Temu vs Amazon: Why UK Sellers Are Diversifying in 2026

For the better part of a decade, Amazon has been the default marketplace for UK sellers. It's where the traffic is, where the infrastructure is, and where the customers expect to shop. That hasn't changed. What has changed is the cost of doing business on Amazon — and the emergence of a platform that's offering UK sellers something Amazon no longer can: low fees, growing traffic, and almost no competition.

That platform is Temu. And in 2026, the smartest UK sellers aren't choosing between Amazon and Temu. They're on both.

The Amazon Problem: Rising Costs, Declining Margins

If you've been selling on Amazon UK for more than a couple of years, you've already felt the squeeze. Seller fees have increased steadily, FBA costs have risen, advertising spend has become practically mandatory, and the competition in most categories has intensified to the point where even well-established sellers are seeing their margins erode.

Here's the reality for an average Amazon UK seller in 2026:

• Referral fees: 8–15% depending on category (many categories now at 15%)
• FBA fees: £2.50–£6.00+ per unit depending on size and weight
• Advertising costs: Average ACoS (advertising cost of sale) now sitting at 25–35% in competitive categories
• Storage fees: Increased twice in the past 18 months, now with additional "aged inventory" surcharges

When you add all of this together, many Amazon sellers are keeping less than 15% of their top-line revenue as actual profit. For sellers in competitive categories like electronics, home goods, or beauty, that number can be even lower.

Temu: A Different Economics

Temu's fee structure is dramatically simpler and significantly cheaper. Here's what UK sellers actually pay:

The difference is material. A product that generates £20 in revenue on Amazon might leave you with £2–3 in profit after all fees. That same product on Temu, with its 7–11% commission and no mandatory FBA or advertising fees, could leave you with £6–8. That's not a marginal improvement — it's a 2–3× increase in per-unit profitability.

The Traffic Argument

Amazon's biggest advantage has always been traffic. And it's still significant — Amazon UK attracts over 400 million monthly visits. But Temu's growth trajectory is extraordinary. With 13 million monthly active users in the UK and an average session time of 18 minutes per day, Temu shoppers aren't just visiting — they're browsing, discovering, and buying.

What makes Temu's traffic particularly valuable for UK sellers is the discovery-driven nature of the platform. On Amazon, customers typically search for a specific product. On Temu, customers browse. This means your product can get discovered by shoppers who weren't specifically looking for it — which is exactly the kind of exposure that's become prohibitively expensive to achieve on Amazon through PPC advertising.

Competition: Saturated vs. Wide Open

Search for almost any product category on Amazon UK and you'll find hundreds, often thousands, of competing listings. The top positions are dominated by sellers with years of review history, established ad budgets, and deep pockets.

On Temu, the landscape is completely different. Most UK product categories have a fraction of the competition. Many sub-categories that are intensely contested on Amazon have fewer than 20 UK-based sellers on Temu. This means that simply having a well-optimised listing with good images and competitive pricing can put you on page one — without spending a penny on advertising.

"We moved our top 50 products from Amazon to Temu and within eight weeks they were ranking on page one for their primary keywords. On Amazon, those same products were buried on page 3–4 despite years of optimisation." — SellerSpring client, pet accessories category

Why "Both" Is the Right Answer

We're not suggesting you abandon Amazon. Amazon remains the largest marketplace in the UK and a critical revenue channel for most sellers. What we are saying is that relying exclusively on Amazon is becoming increasingly risky and expensive.

The sellers who are performing best right now are those who've diversified their revenue across multiple channels. And Temu is, by far, the most compelling diversification opportunity available to UK sellers today. Here's why:

1. Low barrier to entry: You can launch a Temu store with zero upfront cost and have products live within 10 days
2. Incremental revenue: Temu traffic is largely additive — you're reaching customers who aren't shopping on Amazon
3. Better margins: Lower fees mean every sale on Temu is more profitable than the same sale on Amazon
4. Operational simplicity: You can use the same inventory, same warehouse, same couriers. There's no FBA-equivalent to set up
5. First-mover advantage: The window for establishing yourself on Temu before it's saturated is closing. Sellers who move now will have a competitive moat

The Risk of Doing Nothing

Every month you wait, more of your competitors are discovering Temu. The sellers who are establishing themselves today — building review history, earning organic search positions, developing a track record with the algorithm — are building an advantage that will be very difficult to overcome once the platform matures.

We saw the same pattern with Amazon a decade ago. The sellers who joined early dominated their categories for years. The sellers who waited struggled to break through. Temu is following the same trajectory, just at a faster pace.

The question isn't whether Temu will become a major marketplace in the UK — it already is. The question is whether you'll be established on it when it reaches its peak, or whether you'll be trying to catch up.