Temu sells its products so cheap by taking advantage of several strategic factors. One key reason is the de minimis exception, which allows shipments under $800 to bypass U.S. Customs inspections and taxes, greatly reducing costs. This helps Temu keep prices low for buyers.
Another factor is low manufacturing costs. Temu pressures manufacturers to lower prices, resulting in minimal profit margins for them. Temu also covers most international shipping costs, relying on frequent orders from American consumers to offset these expenses.
Additionally, many items on Temu are unbranded knockoffs of popular products. These “dupes” are made in China at low costs, enabling Temu to sell them at significantly lower prices compared to branded items.
Temu also eliminates middlemen by directly connecting consumers to manufacturers. This direct access reduces markups and transportation costs, passing the savings on to customers. The efficient supply chain further minimizes unnecessary costs, making products even cheaper.
These strategies combined allow Temu to offer products at remarkably low prices, making it an attractive option for budget-conscious shoppers.