Why Is Stuff On DHgate So Cheap?

Source: DHgate, Tag: E-Commerce Tips

DHgate has become China's leading e-commerce platform because of its great value products. But why are items on DHgate so cheap?

• We're asked all the time: Why is stuff on DHgate cheap as compared to other places? It's actually quite simple. And saving money is good, right? Let's take a look at why you can find such a good deal on this world’s leading online marketplace for China-made stuff.
  You can buy almost anything on this website, from clothing to electronics, and we all know that people like getting a good deal. We've put together a few reasons why items are so cheap.

• Some Suppliers Sell Cheaply to get Rid of Excess Stock
  The majority of sellers on DHgate are manufacturers, suppliers, and wholesalers who are looking to get rid of their excess stock. Often, these suppliers have excess inventory which they sell at a lower price to move it out the door faster. They're not looking to make a huge profit, just enough to cover the costs of manufacturing and a little bit more. So they sell their products at an incredibly low price.
  There Aren't any Middlemen Involved
  The prices are low because there are no middlemen involved. The manufacturers or sellers sell directly to you, so you don't have to pay extra for the additional cost.
  What do I mean by "middlemen"? Well, let's use a toy as an example. Let's say you want to buy a toy and you go to a store in your country and buy it. It will cost you more than $15. In fact, that's probably a low price for such a toy in your country. Now, there are other stores that sell exactly the same toy for $10 - but why is it cheaper? There are no middlemen in the supply chain - so it costs less.
  So now you've got two choices: buy the same toy for $10 or $15? You'd buy it for $10, right? And that's why DHgate has so many bargains. It is because it comes directly from factories and producers who sell their products at very competitive prices.
  DHgate Has no Physical Store
  There are a lot of reasons why you can find stuff on DHgate at cheap prices. But the main reason is one that all of us can appreciate - the sellers are saving money, so they pass the savings on to you. It's simple, really! Since there is no physical store involved and everything is done online, sellers can save a lot of money without having to bear the cost of retail space or staff members. They pass these savings on to you. This is one of the most important reasons why stuff on DHgate is so much cheaper than in stores or other online sites that have an offline presence too.
  DHgate is an online marketplace, which means that it is not limited to any particular geographic area. Even though the company has operations in China, its main business is conducted online, which means that the company does not have to pay rent for a physical store in your city or country. It doesn't matter where you live, because the company will still sell you products at cheaper prices than a local vendor.
  When sellers list their items on the platform, they do so from the comfort of their own homes or their warehouses. This means that the sellers don't have to pay rent, taxes, electricity bills, and other expenses associated with operating a physical store. Most of the sellers are wholesale suppliers, and they don't have to pay employees to run the store. They only need a laptop computer and an Internet connection. With the low overheads that come with selling online, sellers can sell their stuff at a cheaper price.
  You Negotiate with the Seller
  On DHgate, there are different pricing options for every product, which gives you the option to negotiate with the seller before making your purchase decision. This also helps you get good deals and discounts. Some sellers reduce their prices even more if you buy more items from them, so shop around and take your time before making a final decision.

DHgate is very Good at Keeping Costs Down
Why is stuff on DHgate so cheap? The company itself has played a big role in ensuring that the costs are down. The company has spent millions of dollars developing a website that is safe and secure and they spent a lot of time putting systems in place to block any scammers from using their site. Because they are so popular, they have great buying power and this also keeps their costs down.
DHgate Sell in Bulk
One of the main reasons why items on DHgate are so cheap is because the sellers sell in bulk. In fact, most sellers will state that the more you buy, the less expensive it will be for you per item. If you want to buy one or two items, chances are, that is going to be a little more expensive than if you were to buy 10 or 20 items from the same seller.
Think about it. When you're buying a manufacturer's wholesale lot, you're buying directly from the distributor. You don't have to pay for extra fees and taxes that are added when buying retail. This helps a great deal in ensuring that the price is kept low.
Shipping costs from China are also reduced greatly when you buy items in bulk. Wholesalers and suppliers offering free shipping can save a lot of money compared to the same items being shipped individually or in small quantities. As a result, the suppliers pass the savings to you when you buy in bulk from them.
Stiff Competition among Sellers
The basic idea behind DHGate is that all the sellers are allowed to offer their items at whatever price they want. While some may think this leads to exorbitant prices, it's actually the opposite: Because all sellers are competing with each other for business, the price goes down. This is a great way to save money on electronics, clothing, and more.
Things on DHgate are so cheap because the company and sellers know you can buy these items elsewhere for a higher price, and they're offering you a deal. They do this to remain competitive.
Low Production Costs
Second, know about Chinese manufacturers. China has long been a manufacturing powerhouse for many different industries because of one simple reason – cheap labour. This low cost of labour allows manufacturers to produce goods at very low costs, which means lower costs for customers while still making a profit. In addition to that, Chinese manufacturers are experts at producing high-quality products at low costs. Chinese factories were the first to adopt many manufacturing technologies like advanced robotics and 3D printing which enables them to manufacture high-quality goods with less human labour required. This means that businesses can produce more items at a lower price, which means lower costs for customers.
China is the world's factory, so, of course, items are going to be cheaper when they're mass-produced. This is a simple principle of the economies of scale.
Fee Structure is Low on DHgate as Compared to other e-commerce Websites
DHgate is working on a commission basis. There are many other eCommerce websites that are also working on a commission basis but the DHgate commission is very low. For example, Amazon takes 15-20% commission from sellers, eBay takes 10-15% commission from sellers, but DHgate takes only about 4% commission from the seller. This means that it costs sellers less money to sell stuff on the platform. Much of the cost saved is passed to buyers. So, you can buy products at cheap prices because of the low commission structure.
What’s more, the company doesn't charge sellers listing fees, final value fees, or monthly store maintenance fees. This means sellers can offer their products for lower prices than on other websites.
No Money Spent on Advertising
DHgate doesn't spend any money on advertising. It has no ads. There are no billboards, magazine ads, TV commercials, or email lists to maintain. Instead, the company relies on visitors’ word-of-mouth and their own search engine rankings to attract new buyers. This is one of the reasons why there are so many cheap products on site.
DHgate is a very popular website and doesn't need to spend money on advertising. Most suppliers sell the same product in various eCommerce stores. But because DHgate has a lot of customers that come directly to the site and it doesn't have to spend money on advertising, suppliers can reduce their prices by as much as 60% or more. This makes DHgate so cheaper.
Low Taxation
We all know that when we buy something, the price is not just for the product we're buying – it also includes taxes, fees, and other charges. When you buy from a regular shop, you pay for all of those things. So, why is stuff on DHgate so cheap? It is because when you buy from this platform, most of those costs incurred by regular shops and other e-Commerce sites are removed. Because DHgate is based in China and sellers as well, there are fewer fees and taxes that get added on to the price of items. This means you will pay less for them--sometimes much less.
In China, there is no sales tax (VAT) and no national income tax. The only taxes levied are local and paid by the company. That makes prices a little lower than they would be in Europe or North America.
Frequently Asked Questions
Are there any fees associated with Buying from Sellers on DHgate?
It depends on the seller's pricing policy. Most of our sellers offer free shipping, while some charge for shipping.
Why is Stuff on DHgate so Cheap?
There are many reasons why things are much cheaper at DHgate than at other online shops. First, there are no marketing costs for any products. Secondly, there's no middleman between you and the manufacturer who will add his profit margin to the price of the product. Also, the production cost is very low.
Why do some Suppliers have a Minimum Quantity Requirement (MOQ)?
The MOQ is set by the supplier because they have a standard cost in producing their products, and they need to make sure they have reached this cost when selling their products. If the MOQ is not reached, the profit will be lower than expected, and therefore most suppliers are unwilling to take this risk as they are running a business. However, if you have a large order and can negotiate with them, they will definitely give you a better price.
Are the Items on DHgate Authentic?
All products on the website are brand new and of high quality. Every order is checked carefully by the company’s staff before it is shipped out.
How can I trust DHgate Sellers?
For your protection, the company offers Buyer Protection to ensure that your purchases are safe and secure. They offer full refunds or a free reshipment if your items do not arrive as described or don't arrive at all.
Summary
For sellers, DHgate is a place to increase sales through many channels, including a business website, eBay, Amazon, and Facebook. For buyers, it is the place to get lower prices directly from the factory or manufacturer. But why is stuff on DHgate so cheap? The reason behind the cheaper price is that there are no middlemen as buyers and importers can contact the manufacturer or supplier and from them directly. The labour cost in China is also much lower than in western countries, so they can produce products at cheap prices. Moreover, most factories in China can provide products according to customers' requirements which means small quantity orders can be accepted too.