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Old 02-14-2014, 01:42 PM
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How are companies able to sell/ship products from China so cheaply?

I've purchased several items on Ebay that came from China or Hong Kong.
I bought a 4 pack of rechargeable batteries for 99 cents with free shipping.
A 3 pack of ear bud extension cords with volume control for 89 cents with free shipping. And etc.. Everything I've bought worked great!

The packages arrive withing 2 weeks with Chinese postage stamped all over them.
How on earth can they sell these items so cheaply and then ship them all the way from Asia for under a buck?
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Old 02-14-2014, 02:04 PM
jtur88 jtur88 is offline
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I don't know, but I would guess that the postage is rate in China is very very low, heavily subsidized. Under the treaty of the Universal Postal Union, a recipient country is required to deliver, without additional charge, any piece of mail that was posted in any other country.

When I went to Guatemala 20 years ago, the postal rate for an air mail letter to the USA was equal to four cents. The US postal service was bound to accept and handle it as first class maill when it got to the USA.

Last edited by jtur88; 02-14-2014 at 02:06 PM.
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Old 02-14-2014, 02:05 PM
yellowjacketcoder yellowjacketcoder is offline
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Labor in China is very low cost. Plus environmental regulations are minimal, so lower costs there.

Then, factor in that you aren't shipping 4 batteries overnight, you're shipping 40,000 batteries in a couple of weeks, so the shipping costs are quite low also.

All of that adds up to a very low price.
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Old 02-14-2014, 04:07 PM
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Just a note: the postal systems for the People's Republic of China, Hong Kong Special Administrative Region, and Macau Special Administrative Region of Macau are all different and independent of one another. The postage rates for one has nothing to do with the postage rates for another.
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Old 02-14-2014, 04:36 PM
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Apparently this is going to be an annual Dope tradition.

I found a variant method for my earlier thread in tracking the most recent cheap thing I bought off eBay from HK/PRC. It seems that the postal system is: put a lot of the items (packaged and labeled) in big mail bag. Send that bad really cheap to the US (in this case, Chicago), and then from there the individual packets thru the USPS.

But still the total cost of mailing plus the item is so small, it is amazing.
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Old 02-14-2014, 04:45 PM
Fuzzy Dunlop Fuzzy Dunlop is offline
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Originally Posted by yellowjacketcoder View Post
Labor in China is very low cost. Plus environmental regulations are minimal, so lower costs there.

Then, factor in that you aren't shipping 4 batteries overnight, you're shipping 40,000 batteries in a couple of weeks, so the shipping costs are quite low also.

All of that adds up to a very low price.
That's not at all what pkbites described. pkbites didn't order 40,000 batteries. It was an eBay order for a 4 pack and it was air mailed from Asia.
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Old 02-14-2014, 04:59 PM
Kansas Beekeeper Kansas Beekeeper is offline
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Originally Posted by Fuzzy Dunlop View Post
That's not at all what pkbites described. pkbites didn't order 40,000 batteries. It was an eBay order for a 4 pack and it was air mailed from Asia.
There's a company called dealextreme.com that sells very cheap electronics that are mailed from Asia. Yes, the envelopes are clearly postmarked from Asia and have marks indicating they cleared US customs. (This is certainly not a plug for dealextreme. While I've always gotten what I ordered, quality is hit and miss).
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Old 02-14-2014, 06:16 PM
Polar Iceman Polar Iceman is offline
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The real issue here is not the cost of postage; that is a secondary issue.

I need an adapter cable for my tablet.

Here, the cheapest I could find was $34.95.

On e-bay I found exactly the same item for $1.69, with free postage.

So the question is: why $34.95 in the USA and $1.69 in China?
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Old 02-14-2014, 06:32 PM
Fuzzy Dunlop Fuzzy Dunlop is offline
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Originally Posted by Polar Iceman View Post
The real issue here is not the cost of postage; that is a secondary issue.

I need an adapter cable for my tablet.

Here, the cheapest I could find was $34.95.

On e-bay I found exactly the same item for $1.69, with free postage.

So the question is: why $34.95 in the USA and $1.69 in China?
Companies don't price their products based on some fair markup over their cost. In theory pricing is simple - you price them so that charging any more would result in enough fewer people willing to buy it that you'd earn less money over all.

In practice companies generally aren't terribly rigorous in their methodology, but they'll still charge as much as they can get away with without hurting their bottom line. U.S. companies, especially big box retailers, can charge massive markups on cables that cost less than a dollar to make, because there are so many unsavy buyers. The kind of people who buy cables from Best Buy or Staples aren't in a good position to realize how massively overpriced they are, but there are lots of those people out there. Those people also aren't likely to chance buying a Chinese non-brand cable for 1/15th the price.

There are plenty of people who are willing to chance buying a Chinese cable, but those people are much less likely to pay the ridiculous markup on the cable, so the Chinese can't markup their product like the US Retailers can.
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Old 02-14-2014, 07:47 PM
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China has deliberately suppressed the value of its currency relative to the dollar. It has been doing this for a long time. In recent years concessions have been made, but it is probably still significantly undervalued.
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Old 02-14-2014, 09:08 PM
brickbacon brickbacon is offline
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In addition to what I posted in the linked thread on the same topic, I found these articles that talk about the subsidized postal arrangement between the US (USPS) and Hong Kong (China Post). This link has some numbers for reference.
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Old 02-14-2014, 09:15 PM
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Originally Posted by brickbacon View Post
In addition to what I posted in the linked thread on the same topic, I found these articles that talk about the subsidized postal arrangement between the US (USPS) and Hong Kong (China Post). This link has some numbers for reference.
China Post is not Hong Kong Post. The post office in Hong Kong is, unsurprisingly, Hong Kong Post. The post office in mainland China, again unsurprisingly, is China Post. Once again: they are not the same entity.
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Old 02-14-2014, 10:22 PM
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I used to work for a company which,among other things, sold products related to the industry we were in. Among which, a very well known UK based product.
One year, my boss went to an expo in China. Among the many interesting contacts he made there, was a company based out of the factory where the above mentioned products were manufactured: assuming there are 3 shifts in a day, they would produce the UK product for 1 or 2, and then for the last shift(s) carry on manufacturing the exact same thing, with the same excellent quality, but substituting the UK labels for their own, and then sell the finished thing for a fraction of the price.
I suspect this happens with several products, especially electronic-type ones.
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Old 02-14-2014, 10:48 PM
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The Chinese can make things amazingly cheaply. Here is the website of a company that sells disposable toothbrushes to hotel chains for less than four cents each.
http://hzshunlida.en.alibaba.com/pro...oothbrush.html

I've used them -- they would probably last a month or two of daily brushing. More or less comparable to the ones sold in US discount stores for over a buck apiece.

Last edited by jtur88; 02-14-2014 at 10:50 PM.
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Old 02-14-2014, 11:07 PM
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Originally Posted by Monty View Post
China Post is not Hong Kong Post. The post office in Hong Kong is, unsurprisingly, Hong Kong Post. The post office in mainland China, again unsurprisingly, is China Post. Once again: they are not the same entity.
No need for the snark. The articles mention deals with both HK and China Post. Are you questioning the articles or just trying to point out a (minor) misstatement of mine in summarizing the articles?
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Old 02-14-2014, 11:18 PM
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No. I'm pointing out something mentioned in this thread already: HK Post is not China Post. And one of your links itself repeats the error.

What snark?
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Old 02-14-2014, 11:34 PM
harmonicamoon harmonicamoon is online now
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I can understand electronics, very cheap, from China. They are labor intensive products. But when, at the store, I saw garlic, imported from China, I was shocked. California has the best soil in the world, and I am offered garlic from China? How could it be cheaper?
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Old 02-15-2014, 12:18 PM
RaftPeople RaftPeople is offline
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Originally Posted by Fuzzy Dunlop View Post
That's not at all what pkbites described. pkbites didn't order 40,000 batteries. It was an eBay order for a 4 pack and it was air mailed from Asia.
But it could have been part of a service that consolidates international parcel shipments.

For example:
1 - 10,000 orders are individually packed and labeled at mfg by automated system
2 - Entire group is shipped as one shipment to destination country including handling customs
3 - In destination country the packages are individually inducted into that carrier's network (or a partner's) and delivered


Even with something like the OP's example is still pretty inexpensive.
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Old 02-15-2014, 01:53 PM
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In regards to the OP, sometimes those items are sold for feedback padding so the sellers can get their ratings higher and then make back the losses on higher-profit items, or higher-profit quantities. Not necessarily the case here, but sometimes.

Quote:
Originally Posted by harmonicamoon View Post
I can understand electronics, very cheap, from China. They are labor intensive products. But when, at the store, I saw garlic, imported from China, I was shocked. California has the best soil in the world, and I am offered garlic from China? How could it be cheaper?
California also has stricter labor and and environmental protection laws. Land is expensive. Labor is expensive. Regulation is expensive. Taxes are expensive. If you look around your grocery store, often times you'll find cheap commodity foods imported from all over the world even if the local climate is able to provide them.

Last edited by Reply; 02-15-2014 at 01:54 PM.
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Old 02-15-2014, 03:02 PM
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For example:
1 - 10,000 orders are individually packed and labeled at mfg by automated system
2 - Entire group is shipped as one shipment to destination country including handling customs
3 - In destination country the packages are individually inducted into that carrier's network (or a partner's) and delivered
As I posted earlier, this is what happened in my most recent instance. That was China Post out of Guangzhou. (A lot of stuff originates out of Guangzhou. A lot.) I think places like Zenni (glasses) does this as well. But two earlier purchases were HK post and were sent individually according to tracking.

While labor is cheap in that area, it's not free. Plus you have warehouses, office space, computer and mailing equipment, etc.

I just don't see how they do it.

Shipping large, comodity products is really cheap now. Hence, The World Is Flat. And it even doesn't have to be overseas. I am also amazed I can buy a ten pound bag of Idaho potatoes for a couple bucks and know what's involved. I've been on potato farms in that area. I can't conceive of the farmers themselves making money on this, let alone the wholesaler, shipper or store.

But small, cheap, one-at-a-time items are an entirely different level of amazement.
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Old 02-15-2014, 04:01 PM
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I can understand electronics, very cheap, from China. They are labor intensive products. But when, at the store, I saw garlic, imported from China, I was shocked. California has the best soil in the world, and I am offered garlic from China? How could it be cheaper?
I live in Melbourne, Australia.

A couple of days ago I bought a 48oz jar of minced California garlic for about $5 Australian.

So, Californians grow garlic, process it, and ship it Australia; then buy Chinese garlic for their own consumption.

And make a profit on the deals?

Amazement!!!!
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Old 02-15-2014, 10:29 PM
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Originally Posted by Monty View Post
No. I'm pointing out something mentioned in this thread already: HK Post is not China Post. And one of your links itself repeats the error.
They actually seem to be talking about both China and HK Post:

Quote:
Originally Posted by Link 1
The U.S. Postal Service has initiated a new service with Hong Kong Post that is structured to foster growth in e-commerce. The new ePacket service expands the array of options offered to e-commerce merchants in Hong Kong seeking to reach consumer markets in the United States...
Quote:
Originally Posted by Link 2
The U.S. Postal Service entered into a deal with eBay and China Post last year to help Chinese sellers send small packages to the U.S. in a much shorter period of time than regular international delivery services. eBay revealed that the agreement has led to 30,000 parcels a day sent from its sellers in China, with package-tracking included.

Nearly 40% of eBay sellers in China are using the ePacket service to ship to the U.S., with over 80% of items delivered in five to 10 days. Upon arrival in the U.S., these shipments are processed as domestic First-Class Mail, with a one to three-day delivery standard. According to the original announcement, "Sellers in China using the shipping platform through eBay GC are expected to ship small items such as cellular telephone accessories and electronics weighing up to 4.4 pounds (2 kilos), with most in the range of 13 ounces and under."

The service offers local pick-up service and label printing, coupled with online tracking and pre-customs declaration for a 7- to 10-day guaranteed delivery period and at a 30-50% discounted price compared with many equivalent services.

eBay also revealed it has launched e-Express, an exclusive premium shipping option for Hong Kong-based eBay sellers in partnership with Hongkong Post and the U.S. Postal Service.
Where is the mistake you think you saw?

Quote:
Originally Posted by Monty View Post
What snark?
This.

Quote:
Originally Posted by Monty View Post
China Post is not Hong Kong Post. The post office in Hong Kong is, unsurprisingly, Hong Kong Post. The post office in mainland China, again unsurprisingly, is China Post. Once again: they are not the same entity.
My bolding. Was that really necessary especially given the fact that is a minor point compounded by the fact your basis for complain appears to be wrong as well?
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Old 02-16-2014, 02:54 AM
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what the op describes still doesn't make sense. Why would the USPS go out of it's way to do business in China when they receive virtually no revenue? A first class letter weighing 5 oz would cost $1.82 coast to coast. Not sure what batteries weigh but probably more than that. It sounds like we're shipping the batteries for free which really means we're paying for it when we buy domestic postal services. We're subsidizing the cheap labor in China with free delivery.

Last edited by Magiver; 02-16-2014 at 02:56 AM.
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Old 02-16-2014, 03:12 AM
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what the op describes still doesn't make sense. Why would the USPS go out of it's way to do business in China when they receive virtually no revenue? A first class letter weighing 5 oz would cost $1.82 coast to coast. Not sure what batteries weigh but probably more than that. It sounds like we're shipping the batteries for free which really means we're paying for it when we buy domestic postal services. We're subsidizing the cheap labor in China with free delivery.
Maybe I'm misunderstanding your post, but the USPS is not doing business in China. As jtur88 mentioned in the second post, countries that are members of the Universal Postal Union are required to deliver mail that has been posted in any other member country.
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Old 02-16-2014, 03:41 AM
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Maybe I'm misunderstanding your post, but the USPS is not doing business in China. As jtur88 mentioned in the second post, countries that are members of the Universal Postal Union are required to deliver mail that has been posted in any other member country.
read the links above regarding USPS.

And no matter how you parse the words we're still delivering their freight for free. Mentioning the Universal Postal Union agreement doesn't change that. when you look at millions of transactions that adds up quickly.
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Old 02-16-2014, 03:55 AM
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Just like an American mail sent from the US to China must be delivered by Chinese Postal Service the final leg for "free" once it gets to China. That's the whole point of the UPU. A country is free to opt out of sign a separate treaty with the country in question if it thinks it's getting a raw deal.
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Old 02-16-2014, 08:40 AM
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what the op describes still doesn't make sense. Why would the USPS go out of it's way to do business in China when they receive virtually no revenue? .
I explained that above. Every country in the world is signatory to the Universal Postal Union treaty, which obliges them to handle all mail the same, regardless of what country received the revenue from the original affixed postage rate. Tibet was the last country to join the UPU (before annexed by China). Before that (in the 1920s), a letter mailed to Tibet would not be delivered unless it also had Tibet stamps on the envelope. The USA delivers mail from China reciprocally, because we expect the China post office to deliver mail that Americans send there.
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Old 02-16-2014, 08:43 AM
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The basis for my complaint is that China Post and Hong Kong Post are different entities. Since China Post doesn't govern HK Post, I'd have to say that's a pretty darn good basis.
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Old 02-16-2014, 09:14 AM
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A local bar sells Made-In-China lighters for a dollar a piece. The bar buys them assorted, by the hundred, for fifty cents a piece. They are refillable lighters, with features like laser pointers or flashing lights, or colored flames. Amazing.

Last edited by kayaker; 02-16-2014 at 09:14 AM.
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Old 02-16-2014, 09:56 AM
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Originally Posted by Monty View Post
The basis for my complaint is that China Post and Hong Kong Post are different entities. Since China Post doesn't govern HK Post, I'd have to say that's a pretty darn good basis.
Yes, they are different entities. Both of which seem to have subsidizing shipping, and both if which are in fact Chinese.

My objection was your tone and the fact that you implied, and later directly stated, the links were confusing the two. They do not appear to be doing that. You also don't seem to be questioning the substance at all; rather just pointing out a minor misstatement on my part. I should have said, "US (USPS) and China (HK Post & China Post)". My bad. That said, I doubt anyone was confused given the links seems to get it right.

What exactly needed clarification beyond that, or invited your condescension?
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Old 02-16-2014, 11:29 AM
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what the op describes still doesn't make sense. Why would the USPS go out of it's way to do business in China when they receive virtually no revenue?
It's better to get some revenue (which they are, it's not for free) and fill their network than have excess capacity.

They have been closing distribution facilities due to lower volume due to shifting conditions in the marketplace.
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Old 02-16-2014, 12:11 PM
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I have three different orders from three different Chinese eBay merchants. All three just got processed through a USPS facility in Chicago, directly from China:

Processed Through Sort Facility

Feb-12-14, 14:49 PM, ISC CHICAGO IL (USPS)
Origin Post is Preparing Shipment
Processed Through Sort Facility
Feb-09-14, 01:10 AM, GUANGZHOU EMS
Acceptance
Feb-08-14, 16:15 PM

Three days from China.
  #33  
Old 02-16-2014, 03:23 PM
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*UPDATE*

Yesterday I received another product from Hong Kong. An AC USB charger, and a DC (car port/cigarette lighter) USB charger and 2 USB cords.

It was 99 cents with free shipping. But the weird thing is, the package required a signature.

That tends to cost more. How did they do all that for under a buck?
  #34  
Old 02-16-2014, 03:39 PM
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Quote:
Originally Posted by Fuzzy Dunlop View Post
U.S. companies, especially big box retailers, can charge massive markups on cables that cost less than a dollar to make, because there are so many unsavy buyers. The kind of people who buy cables from Best Buy or Staples aren't in a good position to realize how massively overpriced they are, but there are lots of those people out there. Those people also aren't likely to chance buying a Chinese non-brand cable for 1/15th the price.
Well, the "brand" cable they buy at Best Buy or Staples usually is Chinese, too, and not necessarily of any better quality than the one they could get on Ebay.

I think cell phone outlets are where this is especially obvious. People will be lured in by a free phone, thinking they're saving so much money. Then they not only commit to an overpriced two-year contract, but they also buy the ridiculously over-priced accessories (cases, screen covers, cables, chargers, etc.), which are so prominently displayed in their shiny "brand" package. These things are all made in China.
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Old 02-17-2014, 12:02 PM
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The shipping question is easy, economy of scale.

ALL of these sellers have very long windows for delivery to the US, that allows those ear buds (I recently bought a 6 pack for 3.99 shipped) to be shipped in quantities counting in the TENS or even HUNDREDS of THOUSANDS.

So lets say your shipping portion of that $0.99 cent product is a dime, that equates to several thousand dollars to ship that single container of ear buds on a cargo ship carrying thousands of those containers.
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Old 02-17-2014, 12:09 PM
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Originally Posted by chargerrich View Post
The shipping question is easy, economy of scale.

ALL of these sellers have very long windows for delivery to the US, that allows those ear buds (I recently bought a 6 pack for 3.99 shipped) to be shipped in quantities counting in the TENS or even HUNDREDS of THOUSANDS.

So lets say your shipping portion of that $0.99 cent product is a dime, that equates to several thousand dollars to ship that single container of ear buds on a cargo ship carrying thousands of those containers.
That's what I originally thought too, but I don't think that's the case. For the above to happen you'd have to have someone in the U.S. repackaging and mailing out the individual orders to the final locations. But's that's clearly not happening because some of the posters mentioned receiving packages that are individually marked with Chinese postage, with direct delivery to their US addresses.

Also, note Gaffa's post above, in which s/he states that the package took three days to arrive in Chicago from China, based on tracking info. That would be some fast cargo ship.

Last edited by dofe; 02-17-2014 at 12:10 PM.
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Old 02-17-2014, 12:37 PM
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Quote:
Originally Posted by dofe View Post
Also, note Gaffa's post above, in which s/he states that the package took three days to arrive in Chicago from China, based on tracking info. That would be some fast cargo ship.
Maybe they're loading containers on cigarette boats? Or hovercraft?

eBay is keeping the USPS alive at this point. They have such a good "last mile" delivery system that half the stuff I get that originates as a FedEx shipment is actually delivered by USPS. And didn't I read that Amazon is building fulfillment centers next to all these USPS facilities, and there is talk of reviving Sunday delivery by USPS specifically for Amazon?

Last edited by gaffa; 02-17-2014 at 12:40 PM.
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Old 02-17-2014, 12:41 PM
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Great thread! I always wondered how international mail was delivered. Because of this thread I learned of the Universal Postal Union.

http://en.wikipedia.org/wiki/Universal_Postal_Union

Quote:
The UPU established that:

There should be a uniform flat rate to mail a letter anywhere in the world
Postal authorities should give equal treatment to foreign and domestic mail
Each country should retain all money it has collected for international postage.
Quote:
After the foundation of the United Nations, the UPU became a specialized agency of the UN in 1948.[8] In 1969, the UPU introduced a new system of payment where fees were payable between countries according to the difference in the total weight of mail between them. These fees were called terminal dues. Ultimately, this new system was fairer when traffic was heavier in one direction than the other. As a matter of example, in 2012, terminal dues for transit from China to the USA was 0.635 SDR/kg, or about 1 USD/kg.[9]
Ignorance fought! Thank you!
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Old 02-17-2014, 01:08 PM
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Originally Posted by harmonicamoon View Post
Great thread! I always wondered how international mail was delivered. Because of this thread I learned of the Universal Postal Union.

http://en.wikipedia.org/wiki/Universal_Postal_Union

Ignorance fought! Thank you!
Thanks for posting that. My interpretation of it is that the Chinese government is keeping the price of mailing things to the US artificially low and paying the difference between what it collects and the actual costs to the UPU.
  #40  
Old 02-17-2014, 03:50 PM
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Originally Posted by chargerrich View Post
The shipping question is easy, economy of scale.

ALL of these sellers have very long windows for delivery to the US, that allows those ear buds (I recently bought a 6 pack for 3.99 shipped) to be shipped in quantities counting in the TENS or even HUNDREDS of THOUSANDS.
While some things are bundled in some way, many aren't. Like I've said, at least two things I've bought that were mailed via HK post were individually shipped. And arrived in less time than it would take a container ship to be loaded and get a third of the way across the Pacific.

If something is stamped with HK small package overseas mail, they aren't putting it on a cargo ship.

BTW, I can guarantee you that those two items aren't being shipped over in batches of thousands either. Really oddball things that weren't available in local US stores or via regular online retailers. (E.g., Amazon itself doesn't sell them, but affiliates might or might not.) These weren't earbuds.
  #41  
Old 02-19-2014, 12:49 PM
Colophon Colophon is offline
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Quote:
Originally Posted by harmonicamoon View Post
I can understand electronics, very cheap, from China. They are labor intensive products. But when, at the store, I saw garlic, imported from China, I was shocked. California has the best soil in the world, and I am offered garlic from China? How could it be cheaper?
Isn't most of the soil in California now buried under McMansions?
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Old 05-10-2014, 08:05 AM
cnyc cnyc is offline
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The reason it is so cheap is because the US taxpayers dollars are hard at work to subsidize these companies. So we give them practically free postage (you cannot mail a small package locally for what they can to the same zip) and the difference is paid by your (if you are a US taxpayer) tax dollars.

This was agreed to in an effort to help keep unemployment low in China and Hong Kong. The US wouldn't want them to have unemployment as we can clearly see first hand how much damage it can do (the USA is wrath with unemployment).

So, what remaining people in the US are working and paying taxes, they are subsidizing these companies in China and putting the squeeze on more US merchants because they cannot compete.

Brilliant isn't it?
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