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Originally Posted On: https://globegazette.com/brandavestudios/temu-redefines-what-normal-price-is-through-next-gen-manufacturing/article_69484b2e-a994-5c5d-969b-1a3ad4f7cec0.html

Online platform Temu′s prices are so low that some shoppers have doubts about whether they are too good to be true. But people who have tried the e-commerce app say that the app works and is totally legit. Its amazing price is due to the leading supply chain technology, which Temu calls Next-Gen Manufacturing.

“The price scares people at first, of course you think it’s a scam, but once you know someone who’s using Temu and getting all these bargains, everyone is hooked,” said YouTuber One Cute Couponer Erica Miller in a sponsored video by Temu on her channel.

In a world where low prices often raise eyebrows, it is perhaps understandable why some consumers may be skeptical about bargains. However, new evidence suggests that the prices consumers pay now are, in fact, inflated due to inefficiencies and waste in the manufacturing process.

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What is Temu?

Temu, an online platform known for its wide selection of quality merchandise sold at near-wholesale prices, is pioneering a revolutionary Next-Gen Manufacturing business model that aims to change the perspective on pricing and quality by stripping away unnecessary costs and passing the savings onto consumers.

Temu was started in September 2022. The platform offers merchandise in 29 primary categories and is available in the U.S., Canada, Australia and New Zealand.

What does Temu mean?

Temu means “Team Up, Price Down.” The company’s name reflects its mission to deliver cost savings through achieving economies of scale (“teaming up”). With a vast network of suppliers and fulfillment partners and a fast-growing pool of buyers, Temu is able to leverage the scale to secure better deals for consumers and deliver more sales for vendors, achieving a win-win.

Breaking the price-quality myth

At the core of Temu’s Next-Gen Manufacturing is its capacity to help manufacturers streamline production, minimize waste at every stage of the manufacturing process, and optimize both pre-production (design stage) and post-production (logistics fulfillment stage) operations. By utilizing real-time insight sharing, Temu assists suppliers in significantly reducing production costs (up to 50% compared with conventional methods) while enhancing product quality. In this instance, the seemingly too-good-to-be-true prices are, in fact, a reality.

In a recent interview with Insider, Michael Felice, an associate partner at management consulting firm Kearney, said that Temu is revealing a previously unexplored area in the market where brands produce items at extremely low costs, but the value chain accumulates significant incremental expenses. This is because most manufacturers go through numerous layers of middlemen, each taking a share of the profits, resulting in higher final prices for consumers.

“Temu is exposing a white space in the market wherein brands have been producing at extreme low cost — but along the value chain, there’s so much incremental cost,” Felice told Insider.

Redefining what is “normal” price

It is time for consumers to reevaluate their understanding of what constitutes a “normal” price. The prices people are accustomed to paying are often inflated due to outdated production methods, inefficiencies and waste. Temu’s groundbreaking approach to manufacturing demonstrates that these added costs are not an inevitable part of the production process. Instead, they represent an opportunity for improvement and a more sustainable future.

The idea that low prices must mean inferior quality is deeply ingrained in the consumer mindset. However, Temu’s success in providing top-notch products at significantly lower prices proves that this assumption is no longer valid. By challenging this misconception, it is possible to begin reshaping expectations and embracing the benefits of more efficient, cost-effective manufacturing processes.

Does Temu sell counterfeit products?

No, Temu does not sell counterfeit products or knockoffs. The company maintains a strict vetting process for all third-party sellers, ensuring that they adhere to quality standards. Sellers who violate Temu’s policies, which include selling counterfeit items, can be permanently banned from the platform. Temu is dedicated to ethical, humane and lawful business practices and requires merchants to comply with its code of conduct and all applicable laws.

How does Temu set itself apart from competitors?

Temu differentiates itself from other e-commerce platforms by adopting the Next-Gen Manufacturing model. This strategy allows Temu to provide substantially lower prices while guaranteeing an improved product fit and sustaining quality.

A notable distinction between Temu and its rivals is its firm stance against dropshipping. Dropshipping, a practice commonly associated with subpar customer service, excessive pricing, lengthy shipping durations, and complicated after-sales return and refund processes, is forbidden on the Temu platform. By prohibiting dropshipping, Temu ensures an enhanced customer experience for its users.

Explore the five main areas where Next-Gen Manufacturing reduces costs:

1. Enhanced consumer understanding for better product fit (>10% cost savings)

Temu provides manufacturers and merchants with free access to valuable real-time consumer preferences and shopping behavior insights, eliminating the need for expensive point-in-time market research that is often outdated in a fast-changing consumer market.

2. Accurate sales predictions reduce wasteful production (>5% cost savings)

By sharing consumer insights, Temu allows merchants to predict sales volume more accurately, streamlining production, reducing waste and improving time-to-market.

3. Efficient inventory management (>10% cost savings)

Improved sales predictions reduce inventory risk for retailers and manufacturers, minimizing overproduction, warehousing costs and environmental waste.

4. Reduced marketing expenses (>20% cost savings)

With supply more accurately meeting demand, less marketing is required, passing additional savings to consumers.

5. Nimble logistics and faster delivery (>5% cost savings)

NGM optimizes distribution, with products shipped directly from factories to sorting facilities and then to consumers, reducing warehousing needs and ensuring efficient delivery through third-party logistics partnerships.

As Temu’s Next-Gen Manufacturing continues to make waves in the industry, it is vital for consumers to reevaluate their preconceived notions about price and quality. By understanding that the prices they have been paying all along are unnecessarily inflated due to waste and inefficiencies, they can embrace the new normal that Temu represents. It is time to leave behind outdated beliefs and welcome the future of manufacturing, where high quality and low prices are no longer mutually exclusive.