How does AliExpress make money? Delivery is free, if the product is not the right one, they return the money, the prices are very low. Where is the profit?

How does AliExpress make money? Delivery is free, if the product is not the right one, they return the money, the prices are very low. Where is the profit?

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answers (7)

Answer 1
August, 2021

First of all, Chinese goods are inexpensive due to cheap labor. Secondly, they are delivered almost directly, just Aliexpress - it may be the only intermediary (or rather a specific seller on this platform).

Answer 2
August, 2021

The cost of Chinese goods is 100 times lower than they are sold on Aliexpress, so this is not a problem for them. But this affects the quality and safety of such products - they quickly break down and may contain harmful substances in their composition. I would definitely not recommend buying toys and cheap clothes for small children there, intimate goods and cosmetics from unknown brands, underwear from unknown manufacturers.

But this only applies to cheap products. There are many very high quality goods in China, there are large Chinese brands (Xiaomi), including clothes and underwear, but the cost of these goods is not at all low, it is almost like in ordinary Russian stores.

Answer 3
August, 2021

There are several parts here and a small amendment. Aliexpress earns on commissions. But about prices and shipping and returns:

  1. ChinaPost has very low mandrels, almost subsidized. Especially they are low on "small package".

  2. Aliexpress imposes onerous conditions on sellers and every seller who goes to Ali expects to earn primarily on scale.

  3. Yes, Ali, it's closer to production and their chain of cheats is shorter. And the logistics from production to point of sale are also shorter.

Answer 4
August, 2021

This is an illusion. Russian business has taught us to think that the prices of goods with a mark-up of several hundred percent are their real value.

Prices on AliExpress are closer to the real ones, although at least 3 parties earn money there: the seller, the post office and the AliExpress platform itself. As mentioned above, AliExpress is not a store, but a platform that unites many stores. In real life, it can be compared, for example, with the "Mega" mall - a shopping complex that does not sell anything itself, but only provides stores with rental services for a certain price. Similar business models on the Internet - Ebay, Amazon, Etsy.

P. S. When I started studying economics at the university, I was struck by the fact that about 90% of businesses are resellers, and the main price of a product is usually a margin, not a cost price. This is one of the realities of capitalism, and internet commerce is a step towards its improvement, towards a balance between cost and margin.

Answer 5
August, 2021

If I understand correctly, they also make money from processing credit cards. When you pay for your purchase, you pay through their system. I don’t know if they take anything from the sellers themselves.

Answer 6
August, 2021

Aliexpress acts not as a seller, but as a market where you can trade. The profit comes from the interest it takes from sales (most likely). Maybe transport companies pay for attracting customers)

Answer 7
August, 2021
  1. Believe it or not, delivery can be included in the cost of the goods. More precisely, if you do not take into account various promotions and sales, then the cost of the goods is already included in the cost of delivery.

  2. Refunds due to poor quality of goods, their loss during delivery or erroneous delivery of something other than what was in the order does not happen very often, and is rather an exception (for me, with about a hundred orders, two or three, and then all sorts of little things, such as protective films).

  3. Aliexpress is not a large online store, but a platform that acts as an intermediary between sellers and buyers. Most sellers value their reputation on aliexpress, since for many this site is the main source of income. If the seller's rating falls, fewer buyers pay attention to him, and in general, the store may close. Hence, such a desire to please the buyer follows (refund, re-dispatch of goods on demand, congratulations on the holidays and generally politeness in communication) and constant messages with a request to put five stars after receiving the order.

  4. Yes, the goods really cost that much. At the same time, the seller still makes a profit from the sale, he needs to live on something.

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