Have you ever wondered how do eBay sellers from places like Hong Kong & China make profit?
Lots of items that are being sold in eBay everyday cost only US$1.00 and for most of the cases, shipping is free of charge. How can these sellers make profit?
FutureHandling has examined the route of the main products that cost about $1.00 ~ $3.00 and are currently popular among buyers of auction sites and deal-of-the-day sites.
Items like screen protectors, styluses, cell phone cases are after all just pieces of plastic and they cost less than 10c for the eBay seller when bought in bulks. The cost of shipping would be another 10c, so the profit for a US$1.00 item would be about 80c of dollar, not considering the fess that sellers must pay to eBay.
But the question remains, how can such buyers pay only 10c on shipping?
The thing is that for sites like eBay, Amazon market place, Taobao, Yahoo Auctions (HK, Japan, Taiwan), most of these items are shipped directly from places like China and Hong Kong.
The cost of shipping these items are only a few cents of US dollar for the seller. It is actually cheaper, for example, to ship something from Hong Kong to Melbourne, than shipping the same thing from Sydney to Melbourne. Thanks to a rule made by the Universal Postal Union that stipulates that each country should retain all money it has collected for international postage. Thus, the money that the Chinese seller pays to China Post, remains in China. The package would travel all the way from China to Sydney in this example, and the shipping from Sydney to Melbourne would be done by Australia Post for free.
Interesting, right? Actually, some international sites of Groupon also ship from countries like Hong Kong and China. Another interesting thing is that sites such as the Apple Store, ship products like the iPhone from Hong Kong to their customers in the US.