How can they make a profit ?

[Custard boy]

 

First I’m not a business man , so this may be a stupid question .

 

I was looking at the Lazada Thailand web site and they had one of their sales going on .

 

I came across a Digital Clamp Meter which was on sale for a total price of  ฿127.46  ( including postage and packing from China ). So I ordered one and it arrived today . I have tested it out and its working fine.

 

My question is this , at that total price of ฿127.46   including post and delivery from China , how do both the Lazada company and the Lazada seller make any worthwhile end profit .

 

What am I missing ?

 

.

 

[peterfranks]

Six years ago I bought a nose hair trimmer on Ebay for 40 baht including shipping.

 

Until today it still does the job

[ChaiyaTH]

1) Business owners that take out loans, sell very cheap, go bankrupt but keep the profits.

2) China is still regarded as a 'developing country' under International postage, making western countries pay for tons of their products being send abroad. This while they stole over 35% of the entire eCommerce market in for example Holland. 

Irony on that is that people think they buy it cheap in for example europe, but pay with their taxes for the shipping. Also this is not limited to western countries only, it also works out for Thailand that way. If they pay, it's a fraction of the real cost (shipping costs).

3) Unfair competition, as a Thai we can only sell in Thailand unless we have local shops in each SE asian country. Chinese however are allowed to sell to all countries. 

4) It is China, they produce on such a massive scale, the production or wholesale cost on 10,000 units for your product would maybe be 1 dollars. They are happy to only make 1 dollar profit as they sell a lot. 

We have to buy a lot if wanting that price, Chinese locally do not. 

Keep in mind you always been scammed by many of the multi millionaires (hundreds) who sold us retail products in the west, for like 2-3-4 decades, too.

Edited September 2, 2022 by ChaiyaTH

[Woof999]

It comes from a location where the workers involved are probably paid very little and have few rights.

 

A bit of a generalisation there which also highlights my own hypocrisy as I've bought from Chinese suppliers on Lazada at least twice this week.

[ChaiyaTH]

2 minutes ago, Woof999 said:

It comes from a location where the workers involved are probably paid very little and have few rights.

100% irrelevant, that counts for any of the products, even those sold by white label brands in the west. The only difference might be they produce higher quality products, does not change the workers involved at all.

No difference for how most of all the lithium is gathered, to make a so called 'green transition'. Hundreds of years ecological damage caused already, while we are not even at 5% of the desired production capacity, using a lot of children even.

[Woof999]

2 minutes ago, ChaiyaTH said:

100% irrelevant

The money earned by the workers involved is 100% irrelevant to the final price? Really?

[ChaiyaTH]

5 minutes ago, Woof999 said:

The money earned by the workers involved is 100% irrelevant to the final price? Really?

You are changing your own sentence now but yes, it is still irrelevant for the most part, even they are paid good, they can still produce it this cheap, and it is the shipping part that I explained above, playing the biggest role.

And if you wanna talk real cost of material, the planet and those gathering resources are paying the price. Not the assembly line in China.

 

Ever tried to apply a factory job in the west? You get paid just as horrible, even it might be enough for a basic life, which is the same for many Chinese. Try applying for a job at Amazon in the USA and tell us how nice it is.

Even you would agree on your now changed sentence here, that is still irrelevant to this topic, as that would apply to almost any products on earth, as 95% is produced or coming from there. Even it comes from Bangladesh, the same applies with postage etc.

Your reasoning to think a whitelabel A brand is doing it different than a non-brand on Lazada, is wrong too.

Edited September 2, 2022 by ChaiyaTH

[Woof999]

2 minutes ago, ChaiyaTH said:

You are changing your own sentence now but yes

 

2 minutes ago, ChaiyaTH said:

Even you would agree on your now changed sentence here

I wrote "It comes from a location where the workers involved are probably paid very little and have few rights." and "The money earned by the workers involved is 100% irrelevant to the final price? Really?"

 

Both statements appear to be in line with each other, but I'm not about to get into an argument about it.

 

Have a nice day.

 

 

 

[peterfranks]

4 minutes ago, ChaiyaTH said:

Ever tried to apply a factory job in the west? You get paid just as horrible, even it might be enough for a basic life, which is the same for many Chinese. Try applying for a job at Amazon in the USA and tell us how nice it is.

People are paid only $10 a day in the west or Amazon

[ChaiyaTH]

2 minutes ago, Woof999 said:

 

I wrote "It comes from a location where the workers involved are probably paid very little and have few rights." and "The money earned by the workers involved is 100% irrelevant to the final price? Really?"

If you actually read my comments previously, you would have gotten the answer. Again, no that is not relevant to this.

 

You could cry over so many things in that case, that it is sad some people are being paid peanuts, well, you can start looking around in Thailand too. Does that make prices cheap? No, you still pay 120 baht for a small beer sometimes.

Edited September 2, 2022 by ChaiyaTH

[peterfranks]

4 minutes ago, ChaiyaTH said:

If you actually read my comments previously, you would have gotten the answer. Again, no that is not relevant to this.

 

You could cry over so many things in that case, that it is sad some people are being paid peanuts, well, you can start looking around in Thailand too. Does that make prices cheap? No, you still pay 120 baht for a small beer sometimes.

I think you are grasping at straws to make your point.

 

I buy a certain item from China manufacturers directly for many years, so I buy in bulk and get FOB prices.

 

The same items are available on Lazada and Shopee, and often I can buy 1 piece, including shipping, cheaper that I can get it ordering 100 pcs of the same item from the factory

[OneMoreFarang]

When products come (in limited numbers) from sources like these then they can be sold very cheap.

That is obviously just one of the possibilities. 

 

[sead]

Now you also understand how much the shops are charging and making.......after imoorting

[kevin612]

Most likely it worth 30-40 baht, because these stuff in china are cheap.

[rak sa_ngop]

It could be that they are selling some items as a "loss leader" to get favourable reviews? The next time you order from this company it might be a different story.

[CharlieH]

Reported post removed.

[Kwasaki]

10 hours ago, Custard boy said:

What am I missing

The millions of other items sold, bit like 7-11 and Ma & Pop shops,  they rely on numbers. 

[BritManToo]

10 hours ago, ChaiyaTH said:

No, you still pay 120 baht for a small beer sometimes.

Local drink is rice whiskey, 10bht a red bull/M150 bottle.

[Tanna]

12 hours ago, peterfranks said:

Six years ago I bought a nose hair trimmer on Ebay for 40 baht including shipping.

 

Until today it still does the job

Your nose or the machine?

 

[transam]

Mr.DIY is incredibly cheap, mostly Chinese stuff, as for Lazada sales, perhaps mountain high stuff in China, that has to be sold off somehow....

[Antiparovian]

What is a clamp meter?

[Scott Tracy]

Who the hell cares? It's not something that taxes my mind.

[Sweet Swede]

I now use Lazada to do do most of my "hardware" purchases. Until now I have done +/- 400 different. A lot of the stuff I ordered I will not find in shops here and for finding not on shelf equipment Lazada is excellent. As an example:  I buy green coffee beans that i I roast myself and find a great variety of beans, even imported to a very good price on Lazada. I tried Shopee but they did not accept my debit cards, so I now only use Lazada. Also payback for cancellations and defect deliveries(not many) have been uncomplicated. 

[Jai Dee]

More reported troll posts have been removed.

[Eaglekott]

On 9/3/2022 at 12:28 PM, Antiparovian said:

What is a clamp meter?

It's about 0.37 metric meter. The hight of the unit or a device that measure clamps.

 

Kidding, it's a meter that measures how much currency that flows through a cable. Good to use if your fuses in the house blows and you are unsure what causes it. Most models work on AC currency only. 

[retiree]

On 9/2/2022 at 11:16 PM, Custard boy said:

how do both the Lazada company and the Lazada seller make any worthwhile end profit .

To get back to the original question, I think there are several reasonable explanations.

First, Walmart sells an apparently identical item -- same part number -- for $9.09.  Gross profit 24.4% (est) 2022, but for items like this I could imagine they're paying the same as you or less per item.
https://www.walmart.com/ip/DT3266F-Portable-Digital-Multimeter-Clamp-Meter-AC-DC-Voltmeter-Ammeter-Tester/171810582?

Second, the marginal cost of production of one unit is probably very, very low -- think of cosmetics.  There are many similar products, with minimal product differentiation, and assembled with minimal labor.  I would think that just about all of the parts are just commodity items, some of which (the switch and most of the internal electronics) are used for other electronic doodads as well.

Third, it's not unreasonable to imagine that even, if Walmart "owns" this particular design, the Chinese producer might have the right to sell to the ASEAN market.  Or might have just licensed it to Walmart's (I think) 24 countries themselves. 

Fourth, these particular units might have failed Walmart's quality controls (laughs!), but are still good enough for most home applications; e.g. seeing if a wire is live, which doesn't require high accuracy.  Think of factory outlet stores -- selling rejects is a common business model.

Fifth, yes, companies do go bankrupt, and yes, their stock is usually sold off very quickly and cheaply by the creditor (who is in the money business, not the clamp business).  Think of Big Lots stores.

Sixth, Lazada is locked in a death battle with Shopee -- has either one ever had a profitable year?  So for now, at least, losing money to build market is part of the business plan. 

Seventh, I think that our notion that it should be more expensive is anchored in the fact that very similar looking tools may provide more functionality and much higher quality / circuitry, for a higher price; check out Fluke.  

 

Interesting question, 

-- Retiree
 

[problemfarang]

On 9/2/2022 at 11:16 PM, Custard boy said:

What am I missing ?

made in china..

[NoshowJones]

On 9/3/2022 at 12:20 PM, transam said:

Mr.DIY is incredibly cheap, mostly Chinese stuff, as for Lazada sales, perhaps mountain high stuff in China, that has to be sold off somehow....

Yes Trans, a new Mr DIY has just opened in my village and it is really cheap as you say, only one downside, I bought an electric shaver for about 200Bt hoping to get a couple of months out of it. I tried it out and it did not shave very well at all, just a pity I did not keep the receipt.

[Sparktrader]

Mass produced $2 junk

[retiree]

Au contraire mon frère, I must demur!  Mr DIY is the greatest store ever!  It perfectly fills the spot between the local 29 baht store (e.g. kitchen stuff if you're just renting a room for two weeks, pillows for your feet), and HomePro (pillows for your head, cheap to moderately expensive plumbing fixtures, appliances, TVs, etc).   

 

Mr DIY has:  plastic pots for gardening, incredibly cheap very thick rubber mats (from India) for kitchen floor, very cheap but good quality cable and hair ties, rubber hoses & quick release fittings, holders for the bathroom & kitchens walls, terrific hot-water makers, clip-on mini-strobes for biking or walking at night -- I mean, really!  is there anything they don't have?   

 

Horses for courses:  not all, but many, high-quality products can be manufactured and distributed cheaply nowadays.   I think that the company (which is Malaysian) has really skilled buyers doing their sourcing & purchasing.    Although I personally would probably not buy any precision tools like cheap shavers there ????  

 

-- Retiree