A free shipping mystery
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A free shipping mystery
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Re: A free shipping mystery
#2I sent a letter from Japan to Canada for 70 cents. Sending the same letter from Canada to Japan would cost at least $2.50
China must simply have cheaper shipping rates, obviously not 3 cents, but probably a fraction of what you are used to spending.
Re: A free shipping mystery
#3I'd bet the short obvious answer is that it doesn't cost them anything to ship small, lightweight products like this.
The plane was already flying from China to wherever, filled with AliExpress merchandise. They may have paid for the whole plane instead of just by weight. So adding this product didn't add any tangible extra weight or cost.
Then the mail carrier or whoever is already going on that route. I doubt he gets paid per package, so adding another small package is no big deal and doesn't add extra time/cost.
Unless someone is ordering 1million buttons, then the weight starts to add up. But then so does the cost of the buttons, which at that point would cover the shipping.
I'm generalizing a bit since I don't know the specifics of the shipping industry. But this makes sense to me.
Re: A free shipping mystery
#4The chinese postal system offers extremely low government subsidized rates. This isn't just Alibaba, almost everybody shipping out of china offers free shipping.
http://www.ems.com.cn/mainservice/ems/e_guo_ji_e_you_bao.htm...
for reference 6RMB=0.91 USD
Larger parties are able to obtain even lower rates.
Re: A free shipping mystery
#5China subsidizes shipping for domestic businesses either a) explicitly as a part of economic policy, or b) implicitly/de facto via corruption.
In other words, for the business selling you the item, shipping is free. It's the Chinese citizen/taxpayer that foots the bill. This shouldn't be surprising since China, eg, is notorious for devaluing their own currency as a means of boosting exports. This is effectively a tax on the greater populace for the benefit of their manufacturing sector.
Re: A free shipping mystery
#6I am 90% certain that a majority of international dealing Chinese vendors simply use counterfeit postage.
Re: A free shipping mystery
#7The secret is government subsidies. Not just from China to Chinese businesses either. Some driven by the UPU program through the UN[1], as well as individual receiving country's programs, like the "ePacket" program where US bound shipments from China get artificially low rates from the USPS.
[1]http://fortune.com/2015/03/11/united-nations-subsidy-chinese...
Re: A free shipping mystery
#8I am 90% certain that a majority of international dealing Chinese vendors simply use counterfeit postage.
I was under the impression that there is a yearly accounting process that occurs between countries that accept mail from each other. So, while the counterfeit postage would allow the mail to be delivered, questions would eventually be asked.
Re: A free shipping mystery
#9Couldn't this just be a variation on the classic loss leader sales strategy? It also reminds me of what Amazon originally* did, get someone to sign up for an account, buy a widget at or around cost, ship for free, and then make the money back on the more expensive larger items as you become the "go to" for whatever someone needs.
*I say originally, as my experience with Amazon has been on a downward trend for at least the last two years.
Re: A free shipping mystery
#10It's a combination of subsidies in China [2] and really low Universal Postal Union rates for terminal delivery from China to the US.[1] Terminal delivery in the US is about $1/Kg. Market rate from Shentzen to Long Beach to ship a container is about $1200 right now.
[1] http://fortune.com/2015/03/11/united-nations-subsidy-chinese... [2] http://cep.lse.ac.uk/pubs/download/cp396.pdf