Crazy cheap prices on ebay out of Hong Kong

[Kudoscycles]

There are some products being sold out of Hong Kong that are so cheap that it is questionable how they do it?
I recognise product that I know the price in China and yet these companies can sell one-offs cheaper than the product is sold for in China.
Obviously the initial reaction is that the products are rip-offs but we tested buying one product and the product that arrived is genuine. It came delivered from Hong Kong,it had to be shipped out of Hong Kong,delivered by Royal Mail in the UK.
We are talking about a product that costs £2.95,the Royal Mail delivery cost in the UK is £2.22,so they made £0.73 profit,out of that they had to buy the product,ship it,pack it,pay the PayPal and ebay fees.
There are lots of these products out of Shenzhen,Hong Kong and the Philipines,a glance at ebay reveals loads of examples.

 

[danielrlee]

At the sort of prices you mention, the actual product is almost zero cost. The thing is, in this world, there's no such thing as free - somebody pays. My suspicions tell me that in most cases, it is the workers that pay in the cost of ultra-low levels of financial reward for slave labour.

 

[trex]

our Post Office have agreement with China Post to deliver for free anything that arrives from abroad, it's cheaper for sellers to post from Hong Kong than bulk ship to the UK and pay our Post Office.
Ironic isn't it.

 

[EddiePJ]

I recently bought some of the following lights, which are proving to be very durable and are seemingly putting up with all of my abuse, including mud and hosing down again. It's crazy to think that you can get them for prices ranging from £1.00 upwards including batteries and P&P http://www.ebay.co.uk/itm/121508317138?_trksid=p2060353.m1438.l2648&var=420444679613&ssPageName=STRK:MEBIDX:IT

Another example. 5 sunglasses bags for .99p delivered. http://www.ebay.co.uk/itm/5-pcs-Sunglasses-Eyeglasses-Glas-ses-Soft-Cloth-Drawstring-Dust-Pouch-Carry-Bag-/360667292720?pt=LH_DefaultDomain_3&hash=item53f9722430 These things have proved brilliant for things such as inner tubes, and other cycle spares. At .99p for 5, you can't go wrong.


.

 

[Kudoscycles]

our Post Office have agreement with China Post to deliver for free anything that arrives from abroad, it's cheaper for sellers to post from Hong Kong than bulk ship to the UK and pay our Post Office.
Ironic isn't it.

Daniel,the products are not zero cost,I am aware of the cost prices of some of these items,that £2.95 has a cost price about £2.00,even in massive volumes ex factory in China.
For a British company to import that item,it would have import duty and vat added,plus the cost of import shipping plus the cost of Royal Mail parcel delivery,about £5.00 cost.
Trex,thank you,you have endorsed what I long suspected that shipping from Hong Kong is virtually for free,it's the only answer.
Just don't understand why the Royal Mail delivers at nil cost,the cost of delivering that item in the UK is £2.22
I knew somebody who worked for DHL who managed a division known as direct mailing,they would air ship junk mail to Bermuda,it was then franked there and air shipped back to the UK ,the junk mail that we all find such a nuisance,it was cheaper to do that than post in the UK,hardly green is it !!!

 

[danielrlee]

Kudos, even if the items do have 'cost', I think my point still stands. Somebody pays for the delivery of those products and I am as sure as hell it's not Royal Mail. I imagine WE end up subsidising the cost with inflated domestic delivery prices.

Sorry to get on my 'Red Dan' soapbox, but it stinks of the ever increasing trend of wealth transfer - massive corporate entities amounting huge hoards of money at the cost of common man.

 

[RobF]

Is there some money laundering going on here?

 

[trex]

I've been to Hong Kong a few times. The place is awash with excess stock.
You can find watches, jewelry, consumer electronics and clothing at well below production cost. The reason these guys operate from Hong Kong is that they don't need export licence to trade with foreigners like the factories in Shenzen that supply them.

 

[Kudoscycles]

Kudos, even if the items do have 'cost', I think my point still stands. Somebody pays for the delivery of those products and I am as sure as hell it's not Royal Mail. I imagine WE end up subsidising the cost with inflated domestic delivery prices.

Sorry to get on my 'Red Dan' soapbox, but it stinks of the ever increasing trend of wealth transfer - massive corporate entities amounting huge hoards of money at the cost of common man.

I agree,it appears that Royal Mail is delivering millions of small parcels coming in from Hong Kong,mostly to private addresses at almost nil cost,as they have recently increased all the UK postage costs it appears consumers and businesses are effectively subsidising these imports.
It is becoming an increasing flow of product,more companies,more products,HMRC don't collect duty and vat on any delivery below £15.00 value,this is easily manipulated because nobody can easily check the values,so it's a big loser in revenue that could be collected from our own companies.
For me it's a minor annoyance,the type of product tends to be low value and must be light weight but it must be a serious and unfair competitor to small businesses selling similar items.
I just don't understand why Royal Mail doesn't charge same costs to these imports as they charge on domestic deliveries. Alternatively introduce a £5.00 per kilo UK charge rate and let us fairly compete,but I know they won't do that. I understand why HMRC don't charge the duty/vat on low value but it is the unfair delivery cost which is the major consideration.
KudosDave

 

[Kudoscycles]

Cheap prices from Hong Kong on e-bay,this is the full story....I am told that Royal Mail have a depot at Heathrow which has 2000 plus people sorting through incoming international mail,a lot from Hong Kong...this depot is being funded by Royal Mail with no income from Hong Kong,it is effectively being subsidised by Royal Mail,no wonder they have found it necessary to up our postage costs. The international agreement to handle incoming mail for free is being abused by Hong Kong Parcel service and these Hong Kong sellers,it is getting ridiculous,they are sending toothbrushes and AA batteries through the air mail system,the agreement never intended that.
I have searched through the net to try to find how these very cheap Hong Kong and Singapore e-bay traders are able to sell so cheap. Some who list the product location as the UK are lying and the trading warehouse is actually in Hong Kong or Shenzhen.
I have noticed that the products are mainly light and less than£15.00 in value.
I have been told that Hong Kong parcel service will post to the UK at £5.00 per kilo,a kilo can contain 30-50 lightweight items,maybe only 20p each. Royal Mail parcels UK are committed to delivering any foreign mail free of charge,yes that's correct,a 40 grams parcel- 20p from Hong Kong to a UK private addresses. HMRC do not collect duty and vat on any parcel of less than £15.00 value.
So,a shipper out of Hong Kong shipping say a £2.00 item needs only to add the very low HK parcel rates,that small product may land UK for £2.20,selling at say £3.95 is a profit,not sure how legal that is and surprised that Royal Mail and HMRC don't try to stop it,they both must be losing a lot of revenue.
Compare this with a product bought in from China in bulk,to the £2.00 must be added duty,ship cost in container,Royal Mail postage cost-£2.02 plus vat minimum,,20 per cent vat,profit. That same item would have to sell at about £6.00 to achieve the same profit.
The threshold point seems to be weight max 0.5 kg and £15.00 value but of course if you don't issue an invoice the value can be under declared. Note that some of these traders refuse to issue a vat invoice,they cannot give a vat invoice because they haven't charged any vat.
It only works when the receiving country charges no parcel cost and HMRC don't collect the vat and duty,you have also minimal shipping costs.
But is it legal to ship goods from Hong Kong knowing that HMRC will not collect the vat/duty?
In conclusion the 40 gram product can be shipped for 20p from Hong Kong to UK,that same item will cost £2.42 to post internally in the UK and £3.80 to ship from the UK to Hong Kong.
The Chinese are expanding and are getting crafty as to how to keep the post costs low,sometimes shipping as 2 parts to keep the value below £15.00
The solution is for Hong Kong parcels to charge the same rates as UK Royal Mail but they are collecting the postage monies for almost no effort,Royal Mail are doing all the work....once again we are the mugs of the world. Note these sellers will not ship to any other country I suspect that the parcel service and customs in other countries are not so lax as the UK.

 

[Kudoscycles]

The Postal Service is losing millions a year to help you buy cheap stuff from China.

LOOKS LIKE THE USA HAS THE SAME PROBLEM.
digital alarm clock; $2.50 for a folding knife; $1.88 for an iPhone cable — all with shipping included.

“I can’t believe our government would do this to undercut American sellers to help the Chinese sell more in America,” McGrath said.

Under this decades-old arrangement, which is overseen by an agency of the United Nations and has participation from nearly every country, national postal services give each other discounted rates on international mail under a certain size and weight.

Here’s how it works. Say someone from Germany wants to sends a letter or package (under 4.4 pounds) to Chicago. The German postal service will handle the Germany-to-U.S. leg. After the package arrives in, say, New York, the USPS takes over, delivering it to its final destination.

Countries used to provide this forwarding service to each other for free, but in 1969 an update to this postal treaty called for small fees (called terminal dues) on each mail piece. Since then the dues have grown, and the payment system has become labyrinthine. In most cases, however, postal services still charge each other less than they would charge their own citizens for moving a package across the country.

According to the terms set out in Universal Postal Union treaty, the USPS in 2014 gets paid no more than about $1.50 for delivering a one-pound package from a foreign carrier, which makes it hard to cover costs. [1] The USPS inspector general’s office estimated that the USPS lost $79 million in fiscal year 2013 delivering this foreign treaty mail. (The Postal Service itself declined to provide specific figures.)

In an effort to ride the e-commerce boom, the Postal Service signed a dealin 2010 with China’s state carrier to sell a special service for small packages entering the U.S. For a small premium, the USPS offered tracking and delivery confirmation, an essential feature for online retailers, as well as expedited shipping.

The Postal Service plainly hoped to grow its Asia presence. One official said in a press release at the time that the arrangement “holds great potential for increasing international package volumes for the Postal Service.” In 2011, the Postal Service announced a similar deal with Hong Kong’s postal carrier. The press release said that the move “solidifies our role as a key supplier in global commerce.” Singapore Post joined in 2012, and Korea Post joined in 2013.

The USPS offers this service, called “ePacket,” to foreign postal operators looking to increase global trade with the United States, spokeswoman Darlene S. Casey said in an e-mail. It has proven popular. Between fiscal years 2011 and 2012, China nearly tripled the number of packages sent under this program, from 9.5 million to 26.8 million. Revenues quadrupled. Casey also noted that the USPS relies on business income, not tax dollars, to fund its operations. (It lost another $5 billion last fiscal year.)

But this has still been a money sink for the Postal Service. In 2012, USPS was paid only 94 cents on average for each piece of Chinese ePacket mail, according to a February report from the Postal Service’s inspector general’s office. That report estimated that the Postal Service was losing about a dollar on each incoming item, adding up to a $29.4 million net loss in 2012.
I wonder how much money our postal service is losing each year shipping this cheap stuff out of China,we are paying for it in our post charges!!
KudosDave

 

[danielrlee]

It wouldn't surprise me if Royal Mail was sold off to help facilitate this sort of arrangement. I am left wondering why we are really surprised by this situation. It is widely known that the 'new money' is coming from China and I have no doubt that the individuals that make up our government are keen to fill their pockets by cozying up to Chinese corporations.

Whatever the question, the answer is usually "follow the money".

 

[trex]

Universal Postal Union was created a long, long time ago (1874).
The scheme was meant to help developing countries to keep cost of stamps affordable to the locals to send letters to loved ones living in another country. The system is abused by every country, even by EU members, so it should even out eventually.
I have noticed recently that Hong Kong sellers bulk ship to Germany, then using German Post cheap bulk postal service to send to the UK.

 

[jonathan75]

It wouldn't surprise me if Royal Mail was sold off to help facilitate this sort of arrangement. I am left wondering why we are really surprised by this situation. It is widely known that the 'new money' is coming from China and I have no doubt that the individuals that make up our government are keen to fill their pockets by cozying up to Chinese corporations.

Whatever the question, the answer is usually "follow the money".

No it isn't, not everything is economically determined, we live in a political society, not an economic one, where the state is run with the object of serving the public good, of actual voters, not of other countries. That is admittedly the ideal but it is much more sacred than you realise.

The reason RM was sold off is AFAIK because the state was not capable of the kind of plain meanness which is necessary for RM to modernise and compete.

These arrangements regarding free postage are reciprocal :it so happens that nobody in China wants British goods.

 

[shemozzle999]

These arrangements regarding free postage are reciprocal :it so happens that nobody in China wants British goods.

As quoted on the RM website

"Our people at Heathrow Worldwide Distribution Centre process both export and import mail to and from the UK. We also arrange the transport of all export mail to – and delivery by – overseas adminstrations. HWDC handles around 8 million export mail, and 9 million import mail every week"

 

[flecc]

HWDC handles around 8 million export mail, and 9 million import mail every week"

That 8 million will be the non-working or incorrectly sent items I suppose?
.

 

[Hobbehod]

This is interesting as I have wondered for sometime how ebay sellers in Hong Kong were able to sell and mail products to UK so cheaply. This wondering started a few years ago when I bought an iphone case for a total price, including postage, of 1p. I think it took a couple of weeks to arrive but to my surprise arrive it did. I then bought another but the price had risen to an extortionate 6p!

 

[shemozzle999]

One of the 9 million was 50 hall sensors for £5 delivered - and yes they do work

I have paid the producers of the product the real world price and not supported the global inflated price which helps only the middlemen who rarely contribute anything but cream off a healthy profit for doing nothing.

 

[Scimitar]

Years ago, I read that the Chinese government were subsidising small packet mail costs. If you tie that in with the Postal Union arrangements, it's not surprising that stuff gets here (and I mean UK / Ireland) for next to nothing, or indeed, nothing.
However, things have changed on the AliExpress site in the past year - much of what was coming for free is now for a cost, so I suspect the threshold for free mail has risen, and as small manufacturers start to do better and become more established, perhaps they have more of a customer base for repeat orders that might be willing to pay an extra few bucks for the widgets, if they know they're of good quality.

 

[Deleted member 4366]

The Royal Mail still makes a lot of revenue from these foreign sellers. Don't forget that for items over £15, they collect the duty, and charge £10 to £15 on top of the duty every time they do that.