Temu makes money through several smart strategies. First, they charge sellers a transaction fee for every purchase made through their app. This ensures a steady income stream.
Another way Temu earns is by taking a small commission on each sale. This means a portion of the sale price goes directly to Temu, adding to their revenue.
The platform also offers paid promotions. Sellers can pay to highlight their products, which not only boosts their visibility but also generates extra money for Temu.
Data mining is another method. Temu collects user data, such as names and payment details, which they can sell to advertisers and other interested parties.
By sourcing products directly from manufacturers, Temu keeps costs low. This is made possible through their connection with Pinduoduo’s supply chain. Lastly, their group buying model helps increase sales volumes, compensating for low margins on individual products.