how items under 5$ with free shipping makes profit ?

[weldtronics]

I have been looking for an answer for this question and i dont know what to think!

How the hell sellers that sells a 5$ + free shipping are making profit?

shipment is so expensive!

can someone explain?

[iamalwaysright]

It fell off a truck

[candd205]

Shipping from China is subsidized by the government. Shippers from China don't pay to ship.

[inhawaii]

I've seen US sellers doing this as well.

Many sellers don't factor in ALL of their expenses.

They just figure, I bought it for $2 and sell it for $5 and make a $3 profit. 

If they were to total up ALL of their expenses:

Cost of the item: $2

Fees: 75 cents

Shipping: $3.50

Supplies: 50 cents

Any other related expenses: 25 cents

TOTAL COST: $7

MONEY COLLECTED: $5

LOSS: $2

These sellers usually are not around very long. 

[slippinjimmy]

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@candd205 wrote:

Shipping from China is subsidized by the government. Shippers from China don't pay to ship.

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Plenty of $5 / free ship items that are shipped WITHIN the US (sellers may or may not be foreign).

There are some types of merchandise where it's a viable plan, things that can be shipped via Lettermail for example. Other sellers may depend on multiple item purchases that spread the cost of shipping.

Others are just trying to up their volume for various reasons (water down bad metrics perhaps).

And of course just your basic liquidation, something is better than nothing and if you have dead stock it's either make a buck or toss in the trash.

On eBay there are quite a few people who are just here for the entertainment factor, profit is not their motive.

[dnasilver]

or they do not mind having a loss since it will be written off against income. But, based on many questions asked on here, we would go with you that they have no understanding of their actual costs.

[luckythewinner]

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@weldtronics wrote:

I have been looking for an answer for this question and i dont know what to think!

How the hell sellers that sells a 5$ + free shipping are making profit?

shipment is so expensive!

can someone explain?

---

Shipping is not always expensive, and you can't judge a business based on what you see in a listing. 

Are they lying about the item location and actually shipping from China? 

Are they shipping in an envelope without tracking? 

Are most of their buyers purchasing multiple items at a time? 

Are they using Media Mail? 

But there are many guesses we could make. An example would help. 

[2013grotz]

Most cases the ones that are doing it sustainably in the US are selling small items of low value (low weight).

Or doing Media Mail (most all of that has a large number of sellers acting on very small margins anyway, including completely dumping product). 

Or not using tracking because they can send it in a regular envelope more economically.

Or using the Ebay envelope postage.

It just depends on what it is specifically.  Of course, as mentioned, a lot of Chinese sellers are selling stuff at such low prices it's to the point I actually had to throw away some things I obtained just because I couldn't make any money trying to move them here.

You'd have to provide an example to explain more.

[varebelrose]

Depends what the item is...as others have pointed out, if it is from a Chinese seller, their shipping is subsidized by both their government and the USPS. Some items can be sent via LWE (little white envelope, no tracking, just a stamp).

[meme6253]

You Cant!, More than likely you will actually lose money, Why they do it?????????

[m60driver]

There are many possibilities.  Some items cab be placed into an envelope with just a 58¢ stamp.  Sometimes people are just trying clear out inventory, even if it creates a small loss.  Some people are trying to increase their FB number as it does make a difference to many buyers.

I sell some postcards for $3.99.  My cost is negligible and all I have to do is put the postcard into an envelope. with a stamp and put it into the mailbox.  I still net over $2 which is better than just tossing the postcard into the recycle bin.  My total time invested is about 2 minutes so that net outs to around $30/hour.

[fashunu4eeuh]

Some vendors have loss leaders.

[bbravo65]

...cheating in shipping postage...(have seen so many)

...laundering money...

[edition_deluxe_rarebooksllc]

Yeah money laundering $5 at a time, HAHAHAHAHAHAHA

[kh-phdan]

Hello Everyone,

Due to the age of the thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue discussing this topic.

Thanks for understanding!