BTW, I’ve also read on eBay forums that China subsidizes the shipping, as well. Can anyone go into detail or provide authoritative links regarding that?
Reduced or non-existent listing fees.
Reduced or non-existent end of sale fees.
Top rated discount for item price, but of course, not on shipping.
Paypal’s transaction discount for China (10 cents a transaction vs 40 cents for most domestic customers)
Postage cost in China is only to USPS depot, all packages from there are free.
So, if I sell an item for 99 cents plus $3.00 shipping, my eBay fees are 15 cents to list (per month), 34 cents in end of auction fees, 45 cents in paypal fees, the label is 3 cents and the packaging is 22 cents, and I pay DHL Global Mail $1.55 to ship the package. $2.74 in costs, I make a buck and a quarter per item.
Now, if I was in China, I'd have free shipping, and price the item at $1.55. My costs: 0 cents for a BIN listing (GTC), 11 cents if I cancel the item. End of auction fees are a flat five cents for items under $5. Paypal charges a transaction fee of 8 cents plus 2 cents per $2, the labels are a half cent each, and the bags are 7 cents if I buy the premium ones. Postage from Hong Kong to the depot is $5 per pickup up per bin (think watermelon bin) plus 18 cents a mile.
So .05 + .10 + .005 + .07 + effectively free shipping = .225 per package (call it a total of 30 cents total for a moderate volume seller.)
I still make my buck and a quarter, though very likely I'm getting MUCH higher sales as I'm undercutting a US based seller by no less than $2.44 each sale. European delivery the seller pays 17 cents per hundred miles from Berlin, Africa is a flat $4.50 for packages under 10 ounces, Asia & Pacific is $2.50, and Australia & Russia are $3.75 - for most countries, full tracking is included.
As for authoritative links, there are none. You open your business in China on eBay, you sell 20 items to someone (say your girlfriend), you get the feedback, and then you make an appointment for an eBay representative to set you up with preferred pricing for both eBay and Paypal.
The ‘fees’ are ‘high’ to some people's visions, $800 per month for an anchor store on eBay with an inventory of up to 100,000 items, $400 per additional 100,000 items. The five cents fee goes against your monthly fee, so if you sell 40,000 items a month, you're paying that $800 fee plus a nickle for each item beyond it. But really, meeting that item number goal is easy.
Once you get above 1/2 kilo, prices for shipping go up dramatically (and you'll see this reflected in the pricing from sellers in China.)
I had an offer from a person in China to manage my entire inventory; I fill up a few sea containers full of product, it arrives there, they photograph it and list it using my name, and deduct the costs and deposit payment right into my US paypal account. Fee per item listed was 27 cents, per item sold was 47 cents, if I put forward $100,000 in seed money, I could expect to pocket $273,600 in the first year.
Trust me when I say I really should have done it. Oh, and the best parts... Negative feedback has to reach 10 percent before it becomes an issue, with every negative feedback removed for a package delivered within 21 days to the US, 30 days to Europe, 45 days to Africa or 75 days to South America & Mexico.
Amazon charges about twice what eBay does to those in China (but they get $3.00 in shipping) with A-Z resolution covered so long as the item is available for online tracking within 72 hours of purchase.