Temu prices are so low due to several key factors. Firstly, Temu sources products directly from manufacturers in China, cutting out middlemen and reducing costs significantly. This direct sourcing allows them to offer products at much lower prices compared to other retailers.
Furthermore, the manufacturing costs in China are generally lower. Cheaper labor, efficient machinery, and supportive government policies contribute to these reduced production expenses. This enables Temu to produce goods at a lower cost and pass the savings onto customers.
Another reason is Temu’s use of economic small package shipping. By partnering with logistics companies to consolidate shipments and optimize routes, Temu can keep shipping costs low. This method allows them to offer affordable shipping rates, making their products even more attractive to buyers.
Temu also sells unbranded products, which means they save on expensive branding and marketing costs. This strategy reduces overhead expenses and keeps product prices down. Additionally, Temu’s lean business model helps in maintaining low operational costs, further enabling them to offer competitive prices.
Lastly, Temu takes advantage of the de minimis provision, allowing imports under $800 to enter the US without duties. Combined with heavy discounts, promotions, and high competition among sellers, these factors ensure that Temu can provide exceptionally low prices to its customers.