Analysis of Seller-Centric Operating Costs for PDD, Temu, and Amazon

From the perspective of sellers, what are the differences in cost structures for operating on Pinduoduo, Temu, and Amazon?

In both cross-border e-commerce and domestic e-commerce sectors, the choice of platform has a profound impact on sellers' operational costs and profit margins. For sellers, choosing the right platform to sell products is an important decision that requires comprehensive consideration of multiple factors. Each of these three platforms-Pinduoduo, Temu, and Amazon-has its own unique business model and cost structure, presenting different challenges and opportunities for sellers.

First, let’s take a look at Pinduoduo. As an e-commerce platform that originated domestically in China, Pinduoduo quickly rose to prominence with its social + e-commerce model. For sellers, the cost of joining Pinduoduo is relatively low. The platform typically does not charge high entrance fees but instead generates revenue through commission charges. Pinduoduo also encourages merchants to attract traffic through group-buying activities. While this model can lead to increased sales, it also demands strong supply chain management and inventory control capabilities from sellers. Recent reports have noted that some small and medium-sized sellers achieved sales growth by participating in Pinduoduo's promotional events, but they also faced the risk of excess inventory. For sellers looking to enter the market at a lower cost, Pinduoduo is a platform worth trying.

Next is Temu, which is Pinduoduo’s international version. Temu primarily targets overseas markets, especially North America. Compared to Pinduoduo, Temu places greater emphasis on low-price strategies and rapid expansion in its operational model. For sellers, the cost of joining Temu is similarly low, but they face greater competitive pressures. Since Temu focuses on ultra-low prices, it demands stricter cost control over products. According to related reports, many sellers have had to reduce their profit margins or even sell at a loss to gain a competitive edge on Temu. Additionally, Temu has strict requirements for logistics timeliness, increasing the complexity of cross-border logistics management. For sellers aiming to capture market share with low-price strategies, Temu presents a potentially huge market opportunity but also comes with higher risks.

Finally, we come to Amazon. As one of the largest e-commerce platforms globally, Amazon is known for its stringent rules and high thresholds. For sellers, the cost of joining Amazon is higher, requiring payment of a monthly subscription fee of $39.99 for professional seller accounts and bearing high advertising expenses. However, Amazon's advantage lies in its massive user base and mature ecosystem. Through FBA Amazon Logistics services, sellers can enjoy efficient warehousing and distribution services, enhancing the user experience. However, this also means that sellers need to invest more funds into inventory management and logistics support. A recent news story mentioned that a seller received negative reviews due to delayed order shipments caused by insufficient inventory replenishment. This highlights the fact that operating on Amazon requires sellers to have stronger financial resources and more refined operational management capabilities.

In summary, Pinduoduo, Temu, and Amazon each have their own characteristics and are suitable for different types and stages of sellers. For sellers with limited budgets who wish to quickly break into the market, Pinduoduo and Temu may be better choices; whereas for sellers seeking brand effects and willing to invest more resources in building long-term competitiveness, Amazon should be prioritized. Of course, regardless of which platform is chosen, sellers need to fully understand its cost structure and make wise decisions based on their own circumstances. After all, burning money to expand the market is not a sustainable strategy in the e-commerce industry. Only by finding a development path suited to themselves can sustainable growth be achieved.