Are they selling at a loss?

[aus_boostdeal]

Hi I found that some people are selling very cheap items that can only be delivered with parcel instead of letter.

Like this one $7.98 per light bulb.

Auspost standard parcel fee is $9.3, not to mention listing fee and room for profit.

What are these people doing? Assume sourcing costs is $0.001 , it still doesnt make sense.

[padi*0409]

Some companies will sell at a loss to encourage buyers to buy more than one item, but taking a look at their Negs and Neutrals I wouldn't buy from them in a fit.

[sandypebbles]

I would certainly do a Flock Of Seagulls and run so far away

Shocking

[jellybirddesigns]

If they have an Aus Post business account and are sending at least 320+ parcels per rolling 8 week period, they can get up to 40% discount on postage if sending to a capital city. Instead of paying $9.30, they will pay $5.58. It might be a game of averages for them.

[aus_boostdeal]

But they dont specify different delivery charges for metro vs rural.

[jellybirddesigns]

They don't need to specify anything as they are offering "free shipping" - only they will know what type of discount they get when they lodge the parcel at the counter.

We can only speculate on how this business model works for them, but I'm sure that they have worked out that the average person buys several items, so overall the transaction becomes profitable.