alt Hacker NewsIf someone says to you "You can buy this widget that costs $10 to make for $5" that doesn't mean they they're selling it for $5. It means there's more going on and that the $5 price take is not the full story.
You may choose to ignore that and believe someone is selling you something for $5 but that doesn't make it true.
In the case of Temu, they're selling it for $5 of your money, and $5 of someone else's money, in order to capture you as a customer in the hope that you continue to buy things when they increase the price to $6, then $8, then $10, $15, $30 and so on in the future.
This is the Uber playbook, and if you have a solid product that people want and you can spend VC money long enough to build a trusted brand (or ideally keep prices artificially low until the competition gives up and you have a monopoly) it's very lucrative. I don't see it working for Temu myself. They sell things people don't need so as soon as the prices go up they'll probably fail. That said, Amazon see them as enough of a threat to launch Haul, so what do I know?
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None of that changes the fact that they are indeed selling it to me for $5 today, so the sentence you quoted is indeed accurate.
The use of 'loss leaders' has a long history, so is your point that Temu's use of loss leaders may be illegal?*
(*I poked around a bit, and this may be possible, especially in California.)
> You may choose to ignore that and believe someone is selling you something for $5 but that doesn't make it true.
Sir, I suggest you use the word "sell" in its usual way, not your own definition of it. If someone takes $5 and gives you in exchange the merchandise and right of ownership on it, then that indeed does mean they "sell it for $5". The fact that something else is going on doesn't make it false.