Why Minimum Order Requirement for Temu is $15?

Are you going to shop on Temu but doubt in mind why the minimum Order Requirement for Temu is $15 for checkout?

Don’t worry, this doubt arises in the minds of many people who have come to shop with Temu for the first time, or till then their order is less than $15.

Well, in this blog we will clear the doubts of thousands of customers like you as to why Temu has kept this $15 minimum order requirement, and what things you need to keep in mind while ordering.

Let’s dive right in..!!

What Are The Reasons Behind the Minimum Order Requirement for Temu is $15?

Here you can check out the various reasons why Temu has strategically implemented the $15 minimum order limit for checkout.

1. To Reduce the Fulfillment Costs associated with Small Orders

As you can see, there are quite a few cheap items available on Temu, so people place 3-4 orders in which each item costs between $1-$3. In this case, Temu has to use a lot of its resources to handle small orders. If someone has ordered an item worth $5, then the expenses ranging from packing, shipping to delivery, etc. are more than $5 which has to be carried by the Temu which can cause loss in the long run. That’s why Temu has set the $15 minimum order limit so that it can cover at least the basic cost of its order like shipping charges, handling charges, packing charges etc.

2. To get Rid Of Product Testers

The free shipping offers available in Temu are availed by tons of those shoppers who just purchase the product, click the pictures and then return to Temu. Due to Temu’s lenient return policies, people are taking advantage of it and Temu is facing loss due to it. Now returning such items to Temu will no longer be easy for the testers. Temu now has introduced a $15 minimum order cost to get rid of product testers.

3. Push Customers For Larger Orders

One reason for setting a $15 minimum order is that Temu wants to push its customers towards larger orders, which will lower the average order value. However, on the other hand, customers will also benefit as they get more offers with larger orders.

What Are The Features of the $15 Minimum for TEMU? 

After making a $15 minimum order value, Temu has also benefited and will continue to do so in future. Let’s check out what are the features of the $15 minimum order which have benefited Temu in bringing stability to its business.

1. Getting More Profit Margins

It is clear that when the order value is above $15 per order, the profit margin will also increase. Temu is a new online marketplace in the market, to bring stability to its business, Temu introduced minimum order value as a strategy so that getting profitable from every order and it is easy to establish itself in the market.

2. Lower Customer Acquisition Costs

TEMU has to take the help of ads and promotions to establish its presence in the market, which every company does. The more ads, promotions, and discounts you offer, the higher its customer acquisition cost will be. Now, to reduce the acquisition cost, TEMU will have to maintain a profit margin, and to maintain a profit margin, a minimum order value will have to be set so that the company is profitable. That’s the reason why TEMU set a $15 minimum order value.

3. Better Operational Efficiencies

There are many cheap items available on TEMU, hence every customer tries to order the cheapest and best item and wants to enjoy using it. This increases the operational cost of TEMU. The shipping, handling, and delivery cost of an order is much higher than the order itself. In this scenario, the overall operational efficiency is getting increased. By setting a $15 minimum order value, TEMU has saved a lot of its operational costs, which has also improved its operational efficiency.

What Other Retailers Can Learn From TEMU’s $15 Minimum Order Value Policy?

TEMU’s $15 minimum order value has set a standard in the market by which e-commerce businesses can protect themselves from losses and improve their profit margins. Come let’s know what it is like.

1. Set a Reasonable Standard (Minimum) Order Value

Set your minimum order value. First of all, see what is your profit margin, how many people are ordering minimum-price products, and what is the minimum price that covers your operational costs. Now take the same minimum order as the base and set a minimum high value. This will benefit you in the long run.

2. Offer Free Shipping

Whenever you set a minimum order value, you will have to motivate your customers to place an order above the minimum order value. In this case, if you offer free shipping, more and more people will order to avail the benefit of free shipping and your e-commerce store will be able to generate good sales.

3. Highlight Low Price Products To Achieve Minimum Eligibility

You can mention other products along with the customer’s selected product to help them meet the minimum order eligibility. Such as some items of home improvements, accessories, etc. To reach the minimum order value customers will come up with new product ideas and your products will also be sold.

4. Communicate The Minimum Order Value Policy Clearly

You should communicate your minimum order policy on your website, in the shopping cart and during the checkout process. Otherwise, when the customer reaches the checkout, he finds out that the minimum order value is this much and he has to go back and repeat his shopping process.

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