Meaning all these guys selling small-time stuff on eBay and the like.
I just bought a small metal shoehorn on eBay for a grand total of 80 cents including shipping. (possibly from this guy). And over the years I’ve seen - and sometimes bought - any number of other things at prices whose feasibility is hard to understand.
Granted that the actual cost of something like a metal shoehorn is not very high. But it must cost something. And then there the cost/time in processing orders and shipping. And there’s the cost of shipping things all the way from China. I can’t understand how the guy can even cover his costs, let alone make a living doing it.
Because the cost of living is far lower in China than it is in the developed world. If you can live pretty well (by local standards) on a few bucks a day, then making a few bucks a day is very worthwhile.
China is a notorious hub for stolen and counterfeited goods. The government does nothing to combat the problem because… Why would they?
First, the goods are made in sweatshops at lower cost than comparable American goods. The workers in China live in poverty, have no insurance or other benefits, and work in terrible conditions. This is, by no coincidence, the exact reason that so many manufacturing jobs have moved to China. It is just plain cheaper to make stuff in a country where the poorest workers live in borderline slavery.
Second, ask whether it is black market or counterfeit. Many of the Chinese sellers you see on eBay are selling stuff that “fell off a truck.” Chinese factories often manufacture more units than necessary, and after the customer’s production run is complete they keep the “extras” to sell at lower price.
It’s the cost of shipping that baffles me. I’ve ordered cheap one off stuff from China and recieved it in a couple of weeks at prices that just seem crazy small. I could see getting a deal on a box of 100 USB cables, but one?
Right - shows you how different the currency values are and what a dollar can buy in the rest of the world.
I am curious if anyone has purchased direct from Alibaba.com (the vendors listed there). Using Google image search, I can often find a product from a US retailer on there (likely coming from the same supplier) at huge, huge discounts (jewellry is a great example). I’ve been reluctant to pull the trigger for fear of never receiving the product and not having much recourse, but my understanding is the are the Amazon of Asia and should be fine.
International agreements on postage were created in a way that maked sure third world countries weren’t disadvantaged. Say you’re sending a letter from a country where most people make a small fraction of even a minimum wage US employee. If the USPS demanded that country’s postal service paid them US level postage for letters transferred it would be too costly for the average inhabitant to send a letter to the US. That seems unreasonable, and it wasn’t too costly for first world countries to say “Hey, we’re gonna subsidize letters from your countries to ours, and maybe small packages as well.”
This worked fine until shopping over the internet arrived, but part of the reason getting stuff sent from China is so cheap is that the USPS delivers stuff from China at less than cost due to outdated agreements made when subsidizing the occasional letter or parcel from China was no big deal.
I’ve bought molded silicone battery carriers for approximately $1.38 each with free shipping. Now it makes a little more sense with your explanation about postage.
I think we can pretty much count China as part of the developed world now. It’s the second largest economy in the world and probably heading for first place quite soon.
Another factor is we are often comparing purchasing on eBay vs shopping at retail stores. And there enormous markups in certain areas of retailing. Best Buy for example has a reputation for high markups on electronic cables; department and specialty stores have high markups on fashion clothing…
Labor costs, pure and simple. We want to pay McDonald’s flunkys $15/hr to do something that a trained chimpanzee could literally do. How could iPhones ever possibly be manufactured affordably in an economy like that?!
The last time I visited China I was in a less well off area. My meals regularly costed less than $1 USD, and sometimes as low as $0.25. I ate well. The cost of living in some areas is just really really low relatively speaking.
Shipping is a very small cost, thanks to container vessels.
‘Planet Money’ made tshirts and reported on the experience.
Although there were multiple shipping steps in the manufacture, the costs for shipping to make the shirts and bring them to America was only about 10 cents (on a $12.42 shirt).
OTOH, the “order fulfillment” was $1.79 and the “shipping and handling” (that is, the part done in the US to get the shirt to your door) was $2.26. These were both “in the US” costs, and they were the two single highest cost conributers, adding up to about 1/3 the total costs.
