Another How Do eBay Sellers Ship So Cheap ?

Last year I shipped a bottle of wine to a friend in the same state (regional)I got quotes from aust post, sendle etc,
Quotes were something like $18-$22 , I tried other states just to compare and they were similar , surprisingly aust post was the cheapest

A few daya ago I purchased 2x2kg weights on ebay expecting them to come from China and take a month, they arrived from Sydney, shipped via aust post in 2 days.
And it cost me a grand total of $12.63.
I know sellers get business discounts with aust post (I had one too years ago)

Covering ebay fees, PayPal fees, delivery fees , and shipping fees

How do they do it?

Edit:
https://www.ebay.com.au/itm/172657288208?hash=item28332d2410...

Item in question (seems to have had a $2 price rise)

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Comments

      • +4 votes

        Smoke and a pancake

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          Shigar and a Wafful

  • +2 votes

    There are all sorts of wrinkles in the Auspost price book.
    There is a max charge up to 20kg per metro area ($12 rrp last time I looked), so some sellers have distribution centres in every capital city. Similarly, some courier companies, like CouriersPlease have flat rates in certain areas.
    If the seller is doing a lot of volume these might well be $6 per delivery.

    The real mystery to me is how they can make, wholesale ship and warehouse the product for the other $6.

    • +3 votes

      We as a manufacturer, give some incentives to our dealers. For example, if they sell 200pcs for product ABC within the mentioned timeframe, we'll give them 10pcs free of product ABC. So some products are just free of cost for them and which makes 100% profit to them. The 10 free pcs are most probably sold at the low prices and these pieces are mostly which goes on "stock clearance sales".

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        Thanks for the insider insight. Do you find that this strategy maximizes 1. sales 2. gross profit for the manufacturer?

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          TBH, it does. It actually works well for both, the manufacturer and the dealers.

    •  

      OP's delivery was from AU to AU.

      • +9 votes

        Unless WA is involved, then it's intergalactic.

  • +2 votes

    Honestly have no idea, I buy cheap PC parts and cables shipped from China, price delivered is less than postage (within my own state) and packaging costs here.

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      I might be wrong, but labour costs might be cheaper in China than here?

      • +1 vote

        It still required delivery here. Same cost market.

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          See the upu.int link above for why international small packets are cheaper than local mail.

  • +1 vote

    Maybe it's not the shipping that's cheap, it's the product.

    Chances are that if the product + shipping seems too cheap, it's because the product hardly cost anything to manufacture.

    • +1 vote

      Even if the product was free, the shipping costs are still higher than the total costs. So there's a logical problem. As others have noted, even IF you get the item in wholesale and to your warehouse, you still NEED to post it from that locale to somewhere else within Australia. The (probable) explanation is that some businesses are allowed to ship items around Australia through AusPost (or perhaps other couriers) for FREE… or next to free. This then leads to a problem as, why is the price to the public so large. Surely it's not ethical.

      It even leads to other issues, like:
      you buy a $10 item that is worth roughly $10 (slim profit margins), and you also get free shipping. The item is found faulty and seller requests you to send the item back for a refund. You ship the item back and it costs you $20. Seller refunds you the $10 but refuses to refund you the $20 shipping fee. You now have NO item AND you are $20 at a loss, not to mention the time and effort that was also involved. Otherwise, the seller reimburses you $20, and now the seller needs to get the faulty item replaced by the OEM which wastes his time and effort, and he is also at a $20 loss.

      …if the cost of shipping was more equal between the two, this wouldn't be much of a problem:
      The item costs $5 from OEM for the seller, shipping costs $5 for seller, and they are taxed $1 for the sale. The item is instead sold for $12, again, slim margins. If the buyer needs to send the item back, postage for him is priced higher at around $10. AusPost still makes profit, and probably higher now with this model. When buyers need to ship items back, they are out of pocket for less, or the cost-of-doing-business for the sellers (tax write-off ?) is much more manageable now.

      Now, I don't know exactly how things play out, so take the above with a pinch of salt.

  •  

    bulk discount ? shipping cost included in the item price?

    • +1 vote

      bazinga!

  • +2 votes

    OP I just saw your ebay link. We manufacture the similar product and it costs us less than $1 to manufacture in bulk (2000 Pcs of 1KG Strap)

    • +1 vote

      All I can say is that is frigging amazing
      How you can get them shipped to aus so cheap is amazing as they are heavy things

      • +1 vote

        They are shipped in bulk with all the other items and all the shipping is done via sea, which is pretty cheap. A simple calculation is like, for example you ordered 200pcs of this strap and the shipping cost was $50. So the each item will bare the $0.25 shipping cost.

        Actual cost of the product is for example: $0.65
        Add shipping on that: $0.25
        So the total cost to the dealer is $0.9.

        • +1 vote

          Sea shipping from china is cheap but not that cheap. I did it before. From memory, it worked out to be about $2 per kilo for 300kg worth of goods plus other fees here and there (pick-up fee, storage, local tax etc).
          Of course it will be cheaper shipping a whole container, but never $0.25 a kilo delivered from door to door!
          Looking at that link, what OP bought now costs $23 which makes more sense. Ebay sellers sell at a loss sometimes to bump their listing to the first page. It isn’t easy money selling online anymore since every other c*** is doing it now.

          • +1 vote

            @Ridiculous Panda: You're absolutely right. As I mentioned, those numbers are just used as simple example to describe my statement.
            Secondly, I'm not sure about shipping from china, as we don't manufacture anything in china or ship from china.
            We manufacture in different country.

  •  

    China

  •  

    Business and volume pricing.

  • +1 vote

    A small Auspost satchel is 25c and you can put up to 5kg for $9.15.

    I sell fasteners and 100 M12 screws are 500grams which is $9.15. I still charge $9.15 postage for 950 screws (the packaging bumps 1000 over the 5kg limit).

  •  

    Postal union arrangements?