Temu is probably one of the cheapest e-commerce stores in the world. However, there has been a lot of speculation as to how they can sell at such a low rate. In this post, we will try to decipher why Temu is so cheap for shopping.
Why is Temu so cheap?
Following are the various reasons why Temu is so cheap.
- No Middleman
- Temu’s partnership
- Smart Marketing
- Temu’s dynamic pricing algorithm
- Incur strategic losses
- Negotiation capabilities due to purchasing power
- Strategic use of Temu coupons
Let us talk about them in detail.
1] No Middleman
One of the reasons why Temu can offer such an affordable price is that it has eliminated all the middlemen, and the only communication that’s prevalent is between the seller and the customer. Due to this, any charges that the middleman would have taken will not be added to the final price of the product. Not just that, it also offers a transparent and efficient shopping experience.
2] Temu’s partnership
You can just cut the middleman and call it a day. There are a lot of shenanigans involved in the whole process that Temu has streamlined and made cost-effective. Temu guarantees that anything purchased on its website is pretty secure as it is PCI-certified, which is the highest level of payment link security you can have. You can also use PayPal, Google Pay, or Apple Pay to transact on Temu.
They have also partnered with some logistics company that ensures that your product is delivered on time. Because of all this, they have been able to cut down a few corners.
3] Smart Marketing
One of the things a lot of brands struggle with is marketing. Temu has been able to do this in a very smart and cost-effective manner. They have two programs- Temu Affiliant and Temu Popular games. Here, one can share the app with their acquaintances and make a commission out of it. Not just you, but the friend with whom you have shared the link will also get a 50% discount on their friend order.
4] Temu’s dynamic pricing algorithm
Temu has been able to control the cost of the items because of the fact that they use a dynamic pricing algorithm. This enables Temu to study many factors, such as supply and demand of a particular product, market rate, and requirement at this point in time. Due to this, Temu can ensure competitive pricing, especially during a certain period. So, if you are an avid shopper, Temu will seem a lot more cheaper to you if you can wait for a little longer.
5] Incur strategic losses
Temu’s willingness to incur losses by lowering the prices for a certain period by lowering the price and making up for it, in the long run, enables it to grab the market so quickly. As per reports from Wired, up until now, Temu losses somewhere around $30 per order as it is trying to capture the market. That’s not a bad thing for users.
6] Negotiation capabilities due to purchasing power
Because Temu has an enormous fan base and can purchase goods in bulk, it can negotiate with the vendors to get the lowest price. This is not a privilege that all e-commerce websites can enjoy, and most certainly not the new one. Lowering the price allowed Temu to increase its sales, and because of this, it can maintain that low price.
7] Strategic use of Temu coupons
Temu has used the coupon codes quite strategically. It encourages users to do bulk orders, so if you buy something that costs $100, you will get $40 off $150 in your next order. And this cycle continues.
These were some of the reasons why Temu has been so successfully able to sell at low prices and gain customers.
Why does Temu give free stuff?
Temu is still trying to grow and it is trying everything in its power to lure the customers. Attractive pricing, promo codes, and gifts are some of the ways by which it can achieve its goal. So, you will continue to see great offers on the website.
What is the Temu controversy?
Some Temu users have registered complaints regarding slow deliveries, unresponsive customer service, and poor product quality. Due to this, a lot of users have registered complaints against the service as they are clearly not happy with what they offering. To know more, check out different TEMU scams and see if the Temu website is legit.
Read: How to become Temu Influencer?