How Temu Keeps Prices Unbeatable: The Strategies Behind the $100 Coupon Savings

Kelly Nov 05 • 30 min read

If you've recently found yourself scrolling through Temu, marveling at the incredibly low prices across a dizzying range of products, you’re not alone.

Temu has quickly gained attention by offering products—from electronics to clothing to home goods—at prices that often seem too good to be true. How does Temu manage to keep its prices so low without sacrificing quality entirely? Here’s a look at the main strategies Temu employs to pass such significant savings onto its customers.

1. Temu’s Business Model: Leveraging Pinduoduo’s Resources

Temu’s low-cost offerings aren’t just a happy accident; they’re the result of a thoughtfully designed business model that benefits from the expertise and resources of its parent company, Pinduoduo. Pinduoduo, a Chinese e-commerce powerhouse, has revolutionized online shopping in China with its unique approach of connecting manufacturers directly with consumers, which removes costly intermediaries from the chain. By tapping into Pinduoduo’s extensive network and experience, Temu can replicate this model for the U.S. and global markets.

Direct Manufacturer Relationships

Temu operates directly with manufacturers in China, allowing it to cut out middlemen who typically add layers of markup to a product’s price. By bypassing these middlemen and establishing direct relationships with manufacturers, Temu can negotiate better pricing for its customers. This direct-sourcing approach also gives Temu more control over product quality and production schedules, ensuring they can offer competitive prices without sacrificing consistency.

Leveraging De Minimis Import Policies

A significant portion of Temu's cost-cutting strategy also lies in its use of the U.S. de minimis import policy. This policy allows imported goods valued under $800 to enter the United States without incurring customs duties, saving money on import taxes that often add to product prices. This tax-saving tactic is particularly effective for inexpensive items, allowing Temu to offer these goods at even lower prices.

Low-Priced, High-Volume Strategy

Temu’s primary objective is not to maximize profits on individual items but to drive high sales volumes. This approach aligns with its “low-price, high-volume” business model, which attracts a broad customer base and increases overall revenue through sheer transaction volume. By focusing on low prices to bring in a large number of customers, Temu is willing to operate on thin margins, believing that high volumes will eventually compensate for lower per-unit profits.

2. Low Manufacturing Costs: Benefiting from China’s Economy of Scale

China is known as the world’s manufacturing hub, and for good reason. Production costs in China are substantially lower than in Western countries, largely due to lower labor costs and highly efficient supply chains. Temu, sourcing most of its products from Chinese manufacturers, capitalizes on these lower manufacturing costs to provide its customers with affordable products.

Advantages of Economies of Scale

Temu partners with an extensive network of manufacturers in China, which enables it to place large-scale orders that further drive down production costs. When companies manufacture goods in large quantities, they benefit from economies of scale—a principle in which the cost per unit decreases as production volume increases. By placing bulk orders, Temu can obtain products at reduced rates, translating these savings to customers.

High Production Efficiency

Chinese manufacturers have streamlined their production processes over decades to maintain efficiency and reduce waste. Temu’s partner factories are typically equipped with state-of-the-art machinery and efficient workflows that minimize production costs. By taking advantage of these efficiencies, Temu can sell products at prices Western-based manufacturers would struggle to match.

3. Low Shipping Costs: Affordable, Economical Shipping Solutions

One of Temu’s biggest selling points is its commitment to offering free shipping on all orders, a significant perk for online shoppers. Shipping costs are a major expense for e-commerce platforms, and many sites pass these costs onto the customer. However, Temu has developed a strategy to keep its shipping costs low and continue to offer free shipping to its users.

Small Package Shipping

Temu frequently uses small package shipping for its orders, which is a more economical option than standard parcel delivery methods. By opting for this type of shipping, Temu significantly reduces its per-order shipping costs. Small package shipping is generally slower but cost-effective, helping Temu maintain its low-price promise without compromising on service availability.

Partnerships with Logistics Companies

Temu has also partnered with several logistics companies to optimize its shipping routes and consolidate packages, which helps reduce costs. By consolidating shipments, Temu can fill containers to their maximum capacity, reducing the number of trips required and the associated costs. These partnerships and strategies contribute to Temu’s ability to offer free shipping and keep overall prices down.

4. Discounts and Deals: Regular Promotions and Exclusive Offers

Another way Temu maintains low prices is by consistently offering attractive discounts and deals on its platform. Temu is known for its regular flash sales, “lightning deals,” and promotions that lower prices even further, especially for new customers.

Flash Sales and Lightning Deals

Temu frequently hosts flash sales and lightning deals on various product categories, such as electronics, fashion, and home essentials. These deals are typically available for limited times and can offer steep discounts that draw in new customers while keeping existing customers engaged. By creating urgency around these limited-time offers, Temu entices users to make quick purchasing decisions, which boosts sales and helps clear inventory.

New Customer Discounts

To attract first-time shoppers, Temu occasionally offers exclusive discounts, such as 30% off for new customers. Codes like “USNEW30” allow customers to save even more, creating an appealing entry point into the platform. Similarly, promo codes like “GROUPON30” or “aci384098” provide substantial discounts and free shipping, reinforcing Temu’s reputation as a budget-friendly shopping platform.

Strategic Seasonal Sales

Much like major retailers, Temu also capitalizes on seasonal sales and holiday promotions to offer deeper discounts. During peak shopping seasons, such as Black Friday and Cyber Monday, Temu rolls out competitive deals to draw in more customers. These seasonal promotions help keep prices low for consumers while Temu benefits from increased traffic and transaction volumes.

5. Knockoff Products: Affordable Alternatives to Brand-Name Goods

One of the more controversial aspects of Temu’s low pricing is its reliance on unbranded, knockoff products. While branded items often come with a higher price tag due to marketing, research, and development costs, unbranded products lack these additional expenses, making them more affordable. Many of Temu’s offerings are inspired by popular brand-name items but are produced by smaller, independent manufacturers in China at a fraction of the cost.

Cost Savings from Unbranded Manufacturers

Temu sources many products from smaller, unbranded manufacturers, which allows it to skip the markup associated with well-known brands. By not paying a premium for branding, Temu’s products are more affordable, though customers may experience some variation in quality compared to brand-name alternatives. While some items may mimic the design of high-end products, they are not necessarily made with the same materials or processes, leading to mixed reviews on product durability.

Intellectual Property Concerns

Using unbranded or knockoff products raises concerns around intellectual property (IP) rights, as some items resemble brand-name goods without explicit permission. Although knockoffs are not illegal as long as they don’t infringe on specific trademarks, they do allow Temu to offer lower-cost alternatives that mimic pricier, branded products. Customers need to consider that while these items are more affordable, they may not offer the same quality or durability as original brand-name goods.

Why Temu's Low Prices Make It an Attractive Choice

Temu’s unique combination of strategies—direct manufacturer relationships, low manufacturing and shipping costs, consistent deals and discounts, and knockoff products—creates a perfect formula for low prices. This approach attracts budget-conscious shoppers who want access to a wide range of products at unbeatable prices.

Shopping Tips: Maximizing Your Savings on Temu

For those interested in getting even better deals, here are a few tips:

Use Promo Codes: Make the most of available codes like “aci384098” for $100 off, or “GROUPON30” for an extra 30% off, especially if you’re a new user.
Shop Flash Sales: Regularly check Temu for flash sales and lightning deals, which often feature steep discounts.
Wait for Seasonal Promotions: Take advantage of holiday sales and major shopping events when Temu offers deeper discounts.
Be Aware of Quality Differences: Remember that knockoffs may not match branded products in durability. Read reviews and manage your expectations to avoid disappointment.

Final Thoughts

Temu has carved out a unique position in the e-commerce landscape by making affordability its core mission. While the quality of its products may sometimes be variable, the platform provides accessible, budget-friendly shopping options that appeal to a broad audience. Whether you’re shopping for trendy clothing, everyday essentials, or unique finds, Temu’s approach to low pricing makes it a compelling option for anyone looking to save.