5 min read

Why Is Temu So Cheap: Decoding Temu's Low Prices

Written by
Vanessa Hung
Published on
October 4, 2023

Ever wondered why products on Temu are remarkably cheap? Here's a fun fact: factors like low manufacturing costs and the de minimis exception make this possible. This blog will delve into these reasons, shedding light on how Temu manages to keep prices so low.

Sounds intriguing, right? Keep reading!

The Factors Behind Temu's Low Prices

Temu's low prices are attributed to the de minimis exception, which allows for tax-free imports of goods below a certain value.

De minimis exception

The De minimis exception plays a crucial role in keeping Temu's prices low. This legal principle allows small amounts of goods to enter a country tax-free, reducing the cost that retailers must pass on to consumers.

Online marketplaces like Temu use this rule strategically by shipping items individually, rather than in bulk. They essentially dodge import duties and taxes, leading to significantly lower retail prices.

A vast majority of products sold on these platforms have values below the De minimis threshold, making them eligible for duty-free and tax-free entry into many countries. By leveraging this exception, such websites are able to deliver surprisingly inexpensive products right to your doorstep!

Low manufacturing costs

Low manufacturing costs play a pivotal role in keeping Temu's products inexpensive. The company employs NextGen Manufacturing (NGM) methods which promote cost effectiveness. NGM emphasizes on lean production practices, reducing waste and thereby lowering the overall costs of production.

Direct access to global suppliers provides another advantage for low-cost manufacturing at Temu. Products are mass-produced with wallet-friendly economies of scale. By doing so, the need for middlemen is eliminated which results in additional savings passed onto consumers in the form of bargain prices.

Knockoffs and unbranded products

Knockoffs and unbranded products play an undeniable role in the low pricing structure of Temu. These items often mimic popular, high-priced offerings without the associated brand reputation or quality guarantees.

They're mass-produced, leveraging economies of scale to trim manufacturing costs significantly.

The absence of branding also avoids licensing deals or royalties that could inflate product prices. Likewise, unbranded goods primarily target cost-conscious customers who prioritize affordability over brand prestige.

As a result, these financially accessible options continue to fuel consumer interest while boosting retail volumes for platforms like Temu.

Wide range of product categories

Temu's affordability can be attributed to its wide range of product categories. From electronics to clothing, home goods to beauty products, Temu offers a diverse selection that appeals to a broad customer base.

By catering to different needs and preferences, Temu is able to leverage economies of scale and negotiate competitive prices with suppliers. This allows them to pass on the savings to customers, making their products more accessible and affordable for everyone.

Whether you're looking for a new smartphone or a trendy outfit, Temu's extensive product catalog has something for everyone at an unbeatable price.

Ethical Concerns with Temu's Pricing Strategy

Temu's pricing strategy raises ethical concerns, including the exploitation of labor costs and a lack of transparency. Find out more about these issues and their impact on small businesses.

Exploiting labor costs

Temu's low prices can be attributed to their practice of exploiting labor costs. By outsourcing production to countries with lower wages, Temu is able to cut down on manufacturing expenses and offer products at a significantly reduced price.

This strategy allows them to take advantage of cheap labor without considering the ethical implications or the effects it has on local economies. Although this approach may seem appealing from a consumer perspective, it raises concerns about fair treatment of workers and undermines the livelihoods of those in regions where labor is being outsourced.

Lack of transparency

Temu's pricing strategy lacks transparency, making it difficult for consumers to fully understand how the company is able to offer such low prices. Without clear information about production costs and profit margins, customers may question if Temu is cutting corners or compromising on quality to keep their prices down.

The lack of transparency also raises concerns about ethical practices, with some wondering if the brand is exploiting cheap labor or engaging in unethical manufacturing processes. Overall, the lack of transparency surrounding Temu's pricing strategy leaves many consumers feeling unsure about supporting the brand.

Impact on small businesses

Temu's low prices may seem like a great deal for consumers, but they can have a significant impact on small businesses. With their affordable products flooding the market, local businesses struggle to compete.

Temu's global suppliers and mass production capabilities allow them to offer products at rock-bottom prices, undercutting smaller businesses that cannot match those prices. As a result, many small businesses are forced to close their doors or find new ways to stay competitive in this challenging market.

The impact of Temu's pricing strategy on small businesses is undeniable and must be taken into consideration when evaluating the overall consequences of their business model.

Safety and Quality Concerns

Unbranded products and lack of regulation raise safety and quality concerns.

Unbranded products

Unbranded products play a significant role in Temu's low prices. These products, which are mass-produced without any specific brand or logo, are often more affordable compared to branded alternatives.

By sourcing these unbranded products from global suppliers through NextGen Manufacturing NGM, Temu gains direct access to a wide range of economical options. This allows them to offer budget-friendly prices while still maintaining a variety of product categories for their customers.

Lack of regulation

As tempting as Temu's low prices may be, it's important to consider the lack of regulation surrounding their products. Without strict oversight, there is a risk that the quality and safety standards may not be up to par.

This can lead to potential issues with unbranded products or knockoffs being sold without proper testing or certifications. It's crucial for consumers to weigh the affordability of Temu against the potential safety concerns that come with a lack of regulation in order to make an informed purchasing decision.

Trustworthiness of reviews

Consumer reviews play a crucial role in influencing purchase decisions, but when it comes to Temu's low-priced products, the trustworthiness of reviews may be called into question.

With such affordable prices, some consumers wonder if these glowing reviews are genuine or if they have been manipulated. It's important to approach these reviews with skepticism and carefully consider factors like the number of ratings and detailed feedback from verified purchasers.

By doing so, you can make a more informed decision about whether or not to trust the reviews before making a purchase.


So, why is Temu so cheap? The answer lies in a combination of factors. From the de minimis exception that allows for lower import taxes, to the low manufacturing costs and wide range of product categories, Temu is able to offer affordable prices.

However, there are ethical concerns surrounding their pricing strategy as well as safety and quality concerns with unbranded products and lack of regulation. Despite these issues, Temu remains a popular choice for those looking for budget-friendly options.

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