Selling on Amazon FBA vs Temu

For ecommerce sellers, the choice between established giants like Amazon FBA (Fulfillment by Amazon) and rising stars like Temu can be a strategic one.

Both platforms offer opportunities to reach a wide audience, but they cater to different business models and customer preferences. Amazon hit nearly 575 billion U.S. dollars in net sales revenue worldwide in 2023, while Temu has reportedly garnered over 70 million people in its short two years of operation in the United States.

Customer Base and Brand Awareness

With a massive customer base exceeding 350 million users globally, Amazon offers unparalleled brand recognition and established trust, translating into potentially higher sales volume, but also increased competition.

A relative newcomer, Temu boasts a rapidly growing user base, particularly among cost-conscious shoppers. While brand awareness is lower, the platform offers an opportunity to capture a new and engaged audience segment.

Product Selection and Pricing

Amazon accommodates a vast array of products across diverse categories. However, competition can be fierce, leading to price wars and potentially lower profit margins.

Temu primarily focuses on directly sourced products from manufacturers, often at lower costs. This allows for competitive pricing strategies, but the platform currently leans towards trendier, fast-fashion items and everyday essentials.

Fulfillment and Shipping

The FBA program streamlines order fulfillment, warehousing, and shipping through Amazon’s vast network.

This frees sellers to focus on product sourcing and marketing, but comes at a cost in the form of FBA fees.

Temu currently handles fulfillment in-house, offering free shipping with longer delivery times (typically 7–15 days) compared to Amazon’s Prime two-day service. Sellers manage their own inventory and shipping logistics.

Fees and Costs

Amazon’s fee structure can be complex, with per-item closing fees, fulfillment fees based on product size and weight, and additional storage fees.

It’s crucial to factor in these costs when determining profitability.

Temu’s fee structure is generally simple, with a single commission rate per sale. However, sellers are responsible for managing inventory and potentially higher upfront costs for bulk purchases directly from manufacturers.

Marketing and Advertising

Amazon offers a robust advertising platform with various tools to target specific audiences and boost product visibility.

However, competition for ad space can be intense, pushing up advertising costs.

As a newer platform, Temu’s advertising options are still evolving. While opportunities exist, sellers may need to rely more on organic search optimization and social media marketing to drive traffic.

Suitability for Your Business

The ideal platform ultimately depends on your business goals and product offerings.

Choose Amazon If:

You have established brands, a diverse product range, and prioritize fast fulfillment. You’re comfortable with a complex fee structure and managing a competitive landscape.

Choose Temu if:

You specialize in competitively priced, trend-driven products, or source directly from manufacturers.

You’re comfortable managing your own inventory and shipping, and are willing to invest in building brand awareness on a growing platform.

Both Amazon FBA and Temu offer exciting possibilities for ecommerce sellers. By carefully evaluating your business needs, target audience, and product fit, you can make an informed decision that maximizes your sales potential.

Consider a multi-platform approach if your resources allow, to leverage the strengths of each platform and reach a wider customer base.