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Why is Temu So Cheap? We Did a Deep Dive to Find Out Just How Cheap It Is

by Kara Byers

Temu keeps its prices super low in a number of ways, including:

  • Connecting customers directly with suppliers
  • Leaning on a legal loophole to ship goods directly to US customers tax-free
  • Utilizing micro-supply chains 
  • Operating at a loss

Having shopped on the store extensively, we kept noticing it consistently undercuts competitors like Amazon, Walmart and Shein on near-identical products. 

In fact, in our experience, Temu’s prices are—on average—over 50% cheaper.

Read on to see our side-by-side price comparison and to find out how, exactly, Temu is really able to sell stuff so cheaply. 

Temu’s Prices vs Competitors

To give you a clearer picture, we’ve compared prices for near-identical products across Temu, Amazon, eBay, AliExpress and Walmart.

Stanley Tumbler Dupe: Temu’s Price 27-185% Cheaper

Viral sensation and star of WaterTok, the Stanley Tumbler has become a must-have, but at $45 for the 40 oz, it’s expensive.

Enter, the Stanley Cup dupe, which is between 27% and 185% cheaper on Temu than it is on Shein, Amazon and eBay.

Temu is 185% cheaper than eBay for a Stanley Tumbler dupe.

Lenovo Thinkplus LP40 TWS Wireless Earphone: Temu’s Price 114-228% Cheaper

One of Temu’s points of difference is that it sells name-brand electronics from Lenovo, HP and Kodak. As over-ear headphones are trending now, we wanted to see how competitive Temu’s prices could be on a branded pair.

Answer: very competitive, shockingly so. In fact, Temu was 114% to 228% cheaper than Walmart and AliExpress.

Lenovo headphones are 228% cheaper on Temu than on AliExpress.

LED Studio Streaming Lights: Temu’s Price 61-405% Cheaper

While these may seem like a niche item, we’ve included these lights because we bought them from Temu to use when we photograph our shopping hauls and it offered the best price and free shipping.

We opted for two lights and a 5′ 2″ (160cm) stand, Temu was 61% to 405% cheaper compared to Amazon and eBay.

These studio lights are 400% more expensive on eBay than on Temu.

Portable Photo Studio Light Box: Temu’s Price 19-47% Cheaper

We’ve included this not particularly every day item because we bought it from Temu to use when we photograph products we buy and it offered the best price and free shipping.

We bought the 16”x16” (40cmx40cm), it was 19% to 47% cheaper on Temu than it was on Amazon and AliExpress.

The price for this lightbox on Temu is 47% cheaper than it is on AliExpress.

Dress With Pockets: Temu’s Price 52-91% Cheaper

We didn’t buy this item, but we spotted on several shopping sites at much-different prices. Temu’s pricing was 52% to 91% cheaper than Amazon and Walmart.

This dress is priced nearly 50% less on Temu than at Walmart.

How Temu Keeps Its Prices Low: A Breakdown

Three major news outlets—TIME, Reuters and Wired—have analyzed Temu and spoken with company insiders to uncover how Temu keeps its prices so low, they found it does so by:

1. Cutting Out the Middleman

Temu claims it can offer low prices by eliminating middlemen and sourcing products directly from manufacturers.

While these suppliers provide the goods and their details, Temu handles everything else—from customs processing to international shipping.

TIME reports that this approach is similar to how Temu’s sister company, Chinese e-commerce behemoth Pinduoduo, operates. 

When it asked Temu for an official comment on how it keeps product costs so low, a rep told the publication it was the result of a “deep network of merchants, logistic partners and [Pinduoduo’s] established ecosystem built over the years.”

We asked Temu customer service ourselves and were told, “Temu’s item prices are determined by a variety of factors, including supplier costs, market demand, and prevailing market prices. To stay competitive, we regularly adjust our prices in response to market fluctuations. We also offer periodic promotions and discounts to ensure our customers get the best deals.”

2. Exploiting an Import Loophole 

As reported by Reuters, Temu’s low prices strategy often involves using the de minimis rule—a loophole that allows products valued at $800 or less to be imported to the US tax-free. 

Although this exemption is open to all retailers, it’s most heavily used by Temu and Shein, as per a report published by a House of Representatives committee that estimates both likely account for more than 30% of all de minimis shipments into the US.

According to Wired, advocates from small business lobbies are pushing to reduce the “de minimis” threshold to $10. Should this occur, it’s anticipated that Temu’s expenses would increase.

3. Utilizing Micro Supply Chains 

Wired’s investigation found that Temu can offer on-trend items to consumers quickly and at reduced prices by leaning on China’s manufacturing clusters.

These clusters are self-sustained micro supply chains that specialize in swift product design, sourcing and manufacturing, which enables companies like Temu to quickly stock cut-price versions of sought-after items. 

4. Operating at a Loss

According to Wired’s analysis Temu loses an average of $30 per order.

Or, as per financial company China Merchants Securities, a loss of $588 million to $954 million per year.

Wired found that most of this loss comes from three things: 

  1. Offering free international shipping—mailing an order to the US costs Temu around $14 and, even after sharing costs with its shipping partners, it still has to pay approximately $9 or $10 per shipment.
  2. Subsidizing prices on its stock—“That is how Pinduoduo gained market share in China, they know how to use these strategies really well,” Veronica Si, a researcher specializing in ecommerce platforms, told Wired.
  3. Squeezing small Chinese manufacturers—and pressuring them to cut prices to levels that make it almost impossible for them to turn a profit.

More to Know 

Temu’s Price Adjustment

Temu’s prices are already competitive, but they can drop even further. 

If you buy an item and its price is reduced within 30 days, Temu refunds the difference. This policy only applies if the exact same item—in size, color and sold by the same shop—sees a price drop within those 30 days.

You don’t need to manually track these price changes; Temu does that for you. We didn’t qualify for a price adjustment on our hauls, but several TikTok users have mentioned this feature.

To see if you qualify:

  • Navigate to the “Your Orders” section on Temu.
  • Select an order.
  • If you’re eligible, you should see a “Request a price adjustment” option at the top of the page. Click on it to proceed.

Worried about buying from Temu and needing to return? Here’s everything you need to know about Temu returns.

All prices are correct at time of publish.