A major problem with eBay is well basically the Chinese sellers flooding it with totally cheap items (or crap), no one can possible compete with, which leads to another problem with buyers not wanting to pay for anything actually worth something but that’s another matter. I stumbled across this post, which does give a little information on how they can ship a item all the way from Hong-Kong for £1 all in. It’s actually deeper than I thought with government subsidies being mentioned at one point to improve foreign sales and keeping employment up. Now mix that in with all the other issues it brings wrecking the local markets, lying about item locations, total disregard for customer service and you soon see eBay might as well be called ChiBay.
How do China eBay sellers make money selling electronics at including shipping to remote locations?
There are plenty of items like these which I have bought and work fine for years.
I understand quality of these items is a bit dodgy sometimes and chinese labour is cheap, but surely it costs more than to ship to a guy living in outback Australia. Where’s the profit in this for them?
Comments (that are relevant) :
Hong Kong post have a bulk shipping rate making shipping as little as 1.3 HKD (17 cents) for a 20g parcel. A large Ebay seller can become a store and pay a monthly fee to avoid insertion fees and get a cheaper final value fee. Their only fee to ebay may be a final value fee of around 6%. PayPal fees may also come down for a big seller to around 1.3%. That makes the shipping + Ebay + PayPal fees about 24 cents on a dollar product, leaving about 76 cents for product + packaging + labour + overhead + profit.
There is a fee, sort-of. There is a treaty of sorts that handles payment for international mail delivery. Most (if not all) countries are on board with it. In this instance, the Chinese postal service adds up how much US mail (by weight) it delivers throughout the year from the US, and the USPS adds up how much mail it delivers that came from China. If they equal out, nobody pays anything. If one country delivered more than the other, the country that sent more mail pays a set amount per ton to cover the overage. So if the US sends 1 million tons of mail to China, and China sends 1.3 million tons of mail to the US, the US postal service is on the hook for 300k tons of mail at whatever the going rate is (probably negotiated annually).
China’s 17 cents per package cost probably doesn’t come anywhere near covering this, but the Chinese government covers the difference to keep the cost of shipping low. This allows Chinses ebay sellers to ship for practically nothing, which keeps products moving, which keeps China’s factories running, which keeps people employed.
The Chinese government subsidizes the shipping fee, so the USPS receives their normal bulk mail fees.
The chinese government subsidises shipping rates to encourage economic development and foreign sales.
they may not be making a profit on the sales, sometimes they offer those items at cost to boost their feedback score so people are more likely to buy from them for larger, more profitable items.
They can sell them so cheaply because the components used were free or very cheap.
A large percent of these items are OEM products made for other some companies that fail some quality control… they buy them in bulk from factory and order non-branded cases if needed. A smaller percent is products made on 3rd/night shift, or after a large order for an OEM buyer is completed.
Others use integrated circuits that have failed quality control or they’re recovered from pcb assembly companies. When a company uses pick and place machines to place components on PCB, a small percent gets dropped by the machines so a small percent of lost parts is tolerated… some people go and collect the parts from behind these machines and if needed buy them as scrap, very cheaply.
Then there’s components that are simply recycled from other boards, or from failed production runs (ex company makes 1000 boards then they realize they wired an IC incorrectly on the pcb, so the run is wasted, and it’s too expensive for them to manually fix each one, therefore they throw them away or sell them so others can recover the ICs)