How do they make any money?????

[Smiffy]

Ordered a couple of angled "banana plug" pin connectors for my surround sound speakers a couple of weeks ago off the bay.
https://www.ebay.co.uk/p/2x-24k-gol...ck-connector/548312509?_trksid=p2047675.l2644
Didn't notice at the time but it's an overseas seller (China) so they are taking their time getting to me. No problem though, I can make do until they arrive.
Thing is, they are 99p with free postage!!!!
Why on earth would somebody in China bother selling these for 99p when the postage must cost as much, if not more than that???
Yes, I know these are knocked out by a factory somewhere for pennies.
But even if they only cost 2p to manufacture, would you bother to send something half way around the world for 97p?????

 

[IanM]

Heck of a margin in percentage terms..... but you need to sell a few million units

 

[Lord Tyrion]

It shows how little a Chinese company needs to make to survive and how difficult it is to compete against Chinese companies as a UK business.

 

[GreiginFife]

That 99p is roughly 9CNY and will be sold at volume worldwide.
Probably cost a fraction of yuan per unit to manufacture.

Like many far eastern suppliers it's all economy of scale.

 

[guest100718]

That 99p is roughly 9CNY and will be sold at volume worldwide.
Probably cost a fraction of yuan per unit to manufacture.

Like many far eastern suppliers it's all economy of scale.

and probably cheap crap. you'll have to buy again

 

[Rooter]

you guys are missing the point, postage alone to china from the UK is 1.02. OK so they will get a better deal, but how much in reality can they get postage for? they have to be selling in the 100's of 1000's!

 

[Smiffy]

and probably cheap crap. you'll have to buy again

I will let you know.

 

[SVB]

I've wondered that.

does anyone know how overseas postage works. If you pay Royal Mail £1 to post your item, when does their work end, at the uk boarder, at the destination boarder / post? Does any of your £1 go to the post service of the destination or is it delivered on some sort of reciprocal FoC basis? What about countries with no nationalised mail service?

 

[GreiginFife]

you guys are missing the point, postage alone to china from the UK is 1.02. OK so they will get a better deal, but how much in reality can they get postage for? they have to be selling in the 100's of 1000's!

No, I pretty much get the point. But the fact remains that these companies will be small margin, high volume businesses. Postage will be on a very low flat rate so even making 4CNY on each unit and globally distributing millions (rather than hundreds of thousands) will return healthy profit.
I run operations for a company that trades on a similar model and it works very well.

 

[SocketRocket]

I doubt if anything much gets posted direct from China. They normally cram Containers with all manner of goods and have them shipped on massive Container ships to UK warehouses.

 

[Imurg]

Are they actually being posted from China..?
As Socket says, they've probably shipped several hundred thousand of these things into a UK distributor who gets the order and ships them 2nd class.
Only making 20p or so each but if you sell several hundred thousand it all adds up.
I've bought ferrules from a, supposedly, Chinese distributor - came next day in a first class stamped envelope.

 

[MarkE]

I've had a couple of car bits in the last week and they were both posted from China (one Hong Kong). Ridiculously cheap.

 

[Lord Tyrion]

Some items will be posted from China. Just because items cost £1 or so to post UK to China doesn't mean it is the same the other way. Things are cheap there, you can't compare like with like.

 

[Deleted member 21258]

Have bought various connectors(speaker) and leads(such as usb and camera leads) at the silly 99p delivered, and amazing all have worked.

A numbers game but still its hard to imagine the distributor can ever make any money as well,