20 ms·

> All of this is little comfort to McGrath, who chafes at the thought of the Postal Service helping Chinese merchants poach his customers. “All of us sellers ar

by csydas 9y ago

> All of this is little comfort to McGrath, who chafes at the thought of the Postal Service helping Chinese merchants poach his customers. “All of us sellers are selling a lot of Chinese goods in America but at least we’re creating jobs, making money, and adding to the economy,” he said. “But when people buy direct from China that’s adding nothing to the American economy.” I understand the seller's frustration - their means of supporting themselves has been taken away, but I'm not sure I buy the argument that we need the intermediary just to "add to the economy". To me it just seems like an unsustainable business model that was destined to die once global communication became much easier, not just because of the various treaties and agreements of postal services. The moment that chinese sellers could get a site available to a global audience, the need for an intermediary vanished; before you essentially paid for the connection; an extra $18 on a remote controlled toy boat was paying for access to the seller's inventory, supplied by his Chinese connections. Now, there's no need for that connection or that warehouse - the visibility for any foreign seller is much greater, even to the point that it probably would still be valuable even without the USPS trade deal. It's unfortunate, but this just seems like a model that was destined to die.

devoply 9y ago
All middle men are destined to be automated out by the system, if they add no value then sooner rather than later. However, people selling stuff online in niche markets are still somehow surviving, but sooner or later someone will figure out where they are hiding and get them too. It's all a matter of time.
- jpalomaki 9y ago
  In this case small players can have advantages that big players don't. For example should I start shipping container loads of fidget spinners (latest thing among the youth here) from China to Finland I would have all kinds of things to take care of. User manuals, product safety issues, customs, local value added tax, consumer protection things etc. Small sellers operating from China can escape many of these.
  - lucaspiller 9y ago
    I've recently got into 3D printing. I bought a printer from Amazon DE (directly from Amazon, shipped from Germany) that is known to cause fires (but can be fixed with a few simple mods). I doubt it would be allowed if it was made in Europe, but somehow Amazon have escaped regulation and sell these products cheaply made in China. I guess they pay taxes and customs so everyone is happy :-)
- kbutler 9y ago
  Middlemen provide a service, adding value. That service is generally helping buyers connect with sellers. The internet has allowed a new generation of middlemen to rise, providing the service at a lower cost. eBay and Amazon are middlemen.
  - hueving 9y ago
    Uber is also a middleman.
  - TeMPOraL 9y ago
    When they add value, they thrive. When they stop adding value, that's when they get into problems. Note that whether or not middlemen add value is not under their control. Local resellers add much less value than they used to now that global e-commerce works. Recording labels added value until the Internet came, and now they don't.
hkmurakami 9y ago
Also the seller's claim that direct doesn't add anything to the economy is false. That surplus will be directed elsewhere, hopefully to something more productive than what has become an unnecessary intermediary.
- omginternets 9y ago
  "Hopefully" being the operative word. As such we can't refute the claim outright, at least not with the information at hand.
- hueving 9y ago
  The global economy sure, but not the US economy.
  - scribu 9y ago
    How do you figure? The surplus comes from the fact that US buyers don't have to pay a percentage to the intermediary, so they can spend it on other things, like going out to a local restaurant more often.
    - cujo 9y ago
      Forgive my ignorance, but can't it go the other way also? A contrived example... A person has $X that they spend every week at the local town restaurant. They see they can buy a cool new widget from a Chinese vendor (from the article) for $Y. Over the course of the next few weeks, said person spends a little less at the restaurant so as to save up $Y, ultimately purchasing the widget once enough money is saved. In this example the person is contributing less to the local economy.
      - rtpg 9y ago
        for the local economy there's functionally no difference between giving the money to China or to a reseller at the other side of the country.
sdiepend 9y ago
I guess local sellers should try to add value by providing support, warranty and other things on top of the product.
- WhiteOwlLion 9y ago
  Value Added Resellers (VARs) may work if you've got margin to work with. When I ran my company, I'd get emails and calls from random people that wanted support for a product I sold but never purchased from me. If your margin is 5%-10% on commodity products, then that type of support does not scale. Adding warranty costs money to replace. You get what you pay for and stuff made in China is hit or miss (more miss than hit IMO). So, adding warranty means you have to replace defective parts more often. Again, doesn't scale when you don't have the margin.
new299 9y ago
I'd agree intermediaries aren't really adding anything of value. The problem is however, even in cases when you can produce something as cheaply in the US as in China, a Chinese seller can still beat you on price because they pay less for shipping. And that seems dumb.
- pulse7 9y ago
  Many small shipments across the ocean are costlier than one large shipment which is then distributed locally. USPS (and other national postal services across the world) will need to increase the prices for those small shipments and make profit out of it. I can only guess that in addition to this huge quantity discounts the shipments are subsidized by the Chinese government to accelerate export. US and other countries should learn from them...
  - TeMPOraL 9y ago
    Given that in my experience, Chinese shipping times are utterly random (as little as one week to as much as 2 months), I'd expect them to actually batch all those small shipments and send them regularly in bulk on ships (with the Chinese post, not sellers, doing the batching).
  - new299 9y ago
    I'd need to see a citation of that really, or some ballpark estimates, to give it any credence. I wouldn't necessarily expect local-to-local shipping always to be cheaper. But I'd expect there to be at least one option where you can bring a pre-labelled package to a shipping hub and get it sent at the same or lower cost.
- csydas 9y ago
  Well, wouldn't the tradeoff there be time? In the past when I've ordered products from China or Korea, the tradeoff for free or $.99 shipping was that I had to wait two weeks. I do remember some shops had started keeping local warehouses for faster shipping times, so it seems like the foreign sellers are coming at it from both ways; they will ship small parcels that take awhile to arrive, or they'll send locally and eat the shipping costs. I'm not convinced at the moment that it's the shipping alone that is causing the issue with the US sellers, especially given the limitations of the cheap shipping agreement (under 4.4 lbs I believe it said).
Markoff 9y ago
good luck with warranty on stuff bought directly from China, their warranty period is also only one year instead of two in EU
- sokoloff 9y ago
  The way I look at it is that I self-insure. Much of what I buy direct from China (small electronics modules, connectors, electronics supplies, PCBs, etc) is less than half the price of what local sellers are charging, often way less. My experience is that way over 95% of items are as described, arrive safely, and perfectly functional. The odd item that is broken in transit (or never arrives) I simply choose not to care about. I don't need a warranty on a connector, an Arduino clone, or a tube of solder...
  - TeMPOraL 9y ago
    You're ordering one of the few things you can safely order from China, though. There's no way for them to screw up electronic components, because they're basically the single stop between you and the same factories which supply everyone else on the market. I wouldn't try that with consumer electronics though. Anything that's actually assembled to be sold cheap will likely be close to unusable. I can name plenty of examples of crap electronics I ordered from China or saw personally on Chinese markets when I was in Shenzhen. I stick to big western brands in this market simply to avoid completely useless crap.
    - sokoloff 9y ago
      I've also had good luck with small bluetooth speakers, with LED/PIR closet lights, with landscape lighting, with RGB LED light bulbs, LED lighting kits, charging cables, and a bunch of other things, even including a network tracing/mapping tool (that one I was sweating a little bit as it was expensive). It's literally better than 95% (probably more like 99%) good stuff and I'm willing to eat the small amount of slippage/breakage/fraud/poor design.
      - TeMPOraL 9y ago
hyperbovine 9y ago
> “All of us sellers are selling a lot of Chinese goods in America but at least we’re creating jobs, making money, and adding to the economy” The Father Niemoller of the modern age.
deleted 9y ago
[deleted]
tyingq 9y ago
>To me it just seems like an unsustainable business model My experience with this isn't quite how you're describing. The Chinese vendors are sort of having their cake and eating it too. They'll often, for example, not be honest about the the shipping time, their return policies, product details, ability to answer product questions, and so forth. Even if the selling platform does something about it, another Chinese seller pops up to replace any that are booted out. So, for the end consumer, they don't get a true view into what the consequences are of buying from the lowest bidder. It's difficult for a US supplier to get their value proposition out there on platforms like Amazon, as there is one product listing and multiple sellers. There's no spot to show why your offering that's priced higher is worth it. Better support, return policies, fast shipping, product knowledge, etc.
- komali2 9y ago
  I don't see how what you said couldn't equally apply to American sellers.
  - tyingq 9y ago
    It could, yes, but it's not been my experience. I suspect part of it is that Amazon is a bit better about blocking US sellers that perform badly, blacklisting the tax id, address, bank accounts, etc, such that bad US sellers can't come back, or create a new entity shedding a history of bad reviews. I don't think they have that same ability for Chinese sellers.
    - JohnTHaller 9y ago
      Chinese sellers seem to pop up again with a new fake name overnight on Amazon. And they polute the Amazon inventory with fake goods. To make matters worse, Amazon blocks most reviews that point out receiving fake products.
- csydas 9y ago
  I think this is slightly different than what the article (and by extension my comment) were discussing. For some products and items, the difference between the chinese produced items and the actual items is a world of difference (e.g., electronics batteries, power adapters), but that isn't really the business that the article was talking about the cut into - the issue was resellers who would buy up a warehouse stock from chinese producers and sell it at mark-up; with modern postal agreements and websites, there really isn't a need for this particular service. It's not a matter of meeting shipping times or any other value propositions, it's "do we need someone to resell a toy boat at twice the price when we can buy the same stock directly"
013a 9y ago
But the core of the argument is that this isn't pure capitalist economics; the government is essentially subsidizing China's ability to compete in America. It'd be one thing if China could make it and ship it for legitimately cheaper, but abusing a treaty loophole in USPS regulations isn't the same. That's an unfair advantage. There's also a second argument at play: If China can make a product for $10 cheaper, legitimate shipping included, because they're allowed to abuse their workers and pay them much less, do we trust pure capitalism to properly prioritize the values of the American people? This really is the case of, say, Apple's electronics plants in China.
- GavinMcG 9y ago
  I think that second argument is a different case than the one this thread concerns. This isn't about different manufacturing environments - it's about literally the same product being distributed via a middleman or not. We've always benefited from Chinese labor abuses, and whether an American intermediary is involved doesn't change that.
- woliveirajr 9y ago
  The loophole isn't unidirectional. It can make the China Post deliver many letters to small villages in China. The problem is that no one on those villages are interested in paying some small price to receive a thing from America.
  - mistermann 9y ago
    In theory it is not unidirectional, in practice it is. When it was written, all they really had to go on was theory.
    - woliveirajr 9y ago
      Hum... put yourself back in the 60's. Imagine you're signing a contract that says "I, the Postal Service of the country NNN, will deliver any letter that comes from any country to any city that I reach, no matter if it'll cost a 3 hours plane flight to deliver a 1 oz envelope". Fast forward to 2017, yes, now the agreement seems unfair because the deliver of goods changed a lot. Perhaps should be reviewed. But I wouldn't say it just worked on theory back then, neither will I say that now it is unidirectional in practice (because you still can make it go in any direction). And the main point isn't just that things made in China are cheaper. It's that China has so much freight going to all parts of the world that putting one container full of envelops with a single button inside doesn't cost a thing, so they win in on how much it costs to take an envelop from a post office inside China and deliver it to a USA / Europe / South America port. It costs about US 1,900 to take a container from Shangai to New York (source: https://www.searates.com https://www.searates.com ). That is cheap.
cbhl 9y ago
Subsidizing lettermail from poor countries seems reasonable. I might have to work for half an hour to earn enough to pay postage to anywhere in the world; it's undesirable for the recipient to have to pay three months' wages to send me a reply. Subsidizing businesses abroad seems less desirable, especially if it costs us millions of dollars a year. That should just be part of the price of the good, whether or not it goes through a US intermediary. Instead we have this weird system where purchases directly from China are subsidized by taxes, but domestic purchases are "full price".

by csydas 9y ago

devoply 9y ago

All middle men are destined to be automated out by the system, if they add no value then sooner rather than later. However, people selling stuff online in niche markets are still somehow surviving, but sooner or later someone will figure out where they are hiding and get them too. It's all a matter of time.

jpalomaki 9y ago
In this case small players can have advantages that big players don't. For example should I start shipping container loads of fidget spinners (latest thing among the youth here) from China to Finland I would have all kinds of things to take care of. User manuals, product safety issues, customs, local value added tax, consumer protection things etc. Small sellers operating from China can escape many of these.
- lucaspiller 9y ago
  I've recently got into 3D printing. I bought a printer from Amazon DE (directly from Amazon, shipped from Germany) that is known to cause fires (but can be fixed with a few simple mods). I doubt it would be allowed if it was made in Europe, but somehow Amazon have escaped regulation and sell these products cheaply made in China. I guess they pay taxes and customs so everyone is happy :-)
kbutler 9y ago
Middlemen provide a service, adding value. That service is generally helping buyers connect with sellers. The internet has allowed a new generation of middlemen to rise, providing the service at a lower cost. eBay and Amazon are middlemen.
- hueving 9y ago
  Uber is also a middleman.
- TeMPOraL 9y ago
  When they add value, they thrive. When they stop adding value, that's when they get into problems. Note that whether or not middlemen add value is not under their control. Local resellers add much less value than they used to now that global e-commerce works. Recording labels added value until the Internet came, and now they don't.

hkmurakami 9y ago

Also the seller's claim that direct doesn't add anything to the economy is false. That surplus will be directed elsewhere, hopefully to something more productive than what has become an unnecessary intermediary.

omginternets 9y ago
"Hopefully" being the operative word. As such we can't refute the claim outright, at least not with the information at hand.
hueving 9y ago
The global economy sure, but not the US economy.
- scribu 9y ago
  How do you figure? The surplus comes from the fact that US buyers don't have to pay a percentage to the intermediary, so they can spend it on other things, like going out to a local restaurant more often.
  - cujo 9y ago
    Forgive my ignorance, but can't it go the other way also? A contrived example... A person has $X that they spend every week at the local town restaurant. They see they can buy a cool new widget from a Chinese vendor (from the article) for $Y. Over the course of the next few weeks, said person spends a little less at the restaurant so as to save up $Y, ultimately purchasing the widget once enough money is saved. In this example the person is contributing less to the local economy.
    - rtpg 9y ago
      for the local economy there's functionally no difference between giving the money to China or to a reseller at the other side of the country.

sdiepend 9y ago

I guess local sellers should try to add value by providing support, warranty and other things on top of the product.

WhiteOwlLion 9y ago
Value Added Resellers (VARs) may work if you've got margin to work with. When I ran my company, I'd get emails and calls from random people that wanted support for a product I sold but never purchased from me. If your margin is 5%-10% on commodity products, then that type of support does not scale. Adding warranty costs money to replace. You get what you pay for and stuff made in China is hit or miss (more miss than hit IMO). So, adding warranty means you have to replace defective parts more often. Again, doesn't scale when you don't have the margin.

new299 9y ago

I'd agree intermediaries aren't really adding anything of value. The problem is however, even in cases when you can produce something as cheaply in the US as in China, a Chinese seller can still beat you on price because they pay less for shipping. And that seems dumb.

pulse7 9y ago
Many small shipments across the ocean are costlier than one large shipment which is then distributed locally. USPS (and other national postal services across the world) will need to increase the prices for those small shipments and make profit out of it. I can only guess that in addition to this huge quantity discounts the shipments are subsidized by the Chinese government to accelerate export. US and other countries should learn from them...
- TeMPOraL 9y ago
  Given that in my experience, Chinese shipping times are utterly random (as little as one week to as much as 2 months), I'd expect them to actually batch all those small shipments and send them regularly in bulk on ships (with the Chinese post, not sellers, doing the batching).
- new299 9y ago
  I'd need to see a citation of that really, or some ballpark estimates, to give it any credence. I wouldn't necessarily expect local-to-local shipping always to be cheaper. But I'd expect there to be at least one option where you can bring a pre-labelled package to a shipping hub and get it sent at the same or lower cost.
csydas 9y ago
Well, wouldn't the tradeoff there be time? In the past when I've ordered products from China or Korea, the tradeoff for free or $.99 shipping was that I had to wait two weeks. I do remember some shops had started keeping local warehouses for faster shipping times, so it seems like the foreign sellers are coming at it from both ways; they will ship small parcels that take awhile to arrive, or they'll send locally and eat the shipping costs. I'm not convinced at the moment that it's the shipping alone that is causing the issue with the US sellers, especially given the limitations of the cheap shipping agreement (under 4.4 lbs I believe it said).

Markoff 9y ago

good luck with warranty on stuff bought directly from China, their warranty period is also only one year instead of two in EU

sokoloff 9y ago
The way I look at it is that I self-insure. Much of what I buy direct from China (small electronics modules, connectors, electronics supplies, PCBs, etc) is less than half the price of what local sellers are charging, often way less. My experience is that way over 95% of items are as described, arrive safely, and perfectly functional. The odd item that is broken in transit (or never arrives) I simply choose not to care about. I don't need a warranty on a connector, an Arduino clone, or a tube of solder...
- TeMPOraL 9y ago
  You're ordering one of the few things you can safely order from China, though. There's no way for them to screw up electronic components, because they're basically the single stop between you and the same factories which supply everyone else on the market. I wouldn't try that with consumer electronics though. Anything that's actually assembled to be sold cheap will likely be close to unusable. I can name plenty of examples of crap electronics I ordered from China or saw personally on Chinese markets when I was in Shenzhen. I stick to big western brands in this market simply to avoid completely useless crap.
  - sokoloff 9y ago
    I've also had good luck with small bluetooth speakers, with LED/PIR closet lights, with landscape lighting, with RGB LED light bulbs, LED lighting kits, charging cables, and a bunch of other things, even including a network tracing/mapping tool (that one I was sweating a little bit as it was expensive). It's literally better than 95% (probably more like 99%) good stuff and I'm willing to eat the small amount of slippage/breakage/fraud/poor design.
    - TeMPOraL 9y ago

hyperbovine 9y ago

> “All of us sellers are selling a lot of Chinese goods in America but at least we’re creating jobs, making money, and adding to the economy” The Father Niemoller of the modern age.

deleted 9y ago

[deleted]

tyingq 9y ago

>To me it just seems like an unsustainable business model My experience with this isn't quite how you're describing. The Chinese vendors are sort of having their cake and eating it too. They'll often, for example, not be honest about the the shipping time, their return policies, product details, ability to answer product questions, and so forth. Even if the selling platform does something about it, another Chinese seller pops up to replace any that are booted out. So, for the end consumer, they don't get a true view into what the consequences are of buying from the lowest bidder. It's difficult for a US supplier to get their value proposition out there on platforms like Amazon, as there is one product listing and multiple sellers. There's no spot to show why your offering that's priced higher is worth it. Better support, return policies, fast shipping, product knowledge, etc.

komali2 9y ago
I don't see how what you said couldn't equally apply to American sellers.
- tyingq 9y ago
  It could, yes, but it's not been my experience. I suspect part of it is that Amazon is a bit better about blocking US sellers that perform badly, blacklisting the tax id, address, bank accounts, etc, such that bad US sellers can't come back, or create a new entity shedding a history of bad reviews. I don't think they have that same ability for Chinese sellers.
  - JohnTHaller 9y ago
    Chinese sellers seem to pop up again with a new fake name overnight on Amazon. And they polute the Amazon inventory with fake goods. To make matters worse, Amazon blocks most reviews that point out receiving fake products.
csydas 9y ago
I think this is slightly different than what the article (and by extension my comment) were discussing. For some products and items, the difference between the chinese produced items and the actual items is a world of difference (e.g., electronics batteries, power adapters), but that isn't really the business that the article was talking about the cut into - the issue was resellers who would buy up a warehouse stock from chinese producers and sell it at mark-up; with modern postal agreements and websites, there really isn't a need for this particular service. It's not a matter of meeting shipping times or any other value propositions, it's "do we need someone to resell a toy boat at twice the price when we can buy the same stock directly"

013a 9y ago

But the core of the argument is that this isn't pure capitalist economics; the government is essentially subsidizing China's ability to compete in America. It'd be one thing if China could make it and ship it for legitimately cheaper, but abusing a treaty loophole in USPS regulations isn't the same. That's an unfair advantage. There's also a second argument at play: If China can make a product for $10 cheaper, legitimate shipping included, because they're allowed to abuse their workers and pay them much less, do we trust pure capitalism to properly prioritize the values of the American people? This really is the case of, say, Apple's electronics plants in China.

GavinMcG 9y ago
I think that second argument is a different case than the one this thread concerns. This isn't about different manufacturing environments - it's about literally the same product being distributed via a middleman or not. We've always benefited from Chinese labor abuses, and whether an American intermediary is involved doesn't change that.
woliveirajr 9y ago
The loophole isn't unidirectional. It can make the China Post deliver many letters to small villages in China. The problem is that no one on those villages are interested in paying some small price to receive a thing from America.
- mistermann 9y ago
  In theory it is not unidirectional, in practice it is. When it was written, all they really had to go on was theory.
  - woliveirajr 9y ago
    Hum... put yourself back in the 60's. Imagine you're signing a contract that says "I, the Postal Service of the country NNN, will deliver any letter that comes from any country to any city that I reach, no matter if it'll cost a 3 hours plane flight to deliver a 1 oz envelope". Fast forward to 2017, yes, now the agreement seems unfair because the deliver of goods changed a lot. Perhaps should be reviewed. But I wouldn't say it just worked on theory back then, neither will I say that now it is unidirectional in practice (because you still can make it go in any direction). And the main point isn't just that things made in China are cheaper. It's that China has so much freight going to all parts of the world that putting one container full of envelops with a single button inside doesn't cost a thing, so they win in on how much it costs to take an envelop from a post office inside China and deliver it to a USA / Europe / South America port. It costs about US 1,900 to take a container from Shangai to New York (source: https://www.searates.com https://www.searates.com ). That is cheap.

cbhl 9y ago

Subsidizing lettermail from poor countries seems reasonable. I might have to work for half an hour to earn enough to pay postage to anywhere in the world; it's undesirable for the recipient to have to pay three months' wages to send me a reply. Subsidizing businesses abroad seems less desirable, especially if it costs us millions of dollars a year. That should just be part of the price of the good, whether or not it goes through a US intermediary. Instead we have this weird system where purchases directly from China are subsidized by taxes, but domestic purchases are "full price".