Temu's Local Warehouses: Bypassing Tariffs with a Smarter Shipping Strategy

Temu, a Chinese-owned e-commerce site, has switched gears to show off more of its “local” warehoused products in the US. A recent move by the President did away with a useful loophole that helped the company dodge taxes and US customs. Temu is now emphasizing products from their own warehouses in the US. This comes after a 10% tariff was imposed on Chinese goods. The tariff also killed a rule called "de minimis. " This rule let the tech savvy shipping companies ship products under $800 to the US without paying duties. Before all this, Temu and companies like Shein grew popular by shipping directly from China with ultra-low prices like $5 sneakers. Now they have begun stocking up on goods in US warehouses reducing shipping times and cutting costs for them. This is a smart move by Temu. It was a loophole. Shipping goods to the US from China was way cheaper, but the government uncovered the loophole and implemented the tariffs So now, Temu can boast about their fast shipping, which is critical for online shopping. By pushing its own US warehouse stock more than overseas direct shipping, Temu’s aim is to lower its prices. It also helps bypass costly customs fees. Though the products in the US warehouses are labeled “local, ” most are still sold by Chinese-based businesses. This doesn’t change their origins but helps with shipping times. Temu isn’t completely done with overseas shipping. Temu isn’t staying quiet on the matter. It’s even found new US sellers to do business with, and even opened new warehouses. With these new warehouses, Temu is working to reduce the use of backdoor shipping. They protect customers and get things faster. So, even though goods are labeled “local, ” and they come from the U. S. , many of them are actually coming from China. Many retailers like Amazon and Walmart have already noticed the competition. They are always watching to stay ahead. Amazon even started its own storefront for cheaper items. Other retailers may still be catching up to the tech savvy strategy of Temu and Shein. It’s hard to compete with friendly prices. Temu and Shein are also trying to decrease their shipping costs and time. They are purchasing US sellers and distribution centers in Chicago. Not only Temu, but Shein is also taking action. They have started stocking up on their own inventory. Then again, the US postal service announced a temporary ban on shipping packages from China, just for a day. This strategy by Temu and Shein is a smarter way to rethink their business model. It protects them from even more taxes in the future. Many people didn’t know, but The Congressional Research Service stated that Temu’s exports went up to 66 billion by 2023