cannot match, stop trying to match it. You will lose that fight every time because the Hall seller has Amazon subsidizing the logistics. You have to move upmarket instead. Add personalization or bundles, or something a factory in Guangdong cannot do at scale. Now, for me, that is monogramming and custom embroidery, and it is the reason my handkerchief business survived Temu and will also survive Hall.

09:29 Second, watch your search rankings because Hall products are already leaking into the main store. In fact, Amazon folded Hall into Prime Day this year with a 50% off event. I would not be surprised if Hall listings start showing up on the regular search page for anything under 20 bucks in the near future. And when that happens, your ad costs will go up because you have to bid against Hall listings as well.

09:52 And finally, this is the one I've been saying for the last 5 years. Get some of your revenue off of Amazon entirely. Every dollar you make on your own site is a dollar Amazon cannot compress by launching a cheaper store next to you. Now, here's the big picture as I see it. Temu's still hanging around. They took the hit in 2025, moved their inventory into US warehouses, and their US user numbers are recovering this year.

10:14 But, they are doing it close to Amazon prices now with slower delivery than Prime and a brand most Americans do not trust. Only 6% of US consumers say they trust Temu. On the contrary, 86% say they trust Amazon. And the only reason people shop Temu was the price, and that gap is mostly gone. Meanwhile, there are two other factors that will cause Amazon Hall to continue to grow.

10:41 The first is the economy. 75% of US households say they are trading down to cheaper brands and retailers this year because tariffs and gas prices are squeezing their budgets, and that is exactly the shopper Hall was built for. The second is where the products come from. 71% of Americans have an unfavorable view of China, and a Chinese shopping app has to fight that stigma.

11:02 Amazon Hall sells the same factory goods as Temu, but the shopper sees an Amazon checkout, an Amazon return policy, and an Amazon delivery van. Now, Temu is still bigger than Amazon Hall by a factor of 12 based on US sales, but Hall has Amazon's logistics, Amazon's trust, and a shopper base that's getting more price sensitive every quarter, which leads me to believe that Amazon will eventually overtake Temu.

11:29 Now, here's is one thing that I'm going to watch. Amazon reports earnings at the end of October. If Jassy talks about Hall again, it means that Hall growth is accelerating and Amazon's main marketplace prices will continue to get compressed. But overall, it's not looking good for Amazon sellers going forward. So, diversify your sales on your platform while you still can.

11:49 And now that you understand where Amazon is heading, make sure you watch this video next on how I would get started with e-commerce today if I were to start all over again.