General > General Technical Chat
How do chinese sellers make money
amir.razzaqi:
--- Quote from: nvidia on November 02, 2018, 12:17:44 am ---always wanted to know how chinese sellers make money from selling items so cheap
EG
$0.90usd mp3 players
$6 portable color handheld game loaded with nes games
$1 led flash light
$0.40 usb led light
$1.50 fm radio with built in speaker
i know they don't pay there workers much but still how are they making a profit
--- End quote ---
one of the most money consuming part of production of some thing is related to its design and test, Chinese bypass it by copying and reverse engineering. in fact they steal some part of other factories benefits.
BeBuLamar:
The Chinese goverment has a lot of money so perhaps they subsidize those business to help them kill off the USA based online businesses?
m k:
Regular international postal contract include returns, it used to be so that all small internationals were free.
Then China happened and balance was no more, so others subsidized small China packages.
But production cost is still a mystery, few dollars a day for living is not much and it's multiplying, but still.
On the other hand, millionaires are not growing in trees and bigger money is also multiplying.
mendip_discovery:
I often wondered if the stuff being sold is sometimes the stuff that didnt meet the requirements that the major manufacturers have so it gets sent out for scrap and ends up being used in copy/fake devices. As well as the bits that get pinched etc etc.
Berni:
The Chinese also do the "ghost shift" trick.
After the factory closes the workers sneak in and start up the production line themselves. They use the reject or expired materials to do a production run, take the products with them and sell them themselves. That way they can make more money than what they get payed to work there.
But id say it is mostly the economy of scale combined with the race to the bottom. They produce everything locally using cheep workforce that borders on slave labor. Doing it in such massive volumes makes cost per unit go down and down. China heavily pushes for high productivity, not being concerned if there is actually a demand for the products, if you sell them cheep enough then someone will buy it. Then there is also the Chinese government artificially keeping the value of there currency low. This makes the cheap products appear even cheaper, ensuring that exports are thriving. Since normally having so much more exports than imports would make the countries currency rise as others need the currency to buy those goods (this would eventually make them too expensive for other nations to bother buying from them)
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