How are companies able to sell/ship products from China so cheaply?

[Aussie30001]

@harmonicamoon

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!!!

[brickbacon]

@Monty

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:

@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…

@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?

@Monty

What snark?

This.

@Monty

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?

[Magiver]

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.

[dofe]

@Magiver

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.

[Magiver]

@dofe

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.

[dofe]

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.

[jtur88]

@Magiver

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.

[Monty]

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.

[kayaker]

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.

[brickbacon]

@Monty

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?

[RaftPeople]

@Magiver

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.

[gaffa]

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.

[pkbites]

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?

[guizot]

@Fuzzy_Dunlop

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.

[chargerrich]

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.

[dofe]

@chargerrich

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.

[gaffa]

@dofe

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?

[harmonicamoon]

Great thread! I always wondered how international mail was delivered. Because of this thread I learned of the Universal Postal Union.

Universal Postal Union

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.

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!

[gaffa]

@harmonicamoon

Great thread! I always wondered how international mail was delivered. Because of this thread I learned of the Universal Postal Union.

Universal Postal Union - Wikipedia

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.

[ftg]

@chargerrich

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.