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Wed Apr 11 2012 20:53:04

USPS Gives eBay China Sellers Competitive Advantage

By: Ina Steiner
Sponsored Link
Dear Ina,
I am a long time reader of AB blog, and a veteran eBay seller. Recently, there were few blogs on AB blog talked about Chinese sellers on eBay. As a 2nd generation Chinese American, I want to share some of the facts and my personal opinion with you about Chinese sellers on eBay.

Facts:

1) Ship anything from China to U.S, is much cheaper than ship from U.S to China. Let me give you few example: ("China post ePacket" vs "USPS first Class mail International". Actually we are not doing apple to apple compare here, as USPS FCI does not have tracking, but the China Post ePacket does)

50 Gram ( 2 oz)
China - U.S: 0.967 USD (6 CNY)
U.S - China = 3.78 USD

100 Gram ( 4 oz)
China - U.S: 1.93 USD (12 CNY)
U.S - China = 5.34 USD

500 Gram (18 oz)
China - U.S: 9.67 USD (60 CNY)
U.S - China = 13.17 USD

2) If you ship small item to a U.S destination, it will be cheaper to ship from another side of planet rather than ship domestically. ( handle by USPS)

If you are a Chinese seller on eBay sell to U.S consumers, you would use the ePackage. (eBay requires Chinese seller to use that service, and it's a tri-agreement exclusively granted to eBay and China postal).

This is how ePacket works:
- 1) eBay taking care the user interface. When a Chinese seller sell something on eBay, they can easily generate the shipping label by click a button on ebay.cn)

- 2) China Postal taking care the package collection, and transport it to the U.S. Once the package arrive the International Mail Process Center, the USPS will take over.

- 3) USPS label those package as First Class Mail (with tracking of course), and put them into mail stream.

Either you ship by ePacket or domestic First Class Mail, the USPS do same amount of work - the domestic part, but the Chinese seller pay much lesser than U.S Sellers.

The current rate for ePacket is 120 CNY ($19.30 USD) per kilo, tracking service and return service included. I don't think the USPS gets all that $19.30, as matter as fact, I don't even think USPS get half of that $19.30, as the major cost of the ePacket is trans-pacific portion, and China postal would not do that for free.

3) The new eBay policy is a great new for Chinese seller. Why? It comes down to how the postage calculate for ePacket and First Class Mail.

The postage calculation for ePacket is per kilo base, and the domestic First Class Mail is per package base.

Imagine:

A Chinese Seller, who sell iPhone screen protector, weights about 50 grams (2 oz), sells about 100 a day, how much he need to pay?

50 grams x 100 pieces of mail = 5 kilo = $19.30/kilo x 5 kilo = $96 (the ePacket have tracking include already)

A U.S. Seller, who sell the same item, with the same volume, Because the new eBay policy requires tracking, he have to use first class parcel service instead of Flats or letter service. How much the U.S seller need to pay?

2 oz First Class Mail parcel = $1.95 /piece x 100 piece = $195

So essentially, once the new policy taking effect, the U.S. sellers will not longer have any competing edge to Chinese sellers. Specially those low-value, low-weight items.

So the same item shipping half way around the world, cost only half of the same item ship from 100 miles away!! Both handle by USPS, a U.S government agency.

As a Chinese myself, I have nothing against my own people, most of them are honest and just trying to make a living like you and me. As a U.S citizen and a tax payer, I do not like our own government agency, which is paid by U.S tax payer, align with a U.S. company, partnering with foreign government agency, literally give out money to foreign sellers to competing with their own people.

I think you should write a blog on AB, urge every seller who is effect by this, write a letter to their senator and representatives, to have a hearing and re-evaluation about the USPS-eBay-China postal tri-agreeement.
David



Comments (16) | Permalink
Readers Comments

USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
This user has validated their user name. by: Anonymous Annie
       
Wed Apr 11 21:59:47 2012
I will give a nod of approval to David's sentiments about Chinese sellers... words that mirror the old eBay maxim about most people being generally good.

The playing field is definitely not even anymore. A distinct advantage has been given to a select group of people. Namely Chinese sellers and the (so-called) ''Diamond'' sellers.

As as been demonstrated countless time, the average small seller is usually dismissed or ignored by political types, gov't agencies, and most mainstream reporters.

The only thing left is our resentment... even if it risks causing one to appear to be a racist or an overly-exuberant and jingoistic  hyper-patriotic nationalist.

Unfortunately, in light of our impotence to do anything else, it appears to be all that we have left.

A small consolation that has no real effect on the situation, but a ''response'' to the situation nonetheless.

Well... I have one other response: I just don't buy from those sellers. It's the only thing I have left that means anything.

To me, anyway.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
This user has validated their user name. by: elpereles
       
Thu Apr 12 01:02:00 2012
I don't have any problem with China sellers or any seller in general. The shame is the USPS attitude. Every day I ask to myself how I get items from UK, Canada, and China with DC meanwhile items ship to "ally" or near countries like Canada can't guarantee DC for Priority Mail.  
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: used2luv2sell This user has validated their user name.
       
Thu Apr 12 10:04:28 2012
@David,
Thanks for writing this in terms everyone can understand.

What I have found interesting about this deal is the fact that the USPS is always operating in the red and they are going to be closing how many post offices in the U.S. this year?  

They don't have the funds to keep U.S. jobs, nor to keep some local post offices open, but they can make deals.  Was the Post Office worried that UPS would make a deal first?  

If the Chinese are able to profit from selling to the U.S., why do they need a special deal.  Isn't it MY tax dollars paying for this service that then keeps raising rates faster than Ebay?  

I no longer purchase items shipping from China either.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: exdwh This user has validated their user name.
       
Thu Apr 12 23:29:45 2012
While I certainly feel the pain, I don't think these discrepancies are too hard to justify. Isn't it just as 'unfair' that Amazon gets better UPS rates than the average small business?

Consider the following:

China may very well be USPS' largest customer. That should entitle them to some discount.

Maybe China presorts by US ZIP using automation or cheap local labor. Does USPS presort in the other direction? There probably isn't enough volume to bother.

China likely has lower transportation costs. Again, you've got a ton of packages going to a single destination.

With the exception of Canada/Mexico, current USPS international rates are based on broad regions. The China to US deal is very specific. It only works because of the volume.

Just some ideas I had this afternoon...

--David
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: comet This user has validated their user name.
       
Thu Apr 12 23:49:15 2012
We were "supossed" to be selling amazing amounts of--stuff---to China because they were supossed to have the biggest most up and coming middle class with disposable income that the world had ever seen.

However China was very clever and decided---why buy from America or England or Germany when we can MAKE IT OURSELF and keep the money HERE.

And ya know---there are many more people in China than there are in the USA.  

Do the math,

Every Yuan  (I hope that is the right unit) they DON'T have to spend on shipping and money exchange is money they can use to buy MORE STUFF.  

We USED to be like this here in the USA but sadly we ALLOWED our government to let business send "Our" work "away" to--India.  Mexico.  Taiwan.  Etc.  

Now if Mercedes Benz was a Chinese company---with the SAME reputation---we would all be envious.

What we DON'T like is that so much of what comes here from China is poorly made and there seems to be little CHOICE of pricepoint---either it is extremely HIGH and Made in the USA or extremely CHEAP and made in China.

And the labor situation in China---I won't even go into that.  Do you have ANY idea how much it COSTS Apple to MAKE an iPAD?  vs how much YOU pay for one?

Go look that up and come back and tell us all about how American workers "Can't do this work" or "Won't  work for those wages".  Any Apple product COULD be made HERE in the USA and sold for a HEFTY profit.  Yet Apple (and many other companies) are GREEDY and refuse to offer this work to Americans.  
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: Paul This user has validated their user name.
       
Fri Apr 13 01:06:38 2012
''I do not like our own government agency, which is paid by U.S tax payer''

'' Isn't it MY tax dollars paying for this service that then keeps raising rates faster than Ebay?''

Actually, no.  USPS is not tax-supported.  It is overseen by the Postal Regulatory Commission, a government agency, but it generates it's own revenue, not relying on ta dollars.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: roseland This user has validated their user name.
       
Fri Apr 13 01:06:59 2012
It always makes me laugh when ''taxpayers'' complain about the USPS. Well, they should have nothing to complain about and might be interested in knowing that the USPS is NOT supported by tax dollars and has not been for decades.  The USPS gets its revenue from the sale of products and services like most any other business.  Having said that, the USPS is NOT like any other business because it is basically run by and has to answer to congress.  You think it's bad having ebay telling you what business decisions to make.  Would you want your business run by congress?  The USPS basically has its hands tied and is not allowed to make ''rational'' business decisions in many instances because of that.  I retired after almost 20 years at the the USPS and I've seen enough goofy decisions made by  ''Little Napoleons'' and ''Looney Rooney'' managers to last me the rest of my life.  I often think work gets done despite the managers rather than because of them but that's another story for another time.

As far as the Chinese getting a better deal from their end rather than us from ours, I wonder if that has more to do with the weakness of the USD against the CNY rather than any secret deals.  The USD is in such bad shape and has fallen against so many foreign currencies that it now should cost us significantly more to buy foreign goods than it has in the past.  That also means that foreign currencies can buy US made goods for what would seem to be bargain basement prices.  This hasn't happened so much with Chinese goods because the Chinese government is supporting the USD to keep their goods relatively chep in the USA but if the Chinese ever decide to stop supporting the USD and dump their USD holdings, the price of Chinese and other foreign goods will go through the roof in this country.  I didn't mean to go on a tangent but one thing kind of led to another.  :))    
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: go-figure This user has validated their user name.
       
Fri Apr 13 06:50:02 2012
I'm sorry @Paul and @roseland but the US Government (read US Taxpayer) has been bailing out the USPS for years now. True, it is a quasi-governmental agency that's supposed to make it on its own, but it does not and hasn't been for years. Just how do you think that the USPS stays in business despite losing billions of dollars a year?

The sad reality of the marketplace currently is that it can be cheaper to send the same package from China to your next door neighbor than it is for you to send it to your next door neighbor via the USPS. While I don't fall into the conspiracy theory crowd, one has to wonder if all of that is part of the deal with the Chinese gov't by our ''esteemed'' leaders in DC to keep them buying up US gov't debt.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
This user has validated their user name. by: Tula
       
Fri Apr 13 11:11:59 2012
@comet: I agree with your points, except for the motivations of companies who outsource. It's usually not greed, but just  basic math. They have to compete against other companies globally and between the higher wages and having the world's highest corporate tax rates, they don't have a lot of options to cut costs in order to compete. Outsourcing production is kind of like hiring a contractor: You pay one amount for getting work done, with no benefits, FICA, unemployment, worker's comp, etc... added on top like you'd do with employees. Throw in unions and those costs are even worse, so the math makes outsourcing the best business decision.

I don't like it any better than you do, but I understand it. David brings up some good points about why the costs for the China->US shipping is cheaper (volume, bulk shipping) but it would be nice to see the USPS perhaps do the same for US companies shipping *to* China -- or for that matter, shipping to  anywhere where there's a lot of volume of goods being exported from the US.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
This user has validated their user name. by: permacrisis
       
Fri Apr 13 11:30:22 2012
Well there is something else to consider besides raw labor costs.

Part of the agreement *might* be, and I'm just talking off the cuff here, that the Chinese products shipped under this agreement can be thrown away if undeliverable as addressed? Maybe the Chinese deal is like that. For example:

Much of our own bulk shipped, easily replaceable, as-seen-on-TV CRAP that is mailed out here in the USA goes cheaper on the condition that if it has to go back, it hits the trashcan instead.

And indeed it does. Trial packs of razors, $25 boxes of ProActiv, those insufferable Video Professor DVD's, you name it- as soon as you turn your back after having refused these items, or if the recipient has moved with no forwarding, they get chucked.

We used to have to beat the bums away from the dumpsters. Then the ebay sellers showed up and went bananas till we finally locked them out.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: KEEPING A CLOSE EYE ON THEM ALL! This user has validated their user name.
       Web Site
Sun Apr 15 08:04:07 2012
Sigh...
Not to sound rude or mean here but with the exception of "roseland" above most everyone here is very confused &  mistaken about USPS's financial standing and the 'how & where' of how they receive their funding and marching orders so to forth.

How would I know?
I WORKED at/for USPS for many years until very recently here when I decided to retire and take back the reigns on my internet sales companies.

1st Myth.
Congress does NOT control the everyday operations decision making process. They basically only assert "yes or no" control over major policy changes that the PMG (Post Master General) submits for approval. (ie: office closings, fees for services, and to a very small extent hours of operation)

Frankly, the average Congress persons intelligence level couldn't begin to comprehend the very involved aspects of the US Postal Systems many intricate operations details.

** As 'roseland' stated - I've seen more numbskull decisions concerning daily operations and policies made by so called USPS 'Generals' and local Post Master Generals than I care to think about, and as she said, the mail gets moved DESPITE those lunkheads, not BECAUSE of their leadership!

*(Kind of reminds me of ebay - Not the foggiest CLUE of how their own systems actually work in real life, right?!)

2nd Myth:
USPS, while they may have lost some money, certainly is NOT actually losing BILLIONS a year as the headlines scream.
The vast majority of the so called 'in the red loss' occurs simply due to Congress mandating that they fund their Retirement and Pension funds 50 YEARS into the future.
It may not seem that would be much of a drain unless you had a 1st hand look at exactly how many people actually work for USPS, both past and present - The number is staggering and every last 1 of those people must be included in the money that's 'drained' and set aside.
THAT is what accounts for the majority of the loss right there folks.

3rd Myth:
On the 'China' vs US shipping costs... Mostly the difference comes about due to the Chinese government devaluing their own currency against the dollar so that their money and goods are 'cost valued' at so much less than ours products and our U.S.D. that they can now sell products at a fraction of the cost and pay a fraction of the cost to ship it 'compared' to the U.S sellers costs…

But in reality it's all done with smoke, mirrors and devious accounting methods by the Chinese government.
But of course, ‘Faked’ or not it has a very REAL impact on U.S. based sellers and U.S. Companies of all sizes, not to even mention it’s effect on our U.S.  economic stability in the world wide economy.


THAT is why the U.S. 'appears' to be so in debt. to China - If the currencies were equalized you'd see a whole different story.
(Granted that all goes a LOT deeper than just ebay sales, shipping, ect... Most of the worlds governments are leaning on China to cut the crap and start valuing their currency at what it REALLY is instead of keeping it depressed which gives them enormous Trade/Accounting advantages over every other Country on earth)

4th Myth:
Taxpayers do not bailout’ USPS - At the very best Congress ‘loans’ them money if needed and then gets it back. They have not ever, (in recent times) ‘GIVEN’ them a dime… As others have said, they sink or swim on their own income as any business would.

Bottom line - They need to make many, many changes to get above the mess they are currently in, there is a huge field of improvements they need to make in their operations but truthfully folks?

If you personally SAW with your own eyes, or had any clue how much mail goes through the system every single day you’d be at a loss to understand how in the world anything gets delivered at all...

It’s truly mind boggling and it goes on everyday, day in day out…

*(Which by the way, most folks don't know this but the mail moves 24/7/365 days a year - Just because your local Post Office is closed believe me, NOTHING else in USPS 'closes/shuts down' any day of the year, not Christmas day, new years, NEVER... The mail processes and moves every day, period.
I've been order to work on MANY a Christmas Day morning, New Years, the 4th of July, ect...)

Now, before anyone thinks I am ‘defending’ USPS please know I recently wrote Ina a letter telling her just how utterly and totally disgusted with USPS’s service I’ve been lately - They have ‘missent’ (THEIR term) and LOST some 23 packages in the last 60 days alone and I for one am pretty much DONE with using them any longer until they get their act together!
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: pace306 This user has validated their user name.
       
Sun Apr 15 10:50:32 2012
Wait ... !?  Someone here expects eBay to be FAIR to its sellers?

Really? Really?

You can cry about USPS and the Chinese government all day - its got no direct bearing on the issues...

1) the ability for Chinese sellers to easily obtain a DC# or equivilent so that they never get any INR cases.

2) eBays allowing these kinds of things to happen to only (1) class or group of sellers.

If the Chinese government wants to subsidize thier sellers - thats not anythng I Can control or care about. *MY* concern is how eBay and Paypal handle USPS FCM items when sent from here to ''there'' (whereever there is).

Raise your hand if you've been stung by sending items FCM to Brazil or other places. eBay practically BEGS the buyers to file cases!

eBay knows (as an example) that there are issues with certain countries but stay mum ON PURPOSE. Why? FVF. Sellers pay it even if they loose INR cases.

eBay couldnt sit down with USPS and do for US sellers what they did for Chinese sellers? SURE THEY COULD HAVE - they dont want to!

Kudos to the Chinese government for trying to support their small businessman ... and as usual - thumbs down and a big  ........ (well I cant say it - itsa PG rated site) to eBay for once again screwing over its own US sellers.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: Digmen1 This user has validated their user name.
       Web Site
Sat Apr 21 00:42:27 2012
How can the Chinese sellers be called volume ?
There will be thousands of them sending one or two parcels a day to many different places all over the USA.
How is that volume ?
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: auctioncutioner This user has validated their user name.
       
Fri May 4 14:09:50 2012
As some user's have pointed out, the USPS is a non tax payer funded, and is was created independently by authorization of the United States Constitution.
The Postal service was actually created to be it's own little government, and has the power in the event of the political leader's being made unavailable to have control over the country in such a crisis.
Back in 2002 or so, the USPS had obtained a large low interest loan to acquire fancy new postal machines, however this debt payment became due in the last couple of year's, thus resulting in financial problems with the postal service.
If it were not for the priority services, the postal system would have failed already.
It is well known that companies that send out millions of those fliers each week pay just a fraction of a cent to mail them out(the idea according to the postal service, is they have to complete their route anyhow, so why not have a little bit more even at hardly any worthy payment.
What it amounts too is subsidizing other payment mail types for those capitalizing off of those discounts.
During the pony express years it cost around $0.50 to mail a first class letter across country, as technologies improved the costs dropped.
However as the postal service started delivering those flyer's the costs increased, this is because of the increase in weight of those fliers, and the shear amount  of extra time that is required to transfer load delivery trucks, and carriers to deliver on their routes.
Those costs are way higher than what the postal service is being paid.
Thus postal rates keep increasing, along with the debt payments.
Now another poster mentioned how the USD has dropped in value compared to other world currencies in the last few year's, not really the truth at all.
First of all while it is true that China held the vast majority of the US debt 4 year's ago, since then private US companies such as Insurance, and the U.S Treasury along with the Federal Reserve have been buying back those debt bonds, to the tune of almost half of the debt that China once held, so China is holding far less US debt than they were for years ago.
Also Britain, has increased their investment portfolio x's 5 by investing in and buying US Dollars, because it has stabilized.
China on the other hand has kept their currency artificially low, this is unfair since it allows all of the economics required to keep expanding and gaining monopolies.
Aka the postal example,lower wages, no benefits, no safety regulations,etc. etc.
So you see, China is indeed playing unfairly and not by the rules,if they started representing their currency to fair market values, it would start evening up the playing feild in the world economics.
Now as fair as the US buying power, it's actually a number of other factor's that are resulting in what we observe as a lower currency buying power.
Alot of that has to do with several causes of inflation, there is corporate inflation, wealth inflation, currency inflation, and debt leveraging inflation.
There are other types as well, but those 4 are the most important types of inflation being created.
Remember real value of worth is not a currency, but at the hands of the worker, and like the world economic scheme, if there is a wide earnings discrepancy between classes it causes inflation.
It is complicated but not unsurmountable.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
This user has validated their user name. by: tony@sellertools.org
       Web Site
Mon Jul 9 18:44:11 2012
I heard a lot of local sellers recorded slow business lately. They are all selling small stuffs locally. eBay should be fair to domestic sellers who can't compete with China or Hong Kong sellers with cheap prices and CHEAP shipping with tracking information. They are forced to leave eBay and turn to other marketplace such as Amazon.
USPS Gives eBay China Sellers Competitive Advantag   USPS Gives eBay China Sellers Competitive Advantag
by: EBReader This user has validated their user name.
       
Sun Mar 3 12:44:57 2013
The international postal regulations (see UPU) set and monitor the rates that are paid to accept incoming mail from other countries.

At the present time, mail from China to US is accepted at the rate of about 50 cents per pound. A pound of mail can range from one package to about 50 of the small bubble ePackets (the ones that can hold screen protectors, jewelry, plastic beads, appliques, bows, lanyards, small craft supplies, etc.).

Thus, for the small ePackets, the US receives approximately 1 cent per packet to deliver, track and scan it to its US destination. For the medium-small ePackets, it's about 2 cents per packet. Not all the ePackets are small or very lightweight, but glancing through ePacket dealers on eBay, it's clear that a large proportion are.

Can USPS afford to ship 50 of the small bubble packs with scanning and tracking for a penny each? Or the medium-small ones for two cents each? Are there enough large packages to offset the costs? Even a dollar for a one-pound package is a bargain compared to what US shippers pay. US shippers have to pay almost two dollars for a 3-ounce package with tracking.


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