How do they make a Profit?

[MGMatt]

This 52 pice tool set was linked to in another thread.

http://www.alibaba.com/product-gs/220426901/52pc_Socket_Set.html

The tool set is priced at $0.01 each min order of 2000.

Amazon has the same tool set for $13.97 ($4.02 off the regular price)

http://www.amazon.com/dp/B00008RW9A/?tag=atomicindus08-20

Subtract a few cents for overhead, shipping(from china), customs... call it $13 profit for Amazon. Not bad for a one cent item. Now the factory in china that is making a 52 piece socket set and selling it for one cent, what is the real cost?

 

[Techniker]

This 52 pice tool set was linked to in another thread.

http://www.alibaba.com/product-gs/220426901/52pc_Socket_Set.html

The tool set is priced at $0.01 each min order of 2000.

Amazon has the same tool set for $13.97 ($4.02 off the regular price)

http://www.amazon.com/dp/B00008RW9A/?tag=atomicindus08-20

Subtract a few cents for overhead, shipping(from china), customs... call it $13 profit for Amazon. Not bad for a one cent item. Now the factory in china that is making a 52 piece socket set and selling it for one cent, what is the real cost?

Because they're not selling it at $0.01. Alibaba, while having very good prices on a lot of items, is fraught with false listings. They put an outrageously low price so that when you go to sort by price, they show up first. If you were to actually go and place the order (for 2000 sets), you would soon find yourself being contacted by the seller to negotiate a price- you're not getting 2000 sets for twenty bucks.

I had what appears to be that very same set at one point- I put it in my girlfriend's car as an emergency set...I wouldn't even use it for that. The gear drive spun useless in the ratchet head after any amount of real torque and the extension twisted in half.

-Techniker

 

[MGMatt]

Because they're not selling it at $0.01. Alibaba, while having very good prices on a lot of items, is fraught with false listings. They put an outrageously low price so that when you go to sort by price, they show up first. If you were to actually go and place the order (for 2000 sets), you would soon find yourself being contacted by the seller to negotiate a price- you're not getting 2000 sets for twenty bucks.

I had what appears to be that very same set at one point- I put it in my girlfriend's car as an emergency set...I wouldn't even use it for that. The gear drive spun useless in the ratchet head after any amount of real torque and the extension twisted in half.

-Techniker

Something tells me the seller would not want to be bothered with only 2000 units. But if you are Wallmart or Amazon and are looking for 500,000 units each quarter, the price gets a lot closer to $0.01.

 

[briggsguy17]

And sometimes they don't sell it to make a profit. If the quality is so bad and the sales figures are very low they will sell for whatever they can get. A loss is better than nothing at all.

 

[Kirbot]

If that is even a real listing (which I really doubt), it's just a closeout.
Basically, they aren't making any money. They just need to get them out of the warehouse to make room for something else.

They is no possible way they are making any money on them.

They are worth more than that just as scrap metal.

 

[Techniker]

Something tells me the seller would not want to be bothered with only 2000 units. But if you are Wallmart or Amazon and are looking for 500,000 units each quarter, the price gets a lot closer to $0.01.

Closer? Sure- in the same way that if I walk south toward the equator during the day I get closer to the sun. It's not approaching $0.01 (it gets closer, but it's not approaching- two mathematically distinct concepts) and Walmart/Amazon are paying more for it than $0.01. The product is worth more than that in scrap metal (good quality steel is going for $0.82/lb; scrap **** iron ~$8-$11/100 lbs).

Another one of the many examples: http://www.alibaba.com/product-gs/278385850/10in1_Oil_Reset.html

Try ordering it for a dollar. It won't happen.

 

[Kirbot]

And sometimes they don't sell it to make a profit. If the quality is so bad and the sales figures are very low they will sell for whatever they can get. A loss is better than nothing at all.

X2.............