A seller revealed that he had been operating on Temu for nearly three months, and the supply price was very low. The highest monthly sales volume was more than 40,000 yuan, but the actual gross profit was less than 6,000 yuan.
It turned out that Temu was implementing a new round of price reduction strategy. If the seller does not agree to the price reduction, it will affect the store’s traffic and order volume. This is equivalent to requiring sellers to either reduce prices or exit the platform. According to the feedback from sellers, Temu has a professional team of buyers who understand the market conditions and compress profits to only 1-2 yuan per order or even lower. Some products are even lower than the purchase price, so sellers can only give up these products.
In order to keep prices as low as possible, Temu implemented a series of price verification rules. First, the seller’s supply price must be lower than the price of the same product on 1688, which restricts individual sellers from operating as non-source middlemen and raises the platform’s entry threshold. Secondly, Temu introduced a price competition mechanism. For multiple quotations for the same product, the platform only selects the lowest price. In addition, Temu has also launched a dynamic sales mechanism. Slow-selling products with sales below a certain level will be reduced in price or withdrawn from supply, and products with a score below 4.2 will be removed from the shelves. Faced with Temu’s strict low-price policy, many small and medium-sized sellers can’t bear the pressure and choose to withdraw from the platform. Regarding how to adapt to Temu’s price verification mechanism, some people have summarized the following methods.
The first is to quote a high price. According to the actual situation, make a reasonable judgment on the quotation, because Temu’s core mechanism is based on the lowest price. When a store puts new products on the shelves, Temu’s price verification technicians will verify the price by comparing the prices of the same products on 1688 and Pinduoduo.
The second method is to use different pictures. If the general 1688 main picture is used, the verification result will often be the lowest price, which is difficult to pass the verification. However, if the main picture is modified, such as adding a scene picture, the picture will not be identified as a low-priced product, so a more accurate verification price can be obtained. This can not only obtain a more reasonable verification price, but also the scene picture will have a higher click-through rate when displayed on the Temu platform. You can refer to the second tier price of 1688 and quote a little higher. Usually, most of these quotes can pass the price verification.
The third method is to change the category. When listing products, don’t just focus on buyers in one subcategory. Sometimes you will find that buyers in different subcategories need to buy the product. At this time, just choose the subcategory with the expected price.
The fourth method is more special. Some single products may have a very low price, but if they are combined and upgraded, the SKU will become unique, and the price verifier will not be able to compare prices and can only agree to the quotation. Of course, the result of the combination must be able to promote sales conversion, otherwise even if the price verification is high, the product may face the problem of return.
Temu has a special team of price verifiers and buyers, which limits the supply price to lower than the same product of 1688, and reduces the price or withdraws the supply of unsalable products of merchants. Sellers reported that Temu’s price reduction policy made them unbearable, which greatly affected the store traffic, and even some small and medium-sized sellers chose to withdraw from the platform due to pressure. In response to Temu’s low price policy, sellers proposed methods such as quoting high prices, modifying pictures, changing categories, and combining.