Buying goods from China

[Odsox]

I've done this several times on €bay and most have been reasonable quality for peanut prices.

I just took delivery of a pair of headphones with microphone attached, they work OK, look OK in fact look very well made. But the point I want to make is that I paid £3.96 for them with FREE delivery and the stamp on the jiffy bag was 48 Yuan ... according to the on-line currency converter 48 Yuan = £4.55.
So what on earth is going on ?
I know Chinese workers get next to nothing in wages but how can a company sell for less than cost ?
The cynical side of me thinks this is a Chinese government ploy to drive western companies out of business, and it appears I'm helping them to do just that.

[oldfella]

Been doing this for the last couple of years, after discovering that the same electronic training collar system, for one of our dogs could be bought for 102 euros cheaper than in UK or France, so if we can buy direct as a one off item, what would be the cost if I ordered 1000? so it appears to me that some one is making one hell of a profit.

[grahamhobbs]

..................................
The cynical side of me thinks this is a Chinese government ploy to drive western companies out of business, and it appears I'm helping them to do just that.

Bit more subtle than us swamping them with opium though.

[gregorach]

A lot of the really cheap stuff on eBay is warehouse stock from failed businesses. They buy it up by the container load at auction for pennies on the pound - so yeah, you can knock that out under cost and still make a profit, because somebody else already took the hit when they went bankrupt.

[Odsox]

Maybe Dunc, but I think you missed my point.
How is it possible for a Chinese company to sell me an item for £3.96 inc P&P when the postage costs them £4.55 ?
Even if they got the goods for free, it's still costing them 59p to get it to me.

[gregorach]

Ah, sorry, not yet fully awake... Yeah, I've got no answer for that. Forged stamps perhaps? Or maybe they get some kind of discount?

[grahamhobbs]

Perhaps the currency dealers are making a killing or the exchange rate is rigged.

[Thomzo]

Perhaps the currency dealers are making a killing or the exchange rate is rigged.

You paid them in Euros? So they are probably making on the exchange as the exchange rate for the Yuan is fixed by the Chinese government. It wouldn't surprise me if the Chinese government gave subsidies for companies that export.

Zoe