Chinese products flooding our market

[garage-door-automation]

As a new seller, I'm frustrated with the amount of Chinese sellers taking all of the best match spots on Ebay.com.au.  I noticed that there were Chinese sellers (thousands of them) selling bracelets (to name but 1) for $1 Buy It Now - including free postage.  Surely this couldn't be possible?  I sent an online letter to Australia post to clarify costs, because my maths says the following:

Taking into account Ebay's final value fee (7.5% for an anchor store) and a paypal charge of 3.4%(for international transaction here in Australia according to the Paypal website) which together add up to 10.9 cents (let's say 11) you are left with 89 cents, minus postage costs (which should be a minimum of 70 cents (same as we are charged surely?) and you are left with a measely 19 cents. The cheapest fee for the smallest letter delivery within China (before it goes overseas) is 0.60 yuan, which is 11 Australian cents. 19 cents take away 11 cents is 8 cents. I'm pretty sure packing materials aren't free, but let's say they cost a conservative 2 cents. That's 7 cents left and you still haven't counted the cost of the wholesaler in China puchasing the item for their inventory -even producing it if they were a manufacturer (but manufacturers don't tend to sell single pieces on ebay, but rather sell massive wholesale lots). Then there is a little thing called profit, which must be taken into account.  

Given that these kinds of transactions would clearly not be profitable if Chinese sellers had the same costs for listing/postage as we do here in Australia(which they most certainly and etically should) and given that there are tens and thousands of these types of products flooding ebay and it's not simply a case of a few crazy weirdos taking a loss, it leads me to my next very serious question - is it Aus Post that is duping us, or is it Ebay? 

[character_parties_aus]

our ebay market share has and will continue to be hammered.  frankly i dont care. ebay is lower margin, higher maintenance and gerneally less profitable than other avenues. if you set up a business on ebay and ebay only and expect continuity you must be more than mad.

[phorum_junkie*]

I would never try and compete with either the Chinese sellers or the many thousands of Australian sellers who buy in bulk from China and sell their items on a pile 'em high, sell 'em cheap basis. It is no different to the likes of Big W competing with the Reject Shop or all the other cheapo stores in shopping centres.

If Chinese seller ever start selling plus size clothes (not the so called 4X size that wouldn't fit a stick insect) then I will have to change my tactics and find something else to sell but compete.........never.

Oh and why thigs are so cheap from China, because their postage is subsidised to the point where it is free in many cases and yes AP have to deliver it without charging but then countries where postage is higher than in Australia deliver your mail without charging you any extra. That is the only way a global postal system could work. 

[robinsonmarineparts]

They don't, that's why we get sluged with higher postage costs.

[clarry100]

Yes... in our particular category we are also up against the flooding Chinese sellers.

We simply do the best we can to offer good old fashioned customer service and very fast postage (which they cannot). If you order from them you will wait 4-6 weeks to receive your item (if at all). And if you have a problem that needs them to communicate to resolve it then best of luck with that.

Quite a few of our customers we have asked about this said they will never buy the same items from the Chinese sellers, that they would much prefer to keep their business in Australia. Even if it means that they pay more. So we work on that marketplace. We are based near Brisbane and about 60% of our customers are in QLD. Maybe that's telling us something about this point. They usually get their items within a day or two not a month or two. Most of the comments on our FB mention the fast postage we provide.

What we would like to see is that the default search filter be set to show items located in Australia ONLY. This would weed them out by default but still allowing the "discerning" buyer to change that setting if they prefer. After all this is ebay.com.AU.

But unless we had an act of parliament we will never get ebay to agree with that one.

We had even though hitting up our local MP about this exact issue but have not gotten around to doing it just yet. But then again when have politicians ever listened to us either unless it means losing votes in a big way.

[kylies*swap*cards*]

You can't compete with them, the Chinese government subsidizes the cost of the postage (to encourage more exports) so it is free for them.  And as for the postage being slower, it's not.  I buy things from Hong Kong with signature all the time and they turn up in 5-6 days for me - Aust Post cannot even do that.  Those countries are well set up for exporting and their government encourages it and our goverment unfortunately does nothing - until they do something about restricting the flood of imports (gst free and costing our postal system to deliver to us) then it will only get worse - especially when ali baba gets going with it's planned direct store set up to rival ebay.

[clarry100]

Yes once AliBaba get going its gonna put pressure on ebay. They are already bigger than ebay and amazon combined.

[ourphonecase]

Well at least most of the stuff is **bleep** because who knows what we can do if it's cheap and excellent quality. That said I ask Chinese manufacturers to make stuff for me all the time. I give them the designs and they make it. The whole place is a gold mine for us that hasn't been fully explored to its full potential.

[highland_cat]

Problem I have is with not Chinese sellers generally, but the ones that pretend to be located in Australia - I think the increasing number of sellers pretending to be Australian, and lying to their customers tends to a. hurt the sellers in the long term, and b. overall damage the reputation of eBay / other sellers, as if you try to look professional and sell new items, people are less trusting that they will have to wait for 6 weeks for it, because you can message these Chinese guys and they'll lie about location. Its not good, but then what do eBay care so long as they get their percent  - pity they couldn't add a complaint about that in their customer feedback area - and NARU the Chinese sellers that did it. But that would be too sensible.

Oh... in regards to using the Chinese to make your own design of goods, just expect everyone else to be sold them too, these and other "suprises" - you need to read this book!

[digital*ghost]

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@3dmonkeywheel wrote:

As a new seller, I'm frustrated with the amount of Chinese sellers taking all of the best match spots on Ebay.com.au.  I noticed that there were Chinese sellers (thousands of them) selling bracelets (to name but 1) for $1 Buy It Now - including free postage.  Surely this couldn't be possible?  I sent an online letter to Australia post to clarify costs, because my maths says the following:

Taking into account Ebay's final value fee (7.5% for an anchor store) and a paypal charge of 3.4%(for international transaction here in Australia according to the Paypal website) which together add up to 10.9 cents (let's say 11) you are left with 89 cents, minus postage costs (which should be a minimum of 70 cents (same as we are charged surely?) and you are left with a measely 19 cents. The cheapest fee for the smallest letter delivery within China (before it goes overseas) is 0.60 yuan, which is 11 Australian cents. 19 cents take away 11 cents is 8 cents. I'm pretty sure packing materials aren't free, but let's say they cost a conservative 2 cents. That's 7 cents left and you still haven't counted the cost of the wholesaler in China puchasing the item for their inventory -even producing it if they were a manufacturer (but manufacturers don't tend to sell single pieces on ebay, but rather sell massive wholesale lots). Then there is a little thing called profit, which must be taken into account.  

Given that these kinds of transactions would clearly not be profitable if Chinese sellers had the same costs for listing/postage as we do here in Australia(which they most certainly and etically should) and given that there are tens and thousands of these types of products flooding ebay and it's not simply a case of a few crazy weirdos taking a loss, it leads me to my next very serious question - is it Aus Post that is duping us, or is it Ebay? 

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Very few, if any, businesses operate on a sale-by-sale basis. Breaking down the (assumed) math on a single sale, for someone else's business, is (with apologies) an extremely narrow way to look at one of their business strategies, because what you can't factor in is how much their general exposure is increased, how much extra traffic and sales they get on other products due to the high prominence of an attractively cheap item, and so on.

I wouldn't be considered a crazy weirdo if I spent $500 on an ad, or an equivalent amount to run a give-away promotion - the $1 free post items are a marketing strategy, and given that sellers have been doing it consistently for years, my guess is that it works well enough for most of them.