[ BDSN ] 🤺 Is this the Amazon slayer or seller bankrupter?

Today to Sunday in Austin: BDSS Market Masters Think Tank
50+ of the world’s smartest sellers at the Gatsby Mansion

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🏷️ TEMU: A NEW FRONTIER for GROWTH

For Amazon sellers looking to diversify and explore new growth opportunities, Temu—a rapidly emerging U.S.-focused marketplace owned by PDD Holdings—offers a compelling platform.

Launched in 2022, Temu has grown at an explosive rate, leveraging aggressive marketing strategies and a robust financial backing that allows it to prioritize market share over immediate profitability.

Temu’s Explosive Growth and Strategic Positioning

Since its launch, Temu has quickly amassed nearly 700 million monthly visitors, thanks in large part to PDD Holdings’ $38 billion of cash reserves. This financial clout allows Temu to operate with a lean structure, relying on third-party vendors and maintaining a 34% operating margin.

Temu’s aggressive growth strategy is focused on capturing market share, with little concern for short-term profitability. This approach positions Temu as a formidable challenger to Amazon’s dominance in the e-commerce space.

PDD Holdings' decision to forego dividends and stock buybacks in favor of reinvesting in Temu’s expansion underscores its commitment to long-term growth. The company has shown it can sustain losses and invest heavily in marketing to build a strong foothold in the market.

Despite operating at a loss and losing approximately $30 per order, Temu’s strategy has proven effective in scaling its user base and market presence rapidly.

Opportunities and Perks for U.S. Sellers

For U.S. sellers, Temu represents a golden opportunity to tap into a fast-growing marketplace with substantial support from the platform itself. Temu started actively recruiting U.S. sellers in May and has since rolled out an exclusive invite-only program that offers a suite of benefits for established brands.

They are also hosting an invite-only party on September 17 outside Amazon Accelerate’s big event next week (reply to this email for invite).

Key Perks for Sellers:

• Zero Commission: For the first 1-2 years, Temu offers zero commission on sales, allowing sellers to keep more of their revenue and invest back into their business.

• Negotiable Pricing Model: Temu helps you determine a selling price, then offers to pay you a flat rate per sale rather take a standard commission % for each order like Amazon and others do.

• Marketing Support: Temu provides extensive marketing support, including funding for Google Ads, TikTok videos, Instagram campaigns, and more for top-performing products.

• Flexible Fulfillment Options: Sellers on Temu have the flexibility to fulfill orders themselves, use their preferred third-party logistics providers, or even utilize Temu competitors’ fulfillment services. Temu’s planned fulfillment centers near U.S. borders will further streamline logistics, making it easier and more cost-effective.

• Fast Payouts: Temu pays out earnings just eight days after delivery, helping sellers have a steady cash flow.

• Brands Work Best: Differentiated brands, and not “Alibaba sourced products with logos on them” work best say Temu reps.

Success Stories and High-Value Sales

Temu is trying to shake off the perception it only caters to bargain hunters. High-value items are performing exceptionally well on the platform.

A notable example involves a seller who generates $45 million in sales on Amazon and has now expanded to Temu. Specializing in bed-related items, this seller is generating approximately $1 million in monthly sales on Temu with some items priced as high as $500.

Exclusive Access and Rigorous Onboarding

Access to Temu is invite-only right now for US based sellers.. The onboarding process is strict, taking from one week to a month to complete, and requires comprehensive documentation to ensure sellers are thoroughly vetted. If you are doing 7-figures and have a brand, reply to this email if you want an intro.

Leveraging TikTok and Social Media

One of Temu’s most significant partnerships is with TikTok. Temu's willingness to cover the costs of TikTok advertising for high-performing products gives sellers an added advantage in reaching potential customers.

Temu's aggressive marketing efforts are not limited to TikTok. The platform recently launched over 8,000 Meta campaigns in a week, indicating a relentless focus on digital advertising to maintain its app ranking and visibility.

De Minimis Loophole: A Double-Edged Sword

Temu’s rapid growth is also fueled by its exploitation of the de minimis rule. The rule, part of Section 321 of the Tariff Act of 1930, allows goods valued at $800 or less to enter the US duty-free. This threshold was raised from $200 in 2016.

This loophole enables Temu to ship products directly from Chinese manufacturers to U.S. consumers without incurring import duties, giving it a significant price advantage. However, this strategy is not without risks, as increased regulatory scrutiny could challenge this business model in the future.

Temu is exploiting the loophole to build an audience, then hopes to expand by bringing in more “legitimate” US based brands after establishing a marketplace foothold.

Challenges and Market Dynamics

Despite its impressive growth, Temu faces challenges. PDD Holdings’ stock recently took a hit due to disappointing sales and heightened government scrutiny. After rapid growth, Temu’s app downloads have plateaued, suggesting sustaining momentum will require continued innovation and investment.

Competitive Impact on Amazon Sellers

While Temu is not yet an “Amazon slayer,” its impact on the market is undeniable. Temu’s ultra-low prices and aggressive marketing put pressure on Amazon sellers to lower their prices and differentiate their offerings.

Amazon is also creating its own “China-to-customer direct” program to compete, which will likely bankrupt some Western sellers when their factories start to sell direct on Amazon for prices lower than they can source for.

With significant customer overlap—36% of Temu buyers also shop on Amazon—you must carefully consider their pricing and marketing strategies to remain competitive.

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How to create A+ designs in under 3 minutes

🔎 CREATE AI IMAGES with ACCURATE TEXT

The problem with most AI image generation tools is the text is often squarely. Ideogram fixes that problem.

Watch the tutorial below or follow the instructions under the video:

• Go to Ideogram’s website and sign up.

• Create your prompt containing long text in inverted commas and select the aspect ratio, model, and color palette of your choice.

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Demystifying the latest Amazon
store growth hack: Affiliate Marketing

From TikTok influencers to major publications like CNN, Wirecutter, and BuzzFeed, creators have become game-changers for Amazon sellers. Partnering with the right creators in an affiliate marketing capacity can unlock higher visibility, drive sales, and grow your brand.

How can affiliate marketing be your secret weapon for your Amazon store growth in Q4?

• Unlock a new marketing channel and take full control of acquisition costs with cost-per-sale or cost-per-click models.

• Drive high-intent external traffic to your Amazon store by partnering directly with affiliates, influencers, publishers, and media buyers.

• Boost your organic search rankings as Amazon rewards external traffic with higher rankings and a bonus for driving sales from non-Amazon channels.

Think affiliates are just influencers? 

There’s so much more to the story. Dive into our cheat sheet for the full picture:

1. Content & Review Sites: Traditional publishers and creators write unbiased reviews, guides, and product comparisons. They rely on their reputation, search rankings, and social media to build trust and drive traffic and sales.

2. Influencers: Individuals or groups who promote products by sharing personal experiences, using their social media followings to generate strong results.

3. Media Buyer: Sites that curate top product selections and use paid search to rank highly and deliver strong sales. They may request higher commission rates due to bidding on keywords.

4. Deal, Coupon & Loyalty and Rewards: These platforms help shoppers find deals, rewards, and coupons, encouraging repeat purchases by reducing financial risk on first-time buys.

5. Affiliate Network & Commerce Tools: Platforms used by publishers to access affiliate networks, including Levanta, alongside additional tools to maximize sales.

Discover Levanta, the affiliate marketing platform designed specifically for Amazon sellers.

With over 6,000 creators in our growing network, Levanta makes it easy to manage, scale, and optimize your affiliate program—all in one place.

👉 Book a call with Levanta TODAY 👈

🚀  CREATE VIDEOS from your AMAZON LISTING fast

Creatify lets you quickly create high-performing marketing videos from any product link, including your Amazon or Shopify listings.

You can transform your product URLs into captivating video ads in minutes with Creatify's AI URL to video ad maker leveraging advanced AI to automate the video production process for social media advertising effortlessly.

🎉 SEATTLE NEXT WEEK? YOU'RE INVITED  ...

If you’re selling 7 figures or more in e-commerce and will be in Seattle for Amazon's Accelerate conference next week, you are invited to join me for dinner and networking on September 17 at Rider, one of Seattle's best restaurants.

Connect with 200+ fellow high-level sellers in an intimate setting, away from the conference bustle.

Take this opportunity to secure a seat and …

• Listen to Kevin and others share some tactics and insights

• Tap into minds that have generated millions.

• Uncover hidden opportunities in your niche. Imagine spotting trends before they explode, or learning how to turn a $10K month into a $100K month

• That inventory issue that's been keeping you up at night? Someone at your table has solved it. Your PPC woes? Consider them history

• Build a network of seasoned advisors who've been in your shoes

• Every person in attendance has fought battles, won wars, and reshaped the Amazon landscape
  

You'll leave with strategies you can't Google and connections you can't make elsewhere.

Remember, this is for 7-figure+ sellers only. 

Join us in Seattle for a dinner

✌🏼 Have a great weekend.

See you in Seattle.

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