Amazon vs Temu: Where Should Small Retailers Sell?
In 2025, small retailers must align their business type, pricing strategy, and brand goals with the right marketplace. Amazon still leads global e-commerce with over 310 million active users, strong trust, and premium pricing potential. Temu has exploded to more than 416 million users, driven by direct sourcing and aggressive low-cost positioning. The best choice depends on whether your business values brand control and trust (Amazon) or speed and affordability (Temu).
- Amazon = premium + structure: Best for branded or higher-margin products ($25+). Offers robust logistics via FBA but charges higher referral (8–15%) and fulfillment fees.
- Temu = affordability + growth: Ideal for fast-moving, low-cost SKUs ($1–$20). No monthly fee but tighter margins due to self-fulfillment and shipping costs.
- Acceptance & setup: Amazon requires stricter documentation and performance metrics. Temu is easier to join but mandates U.S.-based inventory after ending direct China shipments in 2025.
- Brand & customer control: Amazon provides limited branding through A+ content; Temu standardizes listings and minimizes seller visibility.
- Best 2025 strategy: Use Amazon for premium credibility and Temu for volume. Combine both with a Shopify site to build brand ownership and customer loyalty.
For small online retailers, choosing the right marketplace can define growth and profitability. Amazon continues to lead global e-commerce with vast reach and established trust, while Temu has emerged as a fast-moving, low-cost competitor built on direct sourcing and aggressive pricing. Each platform offers unique advantages, and this guide breaks down their key differences to help you find the best fit for your business.
Understanding Your Business Type First
Before comparing platforms, identify where your business fits. Manufacturers and producers create products in-house, including handmade goods, small-batch items, or private-label lines. Resellers and retailers purchase wholesale inventory and resell it for profit, often focusing on pricing and turnover. High-volume wholesalers manage bulk inventory and large-scale distribution operations aimed at consistent supply. Brand builders emphasize brand identity, customer loyalty, and premium positioning through direct relationships and marketing control.
Your business type directly influences which platform best supports your goals. Both platforms have refined their models in 2025 to serve different needs, adding tools for scalability, marketing, and supply-chain integration.
Market Size & Customer Base
Amazon continues to dominate e-commerce with over 310 million active users worldwide and a strong foothold in North America. Its customers value fast shipping, reliable service, and easy returns, factors that reinforce trust and justify slightly higher prices. The platform caters to a wide range of products but performs best in categories where quality and dependability matter most.
Temu, meanwhile, has surged to 416.5 million monthly active users in Q2 2025, marking a 68% year-over-year increase. Growth has been particularly strong in Europe and Latin America, though U.S. activity dipped slightly during the same period according to Jing Daily. The platform attracts price-sensitive shoppers who prioritize low costs over delivery speed, making it ideal for budget-friendly items typically priced under $50.
The key distinction: Amazon commands established trust and higher-spending buyers, while Temu captures a fast-growing audience focused on affordability and deals.
Can You Even Get Accepted?
Getting accepted to Amazon is moderately challenging. You’ll need a valid business registration or individual tax ID, a verified bank account, and a Professional plan at $39.99 per month for high-volume sellers. Approval is required for restricted categories such as groceries and jewelry, and some listings may need brand registry or invoices for proof of authenticity. Amazon also enforces strict performance standards, poor ratings or policy violations can result in suspension. Most legitimate sellers can join, but maintaining compliance demands consistent service and fulfillment quality.
Temu has low to moderate entry requirements for U.S. sellers. As of late 2024, applicants must have a registered U.S. business (LLC, Corporation, or Sole Proprietor), a U.S. business address, government-issued ID, U.S. business bank account, and proof of U.S.-based inventory. Sellers must also fulfill orders within seven business days.
Importantly, Temu ended direct-to-consumer shipping from China in 2025 amid tightening U.S. tariff policies, making local warehousing mandatory. Its streamlined onboarding now accommodates both new entrepreneurs and established businesses with domestic fulfillment capability.
Amazon offers structured but stricter oversight, while Temu provides easier access for U.S.-based sellers, if they can meet domestic inventory and shipping requirements.
Fee Structures: The Real Cost Breakdown
Amazon’s Fee Structure
Amazon offers two selling plans. The Individual Plan costs $0.99 per item sold for those moving fewer than 40 items monthly, while the Professional Plan charges a flat $39.99 per month for higher-volume sellers.
Referral fees range between 8% and 15% for most product categories, though certain specialized categories can reach up to 45%. These fees apply to the total sale price, including shipping, with a $0.30 minimum per sale.
Sellers using Fulfillment by Amazon (FBA) incur additional costs. Fulfillment fees for standard-size items typically range from $2.33 to $3.10 per unit depending on weight and size. Storage fees are $0.78 per cubic foot from January through September, rising to $2.40 per cubic foot during October through December. Long-term storage fees apply to inventory held for over 365 days.
For example, selling a $30 book through FBA would incur a 15% referral fee ($4.50), an FBA fulfillment fee (~$3.00), and about $1.50 in storage, totaling roughly $9.00, or 30% of the sale price.
Temu’s Fee Structure
Temu’s costs are comparatively lower. The platform does not charge subscription or listing fees for U.S. merchants, according to Shopify’s official guide on selling with Temu.
Commission rates generally range from 5% to 20% per sale, depending on product category. U.S. sellers must handle self-fulfillment, while warehouse fulfillment is invitation-only. Sellers are responsible for shipping costs, which can meaningfully reduce margins when combined with Temu’s competitive pricing model.
Using the same $30 item example, a 5% commission equals $1.50, and adding estimated $4–$6 in shipping, total costs range from $6 to $8, or roughly 20% to 27% of the sale price.
Key takeaway: Although Temu promotes lower upfront fees, sellers bear the cost of shipping and tight pricing competition. In practice, net margins can be similar to or even tighter than on Amazon.
Amazon vs Temu: Small Retailer Comparison (2025)
Quick Seller Overview
| Category | Amazon | Temu | Key Takeaway |
|---|---|---|---|
| Market Reach & Users | 310M+ active users; strong in North America; premium trust. | Rapid growth with hundreds of millions of users in 90+ markets. | Amazon = trust; Temu = discount growth. |
| Best Suited For | Branded or mid-premium items ($25–$500+). | Low-cost, trend items ($1–$50). | Match product to platform. |
| Acceptance Difficulty | Moderate–high; verified ID, bank, category approval. | Low–moderate; US business, address, local inventory. | Amazon stricter; Temu easier. |
| Fulfillment Model | FBA 1–2-day delivery; storage fees apply. | Mostly self-fulfillment; invited warehouse option; free ship on $30+ orders. | Amazon = speed; Temu = low cost. |
| Fee Structure | Pro plan $39.99/mo; 8–15% referral; FBA $2.33–$3.10 + storage. | No monthly fee; 2–5% commission; ~2.9% + $0.30 payment; seller pays $4–$6 shipping. | Temu cheaper, but tighter margins. |
| Worked Example ($30 Item) | ≈ $9 (~30%) in total fees. | ≈ $7–$9 (~23–30%) total. | Margins often similar. |
| Pricing Environment | Supports mid-premium pricing, brand value. | Price-driven, high-volume sales. | Amazon = margin room; Temu = price race. |
| Customer Ownership | Limited data, no off-platform contact. | Minimal control, platform-led promos. | Amazon slightly better. |
| Brand Control | Full control; A+ content. | Platform-set listings. | Amazon wins for branding. |
| Geographic Reach | 20+ marketplaces; strong FBA network. | 90+ markets; simpler onboarding. | Amazon = depth; Temu = reach. |
| Pros | Trusted brand, FBA logistics, premium buyers. | Low fees, fast growth, easy setup. | Amazon = stability; Temu = speed. |
| Cons | High fees, strict rules. | Thin margins, less control. | Choose by tolerance. |
| Best Strategy (2025) | Use for premium lines $25+. | Use for low-cost SKUs $1–$20. | Hybrid + DTC site. |
Pricing Expectations & Product Fit
Amazon’s Pricing Environment
Amazon supports mid to premium-range pricing where customers pay for convenience, brand reliability, and fast delivery. While competition is intense, sellers can maintain solid margins through strong branding and differentiation. Private-label brands and unique offerings perform well when paired with effective marketing.
The ideal products for Amazon include branded or innovative items, mid to high-ticket products typically priced between $25 and $500 or more, and listings where quality, trust, and authenticity drive purchase decisions. Building a strong brand presence helps sellers avoid price wars and attract loyal buyers.
Temu’s Pricing Reality
Temu operates on an ultra-competitive pricing model focused on volume over margin. Shoppers expect extremely low prices, often close to factory or wholesale levels. Its consumer-to-manufacturer model enables direct sourcing, reducing costs and allowing aggressive discounts. Sellers succeed by offering lightweight, fast-moving products that follow trends in beauty, home goods, fashion accessories, and low-cost gadgets. Brand identity is secondary to affordability and speed.
Best-performing products on Temu include fashion and accessories, home and kitchen tools, small consumer electronics accessories, impulse-buy items under $20, and trendy seasonal goods with quick turnover.
The Key Difference: Amazon enables premium positioning through brand and quality, while Temu depends on razor-thin margins and high-volume sales.
Who Owns The Customer?
Neither platform offers full customer ownership, but there are key differences. On Amazon, the company retains control of the customer relationship. Sellers have limited access to buyer data, cannot collect customer emails, and are prohibited from marketing outside Amazon. Repeat purchases rely heavily on Amazon’s search ranking and Buy Box algorithm, meaning sellers are essentially building Amazon’s ecosystem as much as their own.
Temu goes a step further. Sellers have minimal influence over branding, product presentation, and merchandising. The platform prioritizes uniformity and low prices over brand differentiation, giving sellers little visibility or control over how products are displayed. Like Amazon, Temu does not provide customer contact lists or allow direct marketing.
If long-term brand growth and customer loyalty matter to your business, use marketplaces primarily for traffic and sales volume while developing your own Shopify store to build direct customer relationships and full ownership of your brand experience.
Operational Requirements & Control
What Amazon Offers and Demands
On Amazon, you control product listings including titles, images, and descriptions, within platform guidelines. You set your own pricing, though visibility largely depends on the Buy Box algorithm, which considers price, fulfillment method, and seller performance.
You manage inventory and can create enhanced brand content if you’re Brand Registered. Amazon controls fulfillment timing if you use FBA, customer service for FBA orders, product search ranking, and Buy Box placement.
Operationally, you must maintain fast fulfillment (typically one to two days with FBA), high customer service ratings, consistent stock levels, and compliance with key performance metrics such as order defect rate, late shipment rate, and on-time delivery.
What Temu Offers and Demands
On Temu, sellers manage product listings, inventory, and pricing within strict competitive limits. The platform controls most of the shopping experience, including merchandising, platform compliance, payment processing, and promotional strategy.
Fulfillment models vary: some U.S. sellers self-fulfill, while others use Temu’s warehouse-based logistics. Orders generally must be shipped within 72 hours of confirmation, with penalties for delays. Sellers must follow packaging and compliance standards, maintain strong performance scores to stay visible in search, and avoid duplicate listings or misleading product data.
In short, Amazon offers greater brand control but demands operational precision. Temu emphasizes speed, compliance, and price competitiveness, leaving less room for long-term brand building.
Geographic Reach & Expansion
Amazon operates over 20 dedicated marketplaces across regions including North America, Europe, Asia, and the Middle East. Each marketplace functions independently, requiring separate registration, compliance, and tax setup. The platform’s Fulfillment by Amazon (FBA) network provides global warehousing, fast delivery, and customer support. However, cross-border selling involves challenges like VAT registration, currency conversion, and regional tax compliance, adding operational complexity for sellers.
Temu, by contrast, has expanded into more than 90 markets worldwide, reflecting one of the fastest international growth trajectories in e-commerce. Most fulfillment still originates from centralized hubs in Asia, though regional warehouses are growing in key markets. The platform simplifies cross-border expansion with lower entry barriers, quick onboarding, and integrated logistics support. While Temu offers faster international scaling and strong presence in emerging markets, sellers experience less control over logistics, branding, and customer data compared to Amazon.
Overall, Amazon provides proven infrastructure and reliability but higher complexity, while Temu enables broader reach with simpler expansion yet reduced seller control.
The Verdict: Which Platform Fits Your Business?
Choose Amazon if you sell branded, unique, or premium products; maintain healthy profit margins; value strong operational infrastructure and fulfillment support through FBA; want to build product reviews and brand credibility; offer products typically priced above $25; and can meet Amazon’s strict performance metrics for delivery, returns, and customer satisfaction.
Choose Temu if you produce or source ultra-low-cost goods; can compete mainly on price while operating with thin margins; manage U.S.-based or partner fulfillment to meet quick shipping demands; sell fast-moving, trend-driven, impulse-buy products under $20; and prioritize rapid sales volume and visibility over long-term brand building.
Many successful sellers use both platforms strategically. Premium or branded items perform best on Amazon, while low-cost, high-turnover products can move faster on Temu. Treat them as separate channels with distinct pricing, inventory, and marketing strategies.
However, neither should be your sole sales channel. Building your own e-commerce presence through Shopify or similar platforms ensures customer ownership, brand control, and lasting equity that marketplaces can’t provide.
Ultimately, the right choice depends less on which platform is “better” and more on which aligns with your pricing power, product type, and long-term business goals. The marketplace you select will directly influence your margins, operations, and growth trajectory.
Related: This article is part of Mooloo’s Business & Entrepreneurship Hub, covering how businesses are started, financed, scaled, and protected over time.
