What am I missing - sourcing overseas / tiny margins

[moustachebandit]

Looking for some education!

Currently just looking into the opportunity for buying a small number of products from China and then retailing them over here. Buying and selling isn't my game so trying to educate myself before I take a plunge and have a go.

As part of my research I have been reviewing the hot sellers to get an idea of what product can be bought for and then sold for.

That lead me to this product:

https://www.alibaba.com/product-detail/In-Stock-Ho...

Buy price from £5.38 to £4.64 based on units.

Now I have seen this for sale on Ebay (everyone seems to be selling them) for a little over £8 with postage included, from a UK based location.

Thing is I cant really understand how they are making money (assuming its not the factory selling them direct from an in country warehouse).

Even if they bought 5k units to get the best unit price once they have added shipping, import duty, vat, listing charges, transaction costs & postage the margin they are making on each one has to be negligible? Also from what I can see none of the ebay based sellers seem to have that much stock to sell so they are clearly only buying 100 / 200 units tops.

So are they the busy fool, scrapping it out for the buy box and unwittingly pricing their product so low they are almost making nothing on each sale or is there some logic / other explanation to what they are doing? Really keen to understand how this works and how they can offer almost factory direct pricing in country.

Would really appreciate some insight if people can spare the time.

Cheers

[Jamescrs]

Likely the people on eBay are buying direct from the manufacturer and cutting out Ali Baba.

My dad has been running quite a nice small eBay business for years now on a niche product and he started out ordering on Ali Baba and eventually the manufacturer contacted him directly and now he buys straight from the factory in China for a significant discount.

[bazza white]

Chinese manufacturers also using UK fulfilment services. Not pretty as it skews the market.

[loafer123]

The model used to be subsidised Chinese post shipping, don't pay VAT.

Now the U.K. is much tighter on making sure VAT is paid on import, so margins have disappeared and prices should rise.