Temu Keeps An Iron Grip on Suppliers, Exposing Itself to U.S. Ban Threat

As U.S. lawmakers step up efforts to penalize Chinese-owned bargain retail site Temu over the alleged sale of goods made with forced labor on its site, the company is holding fast to its longstanding response: It is a marketplace for independent sellers, just like Amazon and Etsy, and shouldn’t be held responsible for what those merchants sell.

But according to five suppliers to Temu, the reality is very different. Most of the goods sold on Temu are made by small factories in China whose operations are micromanaged by Temu staffers, which tell the factory owners not only what to make but how to price the goods, according to the suppliers, a review of their seller agreements and screenshots of Temu’s supplier system. Temu also handles the marketing and shipping for sellers. By exercising such ironclad control over goods sold on its platform, two-year old Temu has managed to squeeze prices to rock bottom levels, turning itself into a hugely popular retail site for Americans looking for cheap clothing, jewelry and household gadgets.