Author Topic: How do chinese sellers make money  (Read 4329 times)

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Offline nvidiaTopic starter

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How do chinese sellers make money
« 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 
 
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Offline cdev

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Re: How do chinese sellers make money
« Reply #1 on: November 02, 2018, 12:23:57 am »
Probably at the beginning they just sell based on cost plus nothing to build their reputation up, so its entirely possible they may even lose money at the beginning. I think they may also get very low cost or free mail - it must be very cheap.

Also, their cost of living and wages may be very low compared to ours.

Also just like elsewhere, many online businesses are likely just that one person.

One person may also run a bunch of ebay stores that specialize in different things too.

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
$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
"What the large print giveth, the small print taketh away."
 
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Offline thm_w

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Profile -> Modify profile -> Look and Layout ->  Don't show users' signatures
 
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Offline audiotubes

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Re: How do chinese sellers make money
« Reply #3 on: July 19, 2023, 07:35:59 pm »
I guess everything is subsidized. It is hard to imagine any other business model based on the prices of goods and shipping.
I have taken apart more gear than many people. But I have put less gear back together than most people. So there is still room for improvement.
 

Offline aeberbach

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Re: How do chinese sellers make money
« Reply #4 on: July 19, 2023, 08:57:36 pm »
I think one way is that items are not shipped individually. All those eBay sellers claiming to be local or having local stock are basically lying, they have a distribution centre and ship from there after a batch shipment from China arrives. Hence the delay of about one week on everything compared to an actual local seller that might ship within 1-2 days.
Software guy studying B.Eng.
 

Offline VK3DRB

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Re: How do chinese sellers make money
« Reply #5 on: July 20, 2023, 02:02:05 am »
I bought a USB to serial converter device delivered to my door from China for half the price of the FTDI FT232R chip alone in 10K volumes. The device has other semiconductors, headers, USB connectors; is well laid out on the PCB. It works on 5V, 3.3V and 1.8V logic and works a treat.
It is possible employees steal chips in China, the chips are fake, the chips are reused, or maybe FTDI provides special prices to the Chinese. My guess is some back alley operator reclaimed the FTDI chips off old boards.
 

Offline johnboxall

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Re: How do chinese sellers make money
« Reply #6 on: July 20, 2023, 02:51:33 am »
Free postage from China.
Very low living and wages costs.
Much, much less red tape and regulations.
Much lower margin expectations.
Profit via volume, not quality and service.
Pay less tax as customer payments received into foreign/HK-based bank account.
 

Offline floobydust

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Re: How do chinese sellers make money
« Reply #7 on: July 20, 2023, 03:04:08 am »
Aliexpress has jacked up prices and jacked up shipping costs - so they aren't so cheap now. Many items are quite expensive, I can actually buy them now in store for less.
 

Online SiliconWizard

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Re: How do chinese sellers make money
« Reply #8 on: July 20, 2023, 04:03:00 am »
Yep, the cheap prices were pre-2020. They have now become outrageous.
 
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Offline Berni

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Re: How do chinese sellers make money
« Reply #9 on: July 20, 2023, 05:15:09 am »
Yep looks like China is slowly loosing those heavily subsidized shipping privileges.

A lot of the products are still dirt cheep, but the cost of shipping them to the other side of the world makes the total price go 3x
 

Offline amir.razzaqi

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Re: How do chinese sellers make money
« Reply #10 on: July 20, 2023, 06:56:23 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

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.
 

Offline BeBuLamar

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Re: How do chinese sellers make money
« Reply #11 on: July 20, 2023, 10:44:40 am »
The Chinese goverment has a lot of money so perhaps they subsidize those business to help them kill off the USA based online businesses?
 

Offline m k

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Re: How do chinese sellers make money
« Reply #12 on: July 20, 2023, 05:04:26 pm »
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.
Advance-Aneng-Appa-AVO-Beckman-Danbridge-Data Tech-Fluke-General Radio-H. W. Sullivan-Heathkit-HP-Kaise-Kyoritsu-Leeds & Northrup-Mastech-OR-X-REO-Simpson-Sinclair-Tektronix-Tokyo Rikosha-Topward-Triplett-Tritron-YFE
(plus lesser brands from the work shop of the world)
 

Offline mendip_discovery

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Re: How do chinese sellers make money
« Reply #13 on: July 21, 2023, 06:30:31 am »
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.
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Offline Berni

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Re: How do chinese sellers make money
« Reply #14 on: July 21, 2023, 06:52:50 am »
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)
« Last Edit: July 21, 2023, 06:54:38 am by Berni »
 

Offline Miyuki

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Re: How do chinese sellers make money
« Reply #15 on: July 21, 2023, 07:29:44 am »
Still have plenty of people willing to work for almost nothing: " around 13% of its population falling below this poverty line of $5.50 per day in 2020" and the big group will be just slightly above this line.
And they will "happily" work double the hours "westerners" do.
Shipping and the entire export business is subsidized.
With the volumes they sell, just a single-digit margin will turn out liveable money
Say they will have a 5% sale margin, it is easy to enough such garbage to stay alive
 

Offline m k

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Re: How do chinese sellers make money
« Reply #16 on: July 21, 2023, 05:25:24 pm »
Maybe yuan is not as cheap as it seems to be.

Current system is pulling USD down, at least a bit.
Advance-Aneng-Appa-AVO-Beckman-Danbridge-Data Tech-Fluke-General Radio-H. W. Sullivan-Heathkit-HP-Kaise-Kyoritsu-Leeds & Northrup-Mastech-OR-X-REO-Simpson-Sinclair-Tektronix-Tokyo Rikosha-Topward-Triplett-Tritron-YFE
(plus lesser brands from the work shop of the world)
 

Offline EPAIII

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Re: How do chinese sellers make money
« Reply #17 on: July 23, 2023, 10:30:11 am »
Seventeen posts have just about covered it. I may have missed it, but the one item that I did not see is no unions.

In short, socialism at it's very best.
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Offline paulca

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Re: How do chinese sellers make money
« Reply #18 on: July 23, 2023, 11:14:39 am »
Aliexpress has jacked up prices and jacked up shipping costs - so they aren't so cheap now. Many items are quite expensive, I can actually buy them now in store for less.

It would seem that AliExpress have been told to adhere to the laws in the countries they are selling in or stop selling there.

You will also notice this has caused about 30-40% of sellers to refuse to ship to certain locations and instead put the shipping to those regions as costing $1000.

For example, when I order from AliExpress, non-excempt items will charge me VAT and duty.
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Offline audiotubes

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Re: How do chinese sellers make money
« Reply #19 on: July 30, 2023, 03:04:04 pm »
Seventeen posts have just about covered it. I may have missed it, but the one item that I did not see is no unions.

You forgot to mention no OHSA, FDA, etc ;)
I have taken apart more gear than many people. But I have put less gear back together than most people. So there is still room for improvement.
 

Online SiliconWizard

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Re: How do chinese sellers make money
« Reply #20 on: July 31, 2023, 11:45:07 pm »
Seventeen posts have just about covered it. I may have missed it, but the one item that I did not see is no unions.

You forgot to mention no OHSA, FDA, etc ;)

The chinese equivalents are actually pretty stringent from what I have experienced. Try selling a product on the chinese market and see how the regulatory part goes. One may suppose that they are being more strict with foreign products. That may be so, but I have no proof that they don't apply the same rules to their own products sold on their own market.

The thing here is that, pretty much like for any country, local regulations to a large extent do not cover what you export. So conformity is all on the importer's shoulders, and many importers of chinese products are, how to say it, a bit oblivious. Of course the Chinese do take advantage of this situation. We do the same when we can.
 

Offline SL4P

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Re: How do chinese sellers make money
« Reply #21 on: August 01, 2023, 03:10:59 am »
Next to no R&D costs
Low labour costs
No documentation or testing costs.
No support
- makes for disposable, copidbgarbage.
Don't ask a question if you aren't willing to listen to the answer.
 

Offline Berni

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Re: How do chinese sellers make money
« Reply #22 on: August 01, 2023, 05:41:49 am »
China does have a lot of requirements on foreign businesses because they want to have as much control as possible. They can already exert a great deal from the CCP over domestic companies, so they are used to being in control.

The government also finds the cheep workforce for local factories useful, so they won't really do anything about the abuse of workers. They are instead busy spraying the dead plantlife around roads with green paint so that the environment looks less destroyed to the environmental inspectors.
 

Online all_repair

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Re: How do chinese sellers make money
« Reply #23 on: August 01, 2023, 05:56:25 am »
Primarily due to over-competitive environment.  No one wants to work so hard for so little if they can.   

It is not something the CCP want to see, and trying very hard to change the low margin culture and setting.  Enjoy the super good deal when you can,  just don't ask for $100 services for a $1 product, and then come crying here for ..............

It is cheap because it is the assembly services they are charging.
« Last Edit: August 01, 2023, 06:09:05 am by all_repair »
 

Offline bookaboo

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Re: How do chinese sellers make money
« Reply #24 on: August 01, 2023, 08:12:11 am »
Chinese exporters get an "Export Rebate" on most products they ship, 9-13%, so that's a big factor.
 


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