Dropshippers Who Rely on Cheap Chinese E-Packet Shipping at Risk
Earlier today a major story was published on the New York Times entitled “Trump Opens New Front in His Battle With China: International Shipping”. The overall summary is that as part of the ongoing trade war with China, the Trump Administration is terminating the subsidized, cheap shipping of Chinese goods to the United States. This is something that the President has mentioned numerous times.
An excerpt from the articles reads:
President Trump plans to withdraw from a 144-year-old postal treaty that has allowed Chinese companies to ship small packages to the United States at a steeply discounted rate, undercutting American competitors and flooding the market with cheap consumer goods.
Some E-Commerce Sellers Are in Panic Mode
Across various e-commerce forums many sellers are in panic mode. There are entire marketplaces and business models that thrive off of the cheap, inexpensive Chinese shipping, such as their e-packet delivery that allows a Chinese shipper to send a product to the United States cheaper than a person in the USA can mail it to themselves. Wish.Com is a major marketplace that thrives off of this business model and often advertises extremely low pricing and shipping with a disclaimer that it takes 2-3 weeks to arrive. Their advertising often starts with “if you can wait 2 weeks for delivery you can get 60-80% off”. That is because the goods sourced from China are extremely cheap and price to dropship an order to you from China is also extremely cheap with the e-packet delivery method.
Another huge slice of e-commerce businesses are sellers who have built entire stores on the Shopify platform utilizing dropship catalogs such as Oberlo. Oberlo (and other similar platforms) allow you to search a massive online catalog of products from Chinese sellers that you can easily add to your online store. When a customer purchases the item, the order is electronically transmitted to the manufacturer in China who then ships is to the customer. It’s nothing more than international dropshipping; however, it was only possible due to the extremely low shipping rates.
Some E-Commerce Sellers are Celebrating The Move
Then there are US-sellers who are celebrating. This has been a “long-time coming” said one US-seller. We have often looked at smaller products and wondered how eBay sellers were selling profitably. For example, we recently viewed a listing where an eBay seller was selling THOUSANDS of units of a headphone for only $4.95. That headphone would cost around $4.00 in USPS First Class postage alone if you shipped that in the United States. But it was shipping from China via e-Packet for less than $1.00. No wonder these sellers had the edge on the competition.
Although there has not been an official start date for this new policy, the article made it sound as if it would be starting soon:
State Department officials were expected on Wednesday to inform officials at the Universal Postal Union in Bern, Switzerland, a branch of the United Nations that administers the treaty, of their intention to pull out of the system and “self-declare” new, higher rates on China, a United States official said
How do you feel about this? Is this a WIN for sellers in the United States or is this a DEFEAT?
Sound off below in the comments, or visit our Facebook Group for E-Commerce Sellers.