773. The Temu Pricing Shift Every Product Business Owner Should Know

Temu prices just went up, and here is why this is good news for your product business. Hey, I'm Jacqueline Snyder, and welcome back to the Product Boss Podcast. And this is where we help you build your physical product brand and the business behind the brand. And now we've helped over 100,000 students worldwide. This works for anything that you make and sell wherever you're selling them, wherever you are in the world. So let's get into this newest news report and let's talk about Temu. And it's actually deeper than Temu. It's an, it's an actual change that's happening.

Hi, I'm Jacqueline Snyder, and this is the Product Boss Podcast. I've helped launch and grow thousands of product-based businesses, even one of my own. And over the last 20 years, I've seen behind the scenes of businesses just like yours. Whether they are makers, manufacturers, artists, or food and beverage businesses, I have spent so many hours studying it all. I've discovered what makes them successful, what mistakes they could have avoided, how did they turn their ideas into a successful business. And what are the strategies that they have used to make more sales and be discovered by more customers? And this is what this show is all about. Whether you're just starting out or you're looking to become a million-dollar product boss, I'm here to give you the permission to chase your dreams, no matter how big or small. All you need is the right mindset, a little courage, strategy, and support, and you too can be the next million-dollar product boss.

Let's do this. Okay, so for years, any product that was imported or shipped that was under $800 had this de minimis exemption, and that means that it didn't have to be stopped by customs and it was able to fly by without it incurring any sort of custom fees. And as of May and August, this is now dead. And here why this is really good for your product-based business and the things that might be affecting it as well. One, the cheap, cheap, cheap competition that exists out there. For example, Temu—they actually get to raise their prices now. Now they get to be in competition in real life with real prices to domestic businesses, and this is really great because they were able to undercut prices. I mean, I've had a ton of clients literally where Temu has knocked them off and actually stolen photos from their website and posted it on Temu and tried to sell it. In fact, I've had clients knock themselves. Off to sell on Temu because the competition was just getting really great. And we don't have to get into the ins and outs of that just yet. And if your brain is telling you like, oh my God, that's why I don't wanna do this and I'm gonna get too big and people are gonna knock me off. You guys, the second that you get big, that's gonna happen. And also you may or may not have pulled your ideas from other people's. Okay, we're not reinventing the wheel, we're redesigning it. And also we're creating the stories and the backstories behind it for your customers to want to buy from you instead of someone else. Side note, I don't shop from Temu. I won't let my daughter shop from Temu because too many of my clients have been affected by it. And why are we buying cheap knockoff stuff when we've got each other to shop from? All right, this is what's gonna happen. The cheap stuff, the stuff that's being imported, their prices have to go up 20 to 40% because the duties and taxes are going to affect them now. And this is going to tilt things in the direction of small businesses and how this is going to support us in competition with the cheap guys. Okay, so I want to talk about 2 different things here. One, how this is going to support your small business and why I've always coached my clients and my students into not racing to the bottom. All right, so the first part of all of this is the competition overseas was able to undercut domestic businesses by 20 to 40%. Now, if you're listening to this in Australia or Canada, New Zealand, the UK, in Europe, You might have different numbers and different prices, but let's just generalize this into this idea that when people were importing, if they were sending packages that were under $800, think about it as like a blind bag, right? Customs never stopped it, they didn't look at it, it wasn't being declared in that way. Now, here's the deal, and you need to hear this no matter what we're talking about here. For you as a small product-based business, you're never going to race to the bottom. There's literally no reason Why Small Product-Based Business Owners Need to Race to the Bottom. And let's talk about that, right? If you think that your competition is something like Target or Walmart or very big box stores or product brands that exist in lots and lots of places, we cannot compete with that. That stuff is made overseas, made cheap, made in thousands and thousands and thousands of units so their cost per unit can come down, their labor is cheaper, the materials they're using is cheaper. So while we may share customers that shop at Target or shop at Walmart or even shop at Temu, they're not the ideal customer for you and your product. I would rather you match your price point to the brand, to the value behind the brand by attracting the right customer. Because guess what? And I've taught this over and over and over. Sometimes raising your prices will actually sell more of your product than lowering your prices. In fact, I just want to—I did this the other day with a client. I was showing them two products. Okay, so I'm gonna—I'm gonna give you the exact example. I've used this if you're in any of my workshops. I use it oftentimes. Okay, so maybe you know about Oil of Olay. Anyone? The face cream Oil of Olay—it's been around forever. My grandma still uses the basic kind, and her skin is beautiful. So maybe there's something to it. But there's Oil of Olay that you might be able to buy for $9.99 as skincare. Okay, now even Oil of Olay has a different range of products. You can go up to $32 for their fancier package behind the case, um, ultra anti-aging product. So I want you to just think within the same brand, 2 different products, $9.99, $32. Which one do you think is going to be better for your skin? Which one do you think is going to have a greater effect? Okay, most of you probably chose the $32 option. Okay, now let's jump it. Maybe you've heard of the company La Mer. There used to be a rumor that Jennifer Lopez used it all over her body, and that's why she was like so gorgeous looking. Also because she's just gorgeous looking. But Jennifer Lopez or celebrities would use this product called La Mer. At some point Costco was selling it, and like a two ounce jar was three hundred dollars. Okay, a two ounce jar for three hundred dollars. I know some of your jaws are dropping right now. I see it usually happen on my workshops when I'm live and I'm talking about product brands. Okay, so now let's go from the best of the best oil of olay thirty two dollar product and a three hundred dollar. caviar jar-sized product, which one do you think is going to have a better result on your skin? Most of you are going to say the more expensive one. Most of you, right? Because just human psychology is going to associate something that's more expensive with being better quality, longer lasting. And so what I want you to hear there is when you're thinking about your customer now, I gave you 2 huge gaps, right? Like $32 versus $300. But when you are attracting the right customer, when you're meeting your customer where they are, They are going to have these considerations. So you're a beautiful small business that sells jewelry, candles, home fragrances, beauty body cream, apparel. You think you need a race to the bottom, especially when you're on a platform, let's say like a sales channel like Etsy, where you're comparing to other people who kind of don't know what they're doing, or in-person markets where, you know, somebody's going to get vegetables and you're trying to sell them a $90 candle. There might be a break in discrepancy of like what the customer at that place wants. But when I work with my clients, we really talk about the brand, right? Like, how do we figure out the product, the ideal customer, how the brand matches to the customer? So let's go back to Temu, for example. I know people who are millionaires that shop on Temu because of their value. So I know someone who buys knockoff Alo activewear on Temu. She's like, oh yeah, it looks just like Alo. Like, I obviously, I'm your coach and your advisor, so I'm not going to buy from knockoffs anyways. But I look at this and I go, okay, well, but the quality. Well, she just wants the trend. She wants the trend for cheap and she wants disposable clothing. So she is still Alo's ideal customer, but she doesn't value the brand and value the idea that like I'm wearing a true product from this company. She's more into the look and how it makes her feel around other people. So would I say that Alo needs to go chase this kind of customer down and worry about it? No. Alo needs a customer that's like, I love good quality, I want something that lasts. I've got Alo leggings from like 10 years ago, right? And if you don't know Alo, it's A-L-O, and they sell like $158, $160 activewear leggings. Okay, so you've got to understand that even big brands like this are getting knocked off, but their ideal customers— yeah, of course they're going to lose a percentage of business, but their ideal customers want to shop from them for all the reasons. And then this is why the idea of pricing is kind of irrelevant, because pricing but then quality, right? What's the washability? How long does it last? Um, experience— how are they supporting their customers when they come into the store? What's the experience like when you buy and want to return? What's the fit Like, so you really wanna think about more than just the price competition. It's matching to the ideal customer and then the experience. Okay? And we know Temu, long time to get stuff, crappy stuff like disposable garbage. Okay? What I'm basically trying to say here is we're not racing to the bottom as small businesses. We're finding the value, we're building the brand, and we're matching it to the ideal customer. If you don't know how to do that, my friends, then it's time for you to get help in doing that. And I'm so glad that you're here for the podcast. Okay. Here's the other thing I wanna talk about, the other side to this $800 de minimis disappearing. Some of you have been importing from overseas, and so this may start to affect your imports. We have tons of clients that make their products overseas, they're manufactured overseas, and they're importing. Maybe you're importing jars, findings, materials, and you were able to come in underneath that $800. Now everyone's getting affected by it. It's something that's going to happen. Last year we dealt with tariffs, this year we're dealing with this, but we've got to think about the fact that it's going to even out the playing field for all of these knockoffs that are coming in cheaper and people that are undercutting, right? It's going to, it's going to support all of our individual economies if things are being manufactured domestically, or you're going to get to start to figure out, okay, well maybe my pricing needs to go up or I need to adjust it. So no matter what we're talking about here, pricing is important, but not pricing to be cheap, pricing to be profitable, pricing to match the market and pricing to be profitable. So we're evening out the playing field with the cheap guys, and then we're also, if you're in importing, you might be experiencing some cost raises. And this might be a really good time for you to go back and say, okay, well let me look at my packaging, let me look at my raw goods, let me look at stuff and say, now with this import fee, is there someone I can get it from domestically? Is there a manufacturer of this product? Is there a facility here? Is there another place I can do it? Because now that the prices are kind of coming up and maybe matching, it might be cheaper to ship, it might be cheaper per unit, you really get to do it. So if you're in a place that you're likely to import, Here's what I want to tell you, and I want to tell you this because I've been in this industry for 20 years, 20 years importing whether it's materials or products from overseas, whether I'm manufacturing domestically. This is going to happen throughout our lives, throughout our careers, throughout having our businesses. It's going to happen. I saw it happen during the pandemic. Bless that the client that I was supporting at that point, we were making activewear leggings, and so funny, we were we finally found the ideal fabric, and it came from Italy. I don't know if you guys remember, but Italy. Shut down before China. So it's like, oh my gosh, we found the fabric, and then it came from a place that we would have never guessed would have been the first place to shut down. So we had to come up with a plan B, C, D, and I did this with my clients inside my mastermind and my programs oftentimes back then. This is what it looks like to be supported on the daily versus not having support, not having a place to resource it. You know, I do these podcasts, but the thing is like, who do you have to go to? What community do you have to ask the questions? Okay guys, like my prices are going up. Like does anyone have another resource? So that's really why I've like built such a strong community and why we have our mastermind and we have the collective because as things are happening in real time, we can discuss them because everybody has different information, different ideas. So the point of all this is I want you to always have a plan A, B, C. In the pandemic, we had it all the way to like Z. For you, A, B, C, maybe D. So we always have a place. to back it up from. You never know what's gonna happen, whether it's this, whether your manufacturer goes out of business, whether the jar you wanted is sold out, whatever it is, you wanna have multiple plans. Okay, so here are the 3 moves that I want you to integrate now knowing this news. One, now your story and the story of the brand and the true connection with the customer is gonna matter even more because if we're not shopping on price comparison, then we're gonna shop on connection, experience, how the customer feels when they interact with you and your brand. Okay, so this is a really important time to humanize your company, to make it make sense to why they're supporting you, the small business, or, or your small business. It's a time to really differentiate. Um, something we're working on inside of the collective, which we'll talk about this in the future here, is AEO, which is search engine optimization basically on AI, cuz there's discoverability there. And so the more you start to do this, the more you'll be discovered on things like ChatGPT. Which they're talking about like 50% of customers are gonna start discovering products on there and buying. Okay, so that's one part. Second thing is I want you to revisit your pricing. If you are importing, if you're seeing costs be affected, even if you're buying domestically but they're importing, your prices might be going up on units, on raw goods, on product. So this is a time to recheck your pricing because competition is gonna rise, but yours might rise as well. And think about it between 20 30, maybe even 40%, okay? So it's really important to be profitable so you can absorb some of these costs and that you're raising your prices. Now when you're listening to this would be a really good time to look at your prices and be prepared for the holidays, 'cause people are going to be buying, and so if they're buying, we wanna make sure that you are using the right pricing so you are profitable and you have the right margins on all of your products, okay? Third thing is check with your supply chain. So if you're importing from overseas, check with your supply chain. How is this affecting it? You might be like, I'm always ordering over $800, so it hasn't affected me. But some of you might be ordering less than that, and this might be a time for you to look into that. Okay, so check with your supply chain, check your pricing and your margins, and raise your prices. And then finally, share your stories, right? Like, share your story, create the experience, create the connection with the customer, because That cannot be knocked off. All right, if this is helpful to you, every single week we do a live workshop, and this is the how to lead, run, and grow your product-based business, right? How to build the business and the brand, right? The brand and the business behind it. And every single week I do this workshop, and I want to invite you to it. Every time there's like something a little bit different, so go ahead and click the link in the show notes to sign up. It's totally free. It's such an impactful workshop. We're really speaking to those of you who are growing to six. and 7-figure brands. Okay, so if you're serious, if you're a hobbyist, I'd say listen to this podcast. If you're like, oh, I just want to make what I want to make, and you know, I don't want to follow rules, and I just want to create, okay, I love that. But this might be the place that you land. If you're like, no, no, I'm ambitious, I'm serious, I really want to grow this thing. And you guys, Q4, you can double your revenue. Everything you made from January to September, in Q4 alone, you can double everything you made. So let's say you made $100,000, January through September, you can make $200,000 in the last quarter, ending up with a $300,000 business. And you go from there, scale it up if you're a million, multimillion dollar business, or if you're smaller than that. We're about to enter into a busy season, but we're also in this prep time. So wouldn't it be so supportive to come to our workshop, see where the gaps are, where the systems are? Because here's what I really want for all of you. I want you to enjoy your holiday season. I know as product-based people, It's crazy because it's like the busiest time of year for our businesses and personally, but what would happen if you were right now working on the systems, the operations, how you ran the company, and you're taking more of a leadership position in your company so that you're setting goals, you're creating systems, you've, you've set the vision and you're working backwards from that versus feeling reactive. And finally, when all that works together, then when you grow, things don't break. It doesn't feel overwhelming. You can, get more sales and hold it and have an excellent customer experience. So I will add the link to the show notes. It's theproductbossworkshops.com. I hope to see you there. And, um, until next time.

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