AliExpress vs. Temu vs. Amazon: Different Business Models Elucidated

November 26, 2024

Three significant contenders- AliExpress, Temu, and Amazon, dominate the global eCommerce landscape.

• Aliexpress records 997.76M visitors till October 2024.
• Temu has 167 million active users worldwide every month.
• Amazon has an active 2.7B visitor reach.

Prominent for its direct-to-consumer model, AliExpress is a lucrative platform for sellers and manufacturers worldwide. The platform magnetizes buyers with its availability of products at rock-bottom prices, making it a top choice for bargain hunters seeking overseas goods.

The moment Temu landed on the market, it became the talk of the town. Backed by PDD Holdings (the parent company of Pinduoduo), the platform focuses on ultra-affordable products. It blends low-cost items with a streamlined, mobile-first experience.

The undisputed leader, Amazon, leads every online shopaholic’s mind. With a global reach and reliability, Amazon offers convenience and trust, often with fast delivery and excellent customer service.

Each platform provides a distinct shopping experience. eCommerce app development wizards help you get similar apps with top-notch features and user-friendly interfaces. 

To truly ace your business vision, it’s vital to understand the business model of each eCommerce platform and learn how you can make money if you get a similar app. This blog post uncovers how these platforms have gained popularity and are poised to shape their future. 

Let’s dive in!

Aspects Comparison: AliExpress vs. Temu vs Amazon

To fully grasp the concept of these eCommerce giants, it is essential to see them in a broader context and how they are distinguished from each other. Have a look-

Pricing Structures

• Temu: Offers heavily discounted products, starting under $1, thanks to solid supplier ties and PDD Holdings’ investment. Prices are low due to limited margins and strategic relationships.
• AliExpress: Provides affordable prices by connecting customers directly with manufacturers and cutting out intermediaries. This results in lower costs than competitors like Temu.
• Amazon: It offers a wide price range, balancing affordability and quality. Its Prime members enjoy benefits like faster shipping and exclusive deals.

Shipping Costs and Delivery Times

• Temu: It offers expedited delivery (5-10 days) and free shipping for most products, though it has more shipping options than AliExpress.
• AliExpress: Provides multiple shipping options, with standard delivery (15-35 days) and premium (7-15 days). It offers more flexibility but longer delivery times.
• Amazon: Amazon provides fast shipping, especially for Prime members who enjoy same-day or two-day delivery.

Handling Fees and Transaction Charges

• Temu: Charges sellers small fees, helping keep prices low but affecting seller profitability.
• AliExpress: Charges sellers 5-8% fees per sale, resulting in slightly higher prices but a more comprehensive product selection.
• Amazon: Charges sellers referral and fulfillment fees, which may increase prices but provides access to a large customer base and robust infrastructure.

Handling of Returns and Refunds

• Temu: Offers returns up to 90 days and total liability for packages from dispatch to delivery, ensuring strong buyer protection.
• AliExpress: This site allows refunds within 15 days if the item is unopened and in original condition, but it offers more restrictive buyer protection.
• Amazon: Amazon provides an easy return process and refunds or replacements within a set time, focusing on customer satisfaction.

AliExpress vs. Temu vs Amazon: Understanding the Business Model

AliExpress allows sellers to list products and manage pricing, inventory, and shipping. Temu approaches a compound of direct-to-consumer (D2C) and third-party vendors. Similar to AliExpress, Temu offers a marketplace setup.

Unlike AliExpress and Temu, Amazon utilizes a blend of fulfillment centers, warehouses, and third-party logistics to hasten delivery. Its prime service offers fast shipping, often within 1-2 days, for many items.

Comparison of Business Models

Product Sourcing

• AliExpress: Direct from manufacturers, often overseas.  
• Temu: Similar to AliExpress but focuses more on the U.S. market. Uses Pinduoduo’s supply chain.  
• Amazon: Sells both its products and third-party listings. Offers a more diverse range of goods from different sources.

Pricing

• AliExpress: Competitive, often cheaper due to bulk sourcing and direct-to-consumer shipping.  
• Temu: Aggressive pricing strategy, heavily discounts products to attract customers.  
• Amazon: Prices vary widely. Some products are cheaper, but many are higher due to faster shipping and premium service.

Shipping

• AliExpress: It can be slow and often takes weeks to ship internationally.  
• Temu: Faster than AliExpress due to improved logistics, often arriving within 1-2 weeks in the U.S.  
• Amazon: Fast, especially with Amazon Prime. Many items arrive in 1-2 days.

Customer Experience

• AliExpress: Mixed, with customer reviews helping gauge product quality.  
• Temu: This newer platform offers a clean interface and deals focused on U.S. buyers.  
• Amazon: Established, reliable customer service and return policies. A premium experience with a vast ecosystem.

Payment and Security

• AliExpress: Secure payment options but vary by seller.  
• Temu: Standard payment gateways and secure transactions.  
• Amazon: Strong security features and well-known payment systems (credit/debit cards, Amazon Pay).

To conclude, AliExpress offers low-cost goods, often from overseas, with slower shipping. Temu is a recent entry targeting the U.S. market with competitive pricing and quicker delivery. Amazon, the giant, offers diverse products with reliable, fast shipping and strong customer support. Each platform caters to different shopping needs, from budget-conscious buyers to those seeking quick, reliable delivery.

Which Platform is Better for Dropshipping?

Dropshipping attracts platforms with diverse products, competitive prices, and reliable shipping. Learn it with this brief comparison of AliExpress, Temu, and Amazon.

• AliExpress

AliExpress is the best choice for manufacturers as it offers them an extensive product range, low prices, and direct access. It also provides reliable shipping and buyer protection, making it the best choice for dropshipping.

• Temu

Temu provides aggressive pricing and fast shipping. However, its focus on Chinese suppliers limits product variety. Its commission model and lenient return policy benefit niche dropshipping markets and entrepreneurs seeking Temu clone for better growth!

• Amazon

Amazon offers strong brand recognition and fast shipping. However, its strict seller rules and fees can be challenging. The Fulfillment by Amazon (FBA) program simplifies logistics, making it ideal for those navigating its competitive market.

AliExpress vs. Temu vs. Amazon: Revenue Models

AliExpress, Temu, and Amazon each have distinct revenue strategies. These platforms influence how dropshipping businesses operate and profit. Let’s analyze the revenue models of these three platforms.

AliExpress Revenue Model

AliExpress operates on a commission-based revenue model, facilitating transactions between customers and third-party vendors.

• Commission Fees

Commission fees on sales made through the platform are the platform’s primary revenue generator. The platform charges a transaction fee based on the seller’s agreement.

• Advertising and Promotion

AliExpress earns through advertising and paid promotional tools. Sellers increase their product visibility with the “AliExpress Ads” program while the platform takes a share of the advertising revenue.

• Membership Fees

Some premium services on AliExpress require membership. The platform offers different subscription models for sellers, contributing to AliExpress’ revenue by providing access to enhanced features.

• Supplier Fees

AliExpress may charge suppliers additional fees to ensure priority listing or to provide further logistical services. These charges are often negotiable, giving suppliers flexibility in their sales approach.

Temu Revenue Model

Temu’s revenue model shares similarities with AliExpress but is slightly more focused on specific market segments.

• Supplier Commission Fees

Like AliExpress, Temu charges supplier commission fees. Temu takes a percentage of each sale, similar to AliExpress’s, but its commission structure may differ depending on the supplier’s location and product category.

• Advertising Revenue

The platform generates revenue from advertising services. Sellers pay to feature their products more prominently on the app and web platforms.

• Shipping and Handling Charges

Temu charges handling and shipping fees based on the buyer’s location. While the platform offers competitive pricing, shipping can sometimes incur additional charges, especially for expedited services.

• Membership Subscriptions

Temu could implement premium membership subscriptions for dropshipping sellers. Currently, Temu’s revenue mainly comes from suppliers and commission-based earnings.

Amazon Revenue Model

One of the most intricate and varied income models in the e-commerce sector is used by Amazon.

• Commissions from Marketplaces (Referral Fees)

Commissions paid to third-party merchants are Amazon’s primary source of income—these “referral fees” range between 6% and 45% of the sale price.

• Fees for Amazon Fulfillment (FBA)

Sellers use Fulfillment by Amazon (FBA) to ship their goods to Amazon’s warehouses. The FBA rates enclose storage and fulfillment expenses.

• Revenue from Advertising

Businesses pay for ad placement to boost exposure and sales. Amazon makes money from these ads. This business model helps generate billions of dollars annually.

• Amazon Prime Membership Fees

Amazon also profits from its subscription model through Amazon Prime. Customers buy premium memberships for free shipping, exclusive deals, and access to Amazon’s media content.

The Bottom Line

Each platform has strengths in the AliExpress vs. Temu vs. Amazon comparison. Temu offers low prices and faster shipping, AliExpress has affordable products with flexible shipping, and Amazon shines with a comprehensive product selection, fast Prime shipping, and reliable customer service.

The best choice depends on personal preferences, budget, and needs regarding product quality, shipping speed, and return policies. Understanding these factors helps business enthusiasts make informed decisions for a smooth clone or whitelabel shopping app development experience.

The Verdict: Is developing Clone Apps or Whitelabel solutions for AliExpress, Temu, or Amazon a Profitable Step?

Irrefutably, cloning or white labeling AliExpress, Temu, or Amazon will be fruitful for your new venture. Our app development experts help you leverage the power of your eCommerce business and scale your online presence results. If you want to learn more about our app development services, contact RichestSoft today!