eli5: how Chinese E-commerce stores manage to ship for so cheap?


Sometimes these stores manage to ship cheaper than local stores and cheaper than international purchases from other countries (including neighbouring countries, like US). How do they manage to do that?

In: 4

I believe their post is subsidized in some manner, but I’m unsure- my late father frequently bought from them when he couldn’t resist the prices and would ask me this exact question.

There was an explanation about how can prime membership ship for free.

If I remember correctly, instead of employing a fleet of truck drivers to do these small but cross country/nation deliveries, a lot of the smaller packages are loaded onto trucks and shipments that are already loaded with giant boxes and pallets of goods, cutting down on the biggest cost of shipping.

So it’s like filling up a stone filled container with sand.

Once the item is near the destination, the items are then delivered using local delivery methods.

When China became a part of the Universal Postal* Union (UPU) in 1914, China was still officially a developing country. That gave them leeway to settle for lower shipping rates. China also subsidizes outgoing post, making it even cheaper. Bulking orders efficiently further reduces the price.

They heavily subsidize shipping costs to make sellers competitive. It’s impossible to sell a $2 cell phone case to Americans if the shipping is $60