Hacker News

The platform runs in a similar way to Shein – offering a seemingly endless array of items direct from suppliers who make short production runs in response to customer interest. But it differs in that while Shein directly contracts suppliers to make the orders, Temu acts as more of a bridge, allowing suppliers to focus on their production run while the platform manages product listings, marketing, and logistics.

“Yet, this comes at a cost for sellers: they relinquish control over pricing, return policies, and long-term sales growth planning,” says Yang. “Under this model, Temu’s duration of payments to sellers is notably longer, and the cashflow pressures fall on sellers, not platform.”

I guess this means Temu will never actually need to raise prices to a level that is sustainable for the merchant, as long as there are enough merchants willing to deal with them as a platform. That is fucked up (and clever).