With 400,000 orders per month and a profit of 7,000 yuan, Temu sellers are trying to overwhelm their peers

Behind Temu's low-price market share, it is ultimately thousands and thousands of sellers who bear the brunt of it all.

Temu is aggressively grabbing Amazon's orders with extremely low prices, but this seems to be at the expense of sellers' profits. One top seller has 400,000 orders a month, but only makes 7,000 yuan in profit; some of its peers only have about 600 orders a day, but their gross profit is less than 500 yuan.

Even so, there are still a group of people who continue to roll in like crazy. After Temu opened the customer service function, the first message the seller received was a greeting from a colleague. The familiar five words "I'm going to roll you to death" made him laugh and cry.

As profits were squeezed, sellers were quitting, and Temu began to be uninstalled by buyers due to poor quality. The platform's extremely low prices may not have the basis for a virtuous cycle.

Temu sellers have 400,000 orders per month, but their profit is only 7,000 yuan

Recently, a Temu seller revealed the situation of a fellow seller who was selling well: he received 400,000 orders in April and earned 7,000 RMB, but the premise was that the whole family was involved in the packaging. This is really sad, Temu sellers are really trying to give benefits to foreigners!

The seller's case resonated with many peers. One seller who runs an Amazon business said that Temu is a good platform with large traffic but low profits. It has about 600 orders per day and a gross profit of less than 500 yuan. After a month, there should be some profit after deducting labor costs, which is suitable for clearing Amazon's local warehouse inventory.

A fellow seller joked: " It turns out that you can't make even 1 yuan per order on Temu !" Then many sellers said that this is the actual situation. Not many people can make 1 yuan per order on Temu, and after allocating the labor costs, it is almost a loss-making business. In this case, buyers will continue to ask you to lower the price, and the products that sell well will be reduced in price. After the price reduction, the profit of many products will be directly negative.

"The cost of one product including the express fee is 63 yuan, and the quoted price is 99 yuan. Temu's buyers demand 18 yuan, so I lose 45 yuan by selling one. Another product costs 120 yuan, and the quoted price is 219 yuan, but Temu actually thinks that 41 yuan can include free shipping." A seller who just joined Temu seemed a little excited.

"Temu's low prices are built on sacrificing sellers' profits. This platform is a troublemaker!" The dissatisfaction of a large number of sellers continues to ferment.

Greetings from colleagues: "I'm going to roll you to death"

Earlier reports confirmed that Temu lost an average of $30 per order in its attempt to enter the US market. Some sellers asked a soul-searching question: "Do you really make money with Temu?"

Under the extremely low prices, a group of sellers were the first to give up. Voices such as "Temu can no longer be run" kept appearing. However, as Temu continued to publicize its rapid traffic and quick orders, even after some people were dissuaded, new suppliers continued to join the "charity army". This also seemed to intensify the internal competition among Temu sellers.

Temu recently launched a customer service function. The seller excitedly checked the first consultation message, which turned out to be a greeting from a colleague: "I'm going to crush you."

Temu's low price is also due to the platform policy. In May this year, Temu launched the "ultimate" price-cutting new policy, which allowed sellers to fight each other once a week. The one with the lowest price for the same product will win. The winner will have an advantage in traffic. Products that fail in bidding will be restricted from stocking and launching new products by the platform.

This has exacerbated the anxiety of sellers. After all, no one wants to be eliminated in the competition. Many people are frantically competing for a position even if they are not making any profit.

Some sellers said frankly: I hate Temu's sales model, which is very unfriendly to sellers. But its low prices do attract many customers and can retain some buyers, but the final result for sellers will not be too good. In this ecosystem that only values ​​low prices, the price of normal products cannot rise at all, but those who cut corners and take advantage of platform traffic will make money.

Grab the order from Amazon, how far can Temu’s extremely low prices go?

Buyers are haggling over prices, policies are suppressing prices, and sellers are engaging in a price war, which will continuously raise Temu's low-price ceiling.

For the same product, the price on Temu is much lower than that on Amazon. For example, for solar lamps, industry insiders found that the top 8 products on Amazon are generally priced between $20 and $40, while on Temu, the top 8 products are mostly priced at around $5, with the lowest price being $2.28.

According to a rough calculation by the person, the top eight solar lamps on Amazon sold 65,000 units, and Temu’s total sales were about 400,000 units. Temu’s low price has occupied a large market share in the short term, and is eating into Amazon’s orders.

However , Amazon also has its own advantages compared to Temu. Temu sells low prices, while Amazon sells fast delivery.

For example, the same vintage polka skirt costs $43.99 on Amazon and is delivered in New York in one day, but it costs only $13.58 on Temu, and the delivery time is at least a week.

(Image source: Marketplace Pulse)

Every item on Amazon includes a shipping cost. Over the past two decades , the e-commerce giant has been building warehouses and investing in delivery infrastructure to get goods to consumers faster . It has taught consumers that unlimited selection combined with fast delivery is the right way to shop online . Amazon's bet is that most shoppers prefer fast delivery .

Analysts believe that as long as Amazon can provide fast shopping, it is unbeatable. Most shoppers will not slow down their shopping for a lower price .

Amazon also announced that it would remove Temu from its pricing algorithm because Temu did not meet Amazon's "standards". Most people think that Amazon does not want to get involved in a price war with it. Even the platform is no longer competitive, so Amazon sellers do not need to compare prices with Temu.

Moreover, Temu is now criticized not only for its delivery speed, but also for its more "fatal" quality problems. Currently, Temu has been criticized by a large number of American netizens for its poor product quality and inconsistent goods.

An American netizen shared his shopping experience on Temu, saying that the product was pungent and had no effect after receiving it. After the video went viral, more netizens began to complain about Temu's poor product quality, wrong sizes, and mismatched products. Many consumers felt that receiving the goods was like "collecting garbage" and began to uninstall the app.

After being frequently complained by sellers and buyers, Temu’s subsequent development has caused concern among many people in the industry.

An industry insider believes that in the short term, Temu's low prices will divert some traffic and orders , threatening the interests of Amazon sellers. However, as more sellers join Temu and buyers continue to lower prices, sellers' profit margins will become smaller and smaller , which will inevitably lead to sellers' dissatisfaction. Sellers can only make money if they don't care about quality. In the long run, for American consumers who are accustomed to using high-quality products and pay attention to quality, the platform will gradually lose its appeal.

Some brand sellers with strong product strength will definitely focus on profits. They will not rely too much on Temu , but will use this platform as a tool to clear inventory.

Extremely low prices are a double-edged sword, and Temu may end up losing consumers and sellers.

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