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> Historically, our merchants in China have benefitted from lower shipping costs due to the Universal Postal Union Treaty (“UPU”). Certain expected changes to U
by brd529 6y ago
> Historically, our merchants in China have benefitted from lower shipping costs due to the Universal Postal Union Treaty (“UPU”). Certain expected changes to UPU postal rates that went into effect in July 2020 are likely to increase the shipping rates our merchants incur to ship products from China. The actions we have taken in our logistics program to mitigate these increased costs may not be successful over the long term. If there are increases in shipping costs, the sales price of products on our platform could increase, which could reduce the volume of transaction activity on our platform to decrease and may consequently have a negative impact on our results of operations.
The S1 talks a lot about their logistics platform and diversifying their merchant base to come from different countries, instead of just China - and rightfully so, since until July Wish’s business was subsidized by the Universal Postal Union treaty. Thanks to the UPU, Before July it was cheaper to mail a package to Chicago from Shanghai than to shop to Chicago from Dallas.
This has now changed and so the era of cheap shipping from China is over. It’s unclear how much their logistics platform mitigates the new costs, but interesting that they had to go out and build their own fulfillment and cross border carrier services to mitigate.
- ikeboy 6y ago>Thanks to the UPU, Before July it was cheaper to mail a package to Chicago from Shanghai than to shop to Chicago from Dallas. Do you have a source on this? Most claims of this nature that I've seen fall apart on investigation - usually they compare a bulk wholesale rate for slow international shipping to a retail rate for priority domestic shipping to get this result. I'd like to see an apples to apples comparison that shows this.
- jdndbfbf 6y agoThe reverse is true. Shanghai to Chicago is cheaper than Chicago to Dallas. Trump said he was going to get rid of the subsidies but he never did.
- ikeboy 6y agoI'll ask again for a source. It should at minimum lay out the size and weight of the package, so I can verify the actual cost.
- jdndbfbf 6y agoGo do your own research. Look up the agreement. Usps last mile is free. 1 ounce. 4x4x2 envelope It takes 30 seconds to find something on aliexpress. I'm not going to spoon feed you
- pridkett 6y agoThat’s not really the ethos of this community. If you make a claim, you should provide context to back it up. Asking someone else to do your research and closing with “I’m not going to spoon feed you” isn’t how HN works.
- jdndbfbf 6y agoThen ban me. I don't care
- ikeboy 6y agoI've done the research several times when I've seen people making specific claims with specific prices, and each time I found it to be false. The cheapest USPS shipping for your dimensions and weight is $2.05 currently with parcel lightweight and sorting. Now what product is that size that you're comparing to? Note that the thickness here is important, as anything less than 3/4 inches thick can generally be sent in a flat envelope for considerably cheaper.
- totaldude87 6y agoI was a wish customer for hobby shopping (was :)) , and noticed the inflated shipping price change around start of the year (feb-mar 2020)(previously $1 shipping --> $3 shipping) and that was one of the reasons for me to leave that platform..
- ikeboy 6y agoInternational shipping prices went up across the board around then because of the face mask rush. The UPU change mentioned only happened in July.
- totaldude87 6y agoyeah, that matches with my timeline..
- aardvarkr 6y agoI know you’re skeptical and I would be too if I hadn’t heard of this before but it’s actually true. Planet money has two really good podcasts about exactly this topic. Here’s a link: https://www.npr.org/2018/08/23/641140144/unraveling-the-mystery-behind-international-shipping-rates https://www.npr.org/2018/08/23/641140144/unraveling-the-myst... https://www.npr.org/sections/money/2018/08/01/634737852/episode-857-the-postal-illuminati https://www.npr.org/sections/money/2018/08/01/634737852/epis...
- ikeboy 6y agoI've previously critiqued the mighty mug example. It has the exact issue I pointed to above - comparing the US retail rate to an international sorted rate. See https://news.ycombinator.com/item?id=21073682 https://news.ycombinator.com/item?id=21073682
- jsight 6y agoFrom the rates that I've seen, I don't see how they can possibly represent the real cost of shipping some of these items. They aren't injected into the USPS system close enough to the destination to be comparable to something like SmartPost for example.
- ikeboy 6y agoThat's certainly possible. I'm sure they lose money on some packages. But it's nowhere near the difference that people claim.
- jedberg 6y agoYour claim was disproved back then and it's still false now. You were comparing the shipping rates for someone who does all the sorting and long haul delivery vs China, who just dumps all the mail at the Port of Los Angeles, sorted into buckets by zip code.
- ikeboy 6y agoI was not doing a comparison, I was showing how the NPR numbers were dishonest. NPR claims that it costs $6.30 to mail something across the street. They never give a specific number for a shipment from China to compare to. Prices have gone up since then, but even today the most expensive option with no pre-sorting for 13 oz is only $5.39. It can go as low as $2.36 depending on the level of sorting. NPR is clearly not doing an apples to apples comparison, and nobody has tried to defend them, they just attacked the numbers I sourced. Now, you're saying that China does full pre-sorting to the zip code level but doesn't deliver to the closest location. This is roughly equivalent to the 5-digit DNDC option, which currently costs $3.56 - maybe slightly more because I don't know the exact details of how China delivers to the US. And it was lower at the time of the NPR article, which claimed the domestic price would be $6.30.
- Rebelgecko 6y agoIt used to be possible to get some cheap widgets on Aliexpress for $1. Even if you assume that the widget is "free", $1 seems like a great rate for shipping. Do bulk rates in the US compare with that?
- ikeboy 6y agoMany years ago it was possible, not recently. UPU rates used to be lower before 2015 or so. Also, for small, light products, it's absolutely possible to ship below $1. Full 5-digit pre-sorting and injection for a 1 oz flat costs 43 cents to deliver currently. Presorting but with no injection costs 81 cents.
- centimeter 6y agoI used to order shit from China for like $0.65 with free shipping back around 2008-2010, which I definitely couldn't do from vendors in the US.
- ikeboy 6y agoThat timeline makes sense. Ten years ago the UPU rates were lower than in recent years.