Why is Temu So Cheap: Can You Dropship With It?

Temu is cheap for several reasons: low-quality products, loss leader pricing, and digital-first operations. Contrary to popular belief, Temu does not sell items. There are sellers on the platform. 

In this article, we will talk about why Temu products are cheap. In addition, we will cover: 

• Is Temu good for dropshipping?
• How do you connect Temu with Shopify?
• Risks of dropshipping with Temu

Key Takeaways

• Temu is safe and secure
• Dropship with Temu, but with caution
• Temu is no different from AliExpress and Amazon

In the end, this article will help you decide if Temu is an excellent product source for your dropshipping business. 

Reasons Temu Products Are Cheap

1. Direct Sourcing 

Temu is a marketplace that directly gets its products from suppliers and manufacturers. This means that there is no middleman. It is why the products are so cheap. Its business model differs slightly from AliExpress. 

On AliExpress, the sellers are the manufacturers, but they price their goods in retail. On Amazon, the sellers are either dropshippers or wholesalers, and they add a mark-up to the prices of their goods. 

Temu combines the business models of Amazon and AliExpress. They source the products from manufacturers, and they add a bit of a profit or markup.  

2. Loss Leader Pricing

Temu began its operations as an unknown brand or entity. Their goal is to compete with the biggest online retail platforms like AliExpress and Alibaba. 

To do this, they must give people a reason to buy. Apart from their aggressive marketing, they marked down the prices of many of their products. 

A strategy like this is called loss-leader pricing. It is a business model where you sell your goods for a loss instead of a profit. The goal is to get a slice of the market share and build credibility. Once you have loyal fans and people begin to like your service, they will come back for more.

Here are the advantages of loss leader pricing: 

• Attracting new customers
• Driving traffic to your website
• Building a reputation 
• Proving the value of your business
• Brand awareness

If you are a dropshipper, you can do the same. However, many of us dropshippers do not have the budget to do it. Temu, on the other hand, has millionaires that back up the business. They can suffer these losses for the time being, in the hope that they recover these losses later on.

3. De Minimis Taxation

There is a law in the USA where goods below $800 are not taxed. In other words, they are duty-free. The thing is that in February 2005, Trump’s administration eliminated this provision. 

Here are the reasons why de minimis taxation is eliminated:

• Reduce the surge of Chinese products flooding the American market
• Prevent giant corporations from taking advantage of it
• Put forward locally made US goods over goods from China

Now that this tax exemption is abolished, Temu can no longer offer its goods at ridiculous prices. Although they can still market their products at a loss leader pricing, it will not be sustainable in the long run. I would not be surprised if Temu’s product prices eventually get similar to AliExpress prices.

4. Counterfeit Items

Temu is chock-full of replicas, mostly poor ones. That is why the products are cheap. Here is a screenshot of an original, branded drone: 

Now here is what you can buy from Temu:

The first image is that of a DJI drone. DJI is one of the leading manufacturers of drones in the world. As you can see, it is not cheap. Only professionals will buy a drone for $2,000.

The one in Temu? You can buy it for $17. It is a poor knockoff that will fly probably a few feet. There is a reason DJI drones are expensive. The company uses high-quality parts. They also use advanced technology that is not available to the public. 

Most products in Temu are like this. It is a place for cheap imitations. It is not bad if you ask me. After all, not all people can afford the good stuff in life. Since there is a demand, someone has to make the supply. 

Although Temu is not the manufacturer of these replicas, it is the link between buyers and manufacturers. Without Temu, the manufacturing plants would have a hard time distributing and selling their products. 

5. Cheap Labor Costs

The average annual salary in China, at the time of this writing, is $50,000 USD. That average includes the salary of financially affluent workers, of course. Here is the kicker: the average salary of a Chinese factory worker is $8,111 per year.

That salary translates to about $25 per day! No wonder the products are cheap. In the US, the salary of a fast-food worker is anywhere between $10 and $20 per hour, or about $80 a day.  

The whole world is dependent on the Chinese manufacturing industry. It is why many of us can afford the things we have—from phones to huge TVs—all these have parts that came from China.

6. Digital Operations

Temu is a digital-first company. What it means is that they do not operate physical locations. The products are not even in Temu warehouses—the products are with the sellers.

Amazon’s business model is different. Amazon primarily operates by storing products from sellers in their warehouses. If you place an order on Amazon, the product will come from an Amazon warehouse and ship from there. 

That is why Amazon is more expensive than Temu. Amazon spends billions a year to maintain not only its digital infrastructure but also its warehouse operations. 

Temu is like Etsy, if you think about it. On Etsy, sellers create an account and upload their products. Once a customer buys, Etsy takes a cut of the revenue. It is the seller who packs and ships the item to the customer, not Etsy. 

With this business model, Etsy does not have to pay a lot of employees to manage a warehouse. It has no warehouse at all. Temu is like this—they operate a website and nothing more.

7. Few Human Operators 

Temu has few human operators, as evidenced by their lack of human customer support. One would think that a big company like this would employ hundreds, if not thousands, of people to provide customer service, but they don’t. 

You cannot talk to a customer service agent. Instead, you will chat with a robot, or you must find answers to your questions from their FAQ page. 

Is it Safe to Buy in Temu?

Yes, it is safe to buy in Temu. It is just like any other marketplace, and it is the main competitor of AliExpress. If you use Temu a lot, you will begin to realize that most products on Temu are also found in AliExpress.

The primary concern of many people in the West about Temu is security. It is rather a political problem than the actual security of financial data. Many Westerners think that the Chinese Communist Party is using data from Temu to engage in political espionage. 

Is it true? Well, who knows?

As far as security goes, your financial information is not likely to get hacked. Temu, being a huge conglomerate of businesses, certainly takes precautions to protect consumer data.

The thing is that most products on Amazon are from Temu, AliExpress, and Alibaba.  If you go straight to Temu, then you get a good bargain. 

Now, here are some of the things you want to look at when buying from Temu:

• Fake products – many consumers say that Temu is filled with unbranded products. These products do not seem to have passed quality checks for international standards and can cause serious harm or injury to the users.
• Counterfeit – many suppliers in Temu offer counterfeit products. The challenge here is once these products get to customs, the government may block them, and your customers will nearly receive their items.
• Illegal products – you will find illegal products in Temu that have banned substances. Some of these products are food supplements that may have addictive components in them.

Given these challenges, my advice is to approach the situation with caution. For example, do not dropship counterfeit items. It does not matter if it is from Temu or not. A counterfeit is a counterfeit, and it is illegal.

If you see a purse that has a Louis Vuitton design, stay away from it. If you see a pair of shoes that have the Nike logo on it, skip it. Do not dropship food supplements, vitamins, etc. These items are too risky to sell. 

Should you decide to source your products from Temu, focus your attention on generic items, such as coffee mugs, faux jewelry, toys, etc. I would also recommend that you stay away from electrical and electronic items that are too cheap. These are fire hazards or accidents waiting to happen.   

If you need to learn more about electronics, please read our guide on how to dropship electronic products.

When browsing for Temu products, always think of two three things: customs policies, customer safety, and compliance with regulations. If a product puts you in doubt on any of these three things, walk away. 

As far as quality goes, you should know that you get what you pay for. There is a reason these products are cheap, and that reason is that they are poorly made. You cannot tell your customers that your items for sale are of poor quality, but the price must reflect it. 

The trick here is not to overprice your items. Consumers know that cheap products are of low quality. They will never complain if you did not charge them an arm and a leg for a product. 

Is Temu Ideal for Dropshippers?

Yes, Temu is very ideal for dropshippers, with a few caveats. Temu is where you can find products at an extreme bargain. 

Some would say that it does not make sense to use Temu for dropshipping because Temu is an aggressive advertiser. Why would you dropship their products if millions of people are already aware of Temu? 

1. Trust Issues 

Many people do not trust Temu. Temu’s offers sound too good to be true, so people are hesitant to make purchases. You, however, can take small risks here and there. Order products from Temu and find the suppliers you can trust. 

Once you have a list of products and suppliers you can work with, you can import these products to your store, and people will buy from you because they trust you. What they do not know is you are purchasing these items from Temu. 

2. Product Prices

Temu’s prices are unbelievably low. Because of this, you have the opportunity to make big profits. 

Here is an example of a product you can dropship from Temu: 

Now, here is something similar on Amazon:

See the difference in the price? You can buy the same thing from Temu for only $4.75, and then sell it on Amazon for $12.99, for a profit of $8.24.

3. Product Selection

Temu is trying to become the next AliExpress. We do not have data as to how many products are on the Temu platform right now, but it surely is keeping up with AliExpress. 

Here are the main product categories of Temu: 

• Automotive
• Sports 
• Jewelry
• Fashion and clothing
• Home and Kitchen
• Toys
• Hardware
• Beauty and health

There is so much more. Pretty much, I can say that the most common niches for dropshipping are also covered in Temu. You will have no issues looking for products that you can sell and make a profit from. 

Before choosing a product, you may want to read our guide on how to choose products with low competition. 

4. Consumer Protection

Temu offers a refund or return of up to 90 days. This is great, considering that shipping times can take a while sometimes. 

However, there is something about the fine print that you must know. You can only make one return for every order. 

Free return means you do not need to pay for the shipping of an item back to Temu. If your transaction has ten products in it, and you want a refund for two, you must pack those two items in one box and ship them back to Temu free of charge. 

Overall, my advice is to approach Temu with caution. Do not sell products from Temu unless you have tried them yourself. Yes, you must spend some money, but this is all worth it. The good news is that the products are so cheap that you can buy so many things for only a couple hundred dollars. 

Can You Integrate Temu with Shopify?

No, you cannot directly integrate Temu with Shopify. Temu offers no app for integration. There is a workaround for this, and what you need to do is use CJDropshipping. 

CJDropshipping is like AliExpress, but it is built for dropshippers. Anyone can purchase items from CJ, even if they are not dropshippers. 

The biggest advantage of CJDropshipping is its product sourcing support. Here is how it works:

• You see a product not available on the CJ platform
• You contact CJ and give them details about the product
• They will look for a supplier for it
• If successful, they will add the product to the CJ platform
• Then, you can import the product to your Shopify store

This is the way you can use Temu in conjunction with CJ. If there is a product on Temu not available on CJ, you can always file a request for product sourcing. 

Here is a screenshot of the product sourcing page: 

The button at the bottom is what you need to click to file a sourcing request. Then, you will have to fill out this page:

At the bottom of this page is another button that says REQUEST FOR SOURCING. Click on it and wait a few days. If the sourcing team successfully makes an arrangement with the supplier, you will get a notification. 

From here, you will see the product on the CJDropshipping product pages. All you need to do now is import the product to your Shopify store. 

Is this a safe thing to do? Yes, it is a safe thing to do. However, do not forget that CJDropshipping is merely a conduit between you and the manufacturer or supplier. It is not CJ that ships the items to your customers, and it is not CJ that manufactures your items. 

There are, however, products that CJ keeps in their warehouse. However, you will not know which products are theirs and which ones are not. You can only know where the products are stored. 

If you ask them to source a product from someone, then you are sure it is not CJ that manufacturers or supplies it. 

Is CJDropshipping a good choice as a product import tool? Yes, it is, especially if you do not mind that your products are coming from China. 

CJDropshipping is a Chinese company, and they have several warehouses in China. They also have warehouses in other countries. The beauty of it all is that you can choose products based on the warehouse location. 

These are the locations of their warehouses: 

Before you search for products, you can check one or several of these countries, and the CJ system will only show you products located in those warehouses. Because of this, you can create a dropshipping store targeted locally to each of these countries only.

The benefit of doing this is that you can ship items faster. No more waiting for over 30 days for shipping. You will have happy customers, although your market is also smaller. 

One last thing: Temu suppliers may operate their warehouses in China. In this case, CJ has no control over where these items will ship from.

Risks of Dropshipping with Temu

Whether you source your products from Temu AliExpress or anyone else, there are risks you have to face. These risks exist and you must try what you can to prevent them from happening. Sometimes, it cannot be helped, but you should still be ready to handle them.

1. Scammers

Although Temu sellers are not scammers, many cybercriminals use Temu’s name to scam people. You can be a likely victim, or target since you are a Temu user or buyer. 

Here are the two most common Temu scams:  

• Email scams – you will receive emails about your Temu account being accessed without authorization. Emails like that have a link that they tell you to click. Don’t. These links are scam links that can download malware to your device. 
• Fake gift cards – there is an influx of ads and offers about Temu, but these offers are not from Temu. They are from scammers looking for gullible Temu buyers looking for a massive discount. 

Most of the scams revolving around Temu involve impersonators. It does not happen on Temu only but on all online marketplaces. Temu, however, is a target right now because they are growing aggressively.  

2. Shipping Times

Temu offers between five and ten business days of shipping. This, of course, is their promise, but it does not happen all the time. 

The risk here is that your customer may be dissatisfied. There is nothing in the world that can compete with Amazon when it comes to shipping (if we are talking about US local deliveries). Amazon Prime is at the top when it comes to shipping speed. 

What you can do is to set proper expectations. A good approach is to underpromise but over-deliver. For example, tell the consumers that the shipping can take anywhere between seven to fifteen business days. 

Doing this gives you an allowance. If the shipment arrives within five business days, your buyer will be very happy because the order arrived earlier than expected. 

3. Product Quality

Most Temu products are cheap knockoffs. There is nothing you can do about that anymore, and there is no getting around it.

My suggestion is to order the product. Once you have it, you must honestly assess if what your customer will pay you is worth it. If not, then don’t sell the item. Instead, look for a new one. 

Although Temu houses so many low-quality products, it does not mean to say that they are not functional. It is only a matter of finding products that work and whose prices are commensurate to their quality. You need to have the skills on how to find dropshipping suppliers you can trust. 

5. Customer Service

Many people say that it is difficult to reach customer service. If they do reach an agent, they get answers that are irrelevant to their concern. 

One thing you can do to avoid this is to look for a supplier who performs well. Do this, and you will have no reason to look for a Temu customer service agent. That is why I strongly recommend that you buy the product first before you sell it at your dropshipping store. 

FAQ: Why is Temu so Cheap?

Why are Temu products cheap?

Temu products are cheap because of loss leader pricing and direct sourcing from manufacturers. 

Is Temu safe to buy from?

Yes, Temu is safe to buy from. Temu offers buyer protection.

What are the risks of Temu?

The biggest risk is poor product quality. There is also a risk of severely delayed shipping.