US Post Office Subsidizes Shipments from China

What happens if Alibaba buys Ebay???ALIBABA and the 40 1 Thief:

The ongoing rumors of Ebay being bought by Alibaba have opened our eyes on how exactly a Chinese seller on Ebay can offer free shipping on an item which they sell for under $2.00, though this dates back a couple of years.  And to just why Alibaba might be interested in Ebay, as they would acquire this sweetheart of a deal with the USPS, which not even the giant Amazon has privy.  (It does seem to me that this entire deal reeks discrimination – via favoritism to certain businesses.) This Alibaba won’t need 40 thieves!

US Postal Rates for 2 ounces within same city

Cost of Shipping 2 Ounces in US

USPS Postal Cost for Chinese Vendors on Ebay

Cost of shipping First Class (with tracking) from China

Just to be fair, I calculated a 2 ounce package (because you can’t ship beads in a letter due to the thickness) from San Jose CA going to San Jose CA.

The cost came up $2.32

But alas if you are a Chinese vendor on ebay, you can ship this same 2 ounces from Hong Kong or mainland China for $.98.

Preferential Treatment:

But this also fosters ebay’s preferental treatment of Chinese vendors – want to know what happens if Alibaba buys Ebay?

Chinese Product Sells for $1.79 and Ships for Free? Who is Paying for Shipping?

Product Sells for $1.79 and Ships for Free? Who is Paying for Shipping?

READ IT HERE:

Ebay currently has no interest in punishing Chinese customers selling fakes or falsely advertising goods. They are ignoring reports and pushing the Chinese vendors to the top of any search. READ IT HERE: If it says it ships from China or HongKong – It’s NOT Murano Glass. If Alibaba owns ebay, they will have even less interest in flooding the market with knockoffs.

So it’s no surprise that ebay sellers in the US are unhappy as they continually see products (yes produced in China) auctioned, or “buy it now” with FREE Shipping. And with Alibaba at the helm, what do you think their motivation will be? They would inherit this sweetheart deal.

USPost Office Announced Deal with China & Ebay

But it’s real and here is the News Release by the US Post Office of this grand agreement.(Click for the USPS-China-Ebay-Agreement announcement directly from the Post Office.) Yes that’s our US Post Office who seems to loose more money each year, wonder why?

And the Washington Post reported the plight of one US business whose sales suddenly ceased. (Click here for WashingtonPost_Report or visit the website)

“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.”

But wait, it gets even sweeter. For these same unbelievable rates, the Chinese get tracking. Have you seen what sellers in the US have to pay for International shipments tracking? It must be Priority Mail International (where 2 ounces will cost ~$38.90).

Who Approved this Deal?

Yep, this is the same US Post Office who is continually asking the US tax payers for more money as they are loosing money? No joke, they must have been sleeping in their economic classes as shipping more packages at a loss doesn’t help their bottom line. It turns out they pulled this little number some time ago as the announcement is from 2010 and is a TriLateral Agreement between China, Ebay and the USPS.

What does it really mean?

It means that more small sellers in the US are simply disappearing from ebay and other markets. Ebay pushes, extremely hard, to force sellers to offer free shipping. And they encourage you to build in the shipping costs, citing buyer psychology “buyers know the shipping is built in, but want it shipped for free anyway”. That again makes the smaller seller less competitive. And ultimately the USPS looses again because the actual paying customer is gone! While the $.98 paying Chinese is still shipping,but maybe they are still thinking they can make it up in volume!

What can you do about this?

Write your Congress and Senate representatives. Write the USPS and above all do NOT buy goods on ebay from China. Actually not buying from ebay is ok with me too!!!!

 

  1 comment for “US Post Office Subsidizes Shipments from China

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