Oct 22 (Reuters) - Amazon.com ( AMZN ) is imposing

severe price caps on what merchants can charge for their

products on a new low-cost storefront that the e-commerce giant

is preparing to launch, the Information reported on Tuesday.

The company's price limits include $8 for jewelry, $13 for

guitars and $20 for sofas, according to the report, which cited

messages from Amazon ( AMZN ) to merchants. The messages included a list

of 700 items, it said.

Amazon ( AMZN ) plans to ship orders to U.S. customers directly from

a facility in Guangdong, China, the report said, adding that it

was charging sellers lower fulfillment fees for items sold

through the new storefront.

Amazon ( AMZN ) did not immediately respond to a Reuters request for

comment.

The company has been working to roll out a low-price

storefront site, according to media reports earlier this year,

as it rushes to tackle competition from discount sites such as

Temu and Shein, which have exploded in popularity due to their

rock-bottom prices.

The price caps, if put in place, would represent a shift in

strategy for Amazon ( AMZN ), which has historically not set strict

limits for sellers on its platform.

This comes at a time when the company is seeing signs of

weakness in retail sales. Its online stores sales rose just 5%

in the second quarter, slowing from a 7% increase in the first

quarter.