Temu’s US Seller Program is a DTC option

Direct-to-consumer brands eager to find customers have an opportunity with Temu, China’s fast-growing discount marketplace.

In February 2024, Temu launched a US Seller Programthat effectively opens the platform to American companies. The program gives American brands access to an estimated 185 million domestic and international shoppers each month – and growing.

In 2023, Temu became Apple’s most downloaded free application and dominated the iOS and Android app stores in 2024.

US Seller Program

Temu, like its sister site Pinduoduo, operates primarily on a consignment model.

Chinese and East Asian manufacturers fill Temu’s warehouse with goods and create product lists for the marketplace. Once sold, the item is shipped directly from the Temu facility in a familiar bright orange bag using smart airfreight strategies to keep costs down.

The company recently changed tactics to allow US merchants to list products and optional use Temu’s warehouse and fulfillment system.

The program is free for small sellers, but a company requires a subscription of between 2% and 5% of the selling price. At the time of writing, the marketplace also charged a payment processing fee of 2.9% + $0.30 per transaction. transaction and sellers paid all shipping costs. Overall, the fees make Temu look like other marketplaces.

DTC option

Temu’s low prices may not sit well with traditional retailers, but DTC brands could have an opportunity.

A DTC product is unique. Similar products may exist in Temu, but none are identical. Plus, American-made products can have a competitive advantage due to perceived value and quality.

Overall, I see five potential benefits for DTC brands selling on Temu.

Fire building

DTC brands on Temu can introduce customers to the business and build relationships.

The introduction happens when a Temu buyer finds the brand’s products. The relationship starts with order fulfillment. DTC sellers could include a physical product catalog in the packaging, a coupon for a free item, or a note detailing the brand’s history.

Items that require a warranty registration provide the option to collect the buyer’s email address and phone.

Revenues

Any established sales channel is a revenue opportunity. Temu has a massive user base, and those shoppers, discount-minded as they are, are the opportunity.

Temu’s media agency told me the company does not share estimated or average seller revenue. DTC stores should test, optimize and iterate on the platform.

Marketing

DTC brands that list products on Temu can participate in platform-wide promotions and flash sales, driving traffic to listings and thus more interactions

Chinese expansion

DTC brands can flip the script and offer products to Chinese buyers via inventory stored in Hong Kong or other Temu locations.

Product development

The absence of a Temu listing fee facilitates testing of new items. DTC brands can make short runs of prototype products, offer them on Temu and learn what appeals to customers.

Marketplaces in general

Sales on Temu should be part of an overall market strategy for DTC brands.

A brand that sells on one marketplace may consider others. Therefore, listing on Amazon, Temu, Walmart, Esty and eBay can all be part of an overall marketplace approach, such as:

• Set marketplace-specific goals. Define revenue goals, customer acquisition rates, or brand awareness metrics for each marketplace.

• Establish marketplace audiences. Use analytics to learn customer demographics and buying behavior based on marketplaces. A Temu shopper is likely to differ from one at Amazon or Walmart.

• Adapt the products to the marketplace. A brand can have several versions of similar items. Maybe the highest quality items are on Amazon and the entry level items are on Temu. Returns and seconds could be sold on eBay.

• Optimize product listings. Common optimization tactics across all marketplaces include quality images, keyword-rich descriptions, and competitive pricing. But remember platform-specific practices, conventions and rules.