You’re browsing online and see an item for sale on AliExpress at a price that seems too good to be true. How can they sell that product so cheaply? You’re not alone in wondering. Many shoppers are curious about the real reasons AliExpress manages to offer such incredibly low prices compared to other retailers.
In this blog post, I’ll shed light on 10 insider secrets that explain why prices on AliExpress are low.
From bulk manufacturing and minimal marketing to flash sales and long shipping times, you’ll learn the clever strategies AliExpress leverages. Understanding the methods behind the markdowns will help you become a savvier online shopper.
Let’s dive in and demystify those hard-to-believe price tags! Learning these money-saving secrets will help you snag unbeatable deals and make the most of what AliExpress has to offer.
How is AliExpress so Cheap?
1. Most AliExpress Products are Sold Directly by Manufacturers
One of the biggest reasons behind the ultra-low costs on AliExpress is that you are purchasing products directly from the factories that manufacture the products. The vendors selling on AliExpress are the sources – they are the actual factories and supply warehouses themselves. This means there are no middlemen involved. You avoid all the distributors, wholesalers, retailers, and other supply chain entities that would each take a markup and bump up the eventual sales price.
When you buy on AliExpress, you are cutting out all those middlemen and their subsequent markups. You essentially gain access to the rock-bottom wholesale prices coming straight off the production lines and assembly lines. The AliExpress sellers know their precise manufacturing costs down to the dollar, and they pass on those original factory costs directly to you the consumer.
Contrast this with other ecommerce sites where independent resellers purchase bulk inventory and then sell to you at a markup. Those retailers are guessing at costs and still adding profit margins. With AliExpress, it’s pure unadulterated factory direct pricing. By tapping into wholesale rates straight from the industrial source, AliExpress provides completely transparent untarnished pricing you won’t find elsewhere.
2. AliExpress Advertising Spends are Minimal
Big retailers spend big on glitzy marketing. AliExpress sellers skip that route. The platform gives them instant access to millions of buyers already. No need for splashy ads. These sellers don’t budget for celebrities or Super Bowl air time. Their products speak for themselves. Reasonable pricing does the talking.
When prices are low enough, products sell themselves. AliExpress vendors pass the savings on. Those dollars stay in your wallet instead. Word of mouth on bargains travels fast. Compare prices and you’ll see the dramatic difference. AliExpress prioritizes warehouse-direct savings over flashy marketing.
3. Low Labor Costs in China
Factory workers in China make much lower wages. A fraction of Western salaries. This seriously reduces manufacturing costs. Products can be made with the same quality standards. Just produced where labor doesn’t eat up profits as much. These major cost savings start at the factory level. Then they get passed down through the supply chain. The wholesale cost stays low. And those savings ultimately reach the end consumer when you buy on AliExpress. You reap the benefits of the reduced labor expenses.
4. Power of Volume
Factories provide their lowest rates for giant bulk purchases. AliExpress sellers have huge buying power. They order inventory in the thousands per purchase. And negotiate the deepest volume discounts possible. The more they buy in bulk, the lower the costs. These sellers then pass on all the bulk savings directly to you. When you buy single items on AliExpress, you still enjoy the massively discounted pricing. It’s like gaining access to a wholesale membership club as an individual.
5. AliExpress Fees are Lower Compared to Other Retailers
AliExpress charges sellers only a 5-10% commission on sales. Compare that to Amazon’s standard 15% commission. This lower fee lets AliExpress sellers retain more profit. In turn, they can afford to lower costs for shoppers. The vendors still earn good money while undercutting prices on other platforms. They don’t have to inflate costs to offset high commission fees.
AliExpress recognizes that lower commissions benefit everyone. Consumers access bargains they love. Sellers thrive on high-order volumes. And the platform grows by understanding real shopper budgets. The minimal fees keep the flywheel spinning. Providing true warehouse prices is sustainable when commissions stay low. AliExpress built a model focused on community, not just revenue. You score savings thanks to their agent-friendly structure.
6. Minimal Customer Service
Customer service is lean by design on AliExpress. Human support costs money. So most queries are handled through automated self-service instead. Expect DIY resolution versus dedicated personal advisors.
But minimal customer service is part of how prices stay so low. And for most shoppers, the tradeoff is well worth it. The lack of premium support isn’t necessarily negligence either. It’s a strategic choice to control expenses. AliExpress recognizes buyers just want reliable products at unbeatable rates. So they focus resources on efficient fulfillment over concierge service. Unless issues arise, there’s no need for much back-and-forth.
The platform empowers you to find solutions yourself through robust help articles and FAQs. And if issues ever do come up, there are real people ready to help and a dispute management system in place.
7. Cheap & Slow Shipping
China heavily subsidizes a special ePacket shipping service to other countries. This allows Chinese sellers to mail goods internationally for very little cost. AliExpress suppliers also utilize the cheapest bulk shipping methods at every stage. Lots of ocean freight and ground transport to keep pricing down.
Of course, this means delivery takes much longer than local shipping. Packages can take weeks or sometimes months to arrive from China. But the benefit is rock bottom shipping costs passed on to you. Some sellers even offer free shipping.
Wait times feel long when we’re used to Amazon Prime delivery. But remembering the origins and distances these packages travel helps reset expectations. Slow and steady over fast and expensive is the approach. Prioritizing cost savings means you’ll wait longer for purchases. But your bank account will thank you.
Faster shipment modes like DHL and FedEx are available, but prepare to pay higher rates.
8. Currency Factors
The Chinese Yuan is currently weaker compared to Western currencies. Your US dollars, British pounds, and Euros go much further when exchanged for Yuan. The same $10 that buys a snack locally can purchase a full meal in China. This currency advantage means your money stretches incredibly far on AliExpress. The exchange rates multiply your purchasing power.
So even before discounted prices, you gain an immediate boost buying from Chinese exporters. A 20 Yuan item may sound ultra-cheap. But then factor in current exchange rates, and that price drops even lower in USD. What seems like a clearance bargain in Yuan becomes an even bigger steal after currency conversion. The mechanics of foreign currency work heavily in your favor. Your stronger Western money equals bigger savings when shopping on AliExpress. A little exchange rate math unveils an extra layer of discount.
9. Competition Among Sellers
Competition among sellers on AliExpress is fierce. Many companies produce the same products and list them on the platform. To stand out, they often offer lower prices and even free shipping to attract buyers.
Plus, you may find similar products that differ minutely available for a cheaper price. This intense competition benefits shoppers, as it drives prices down and encourages sellers to provide exceptional deals.
Looking for Extra Savings?
Beyond the above strategies that AliExpress employs to keep prices low, there’s another ace up their sleeve that savvy shoppers like you should be aware of – readily available discounts. AliExpress offers an array of coupons, promotional deals, and flash sales that can further slash the prices of your desired items.
- Coupons Galore: AliExpress provides a plethora of coupons that can be used to enjoy extra discounts on your purchases. These coupons can often be found on the AliExpress website or mobile app, and they can be applied during the checkout process. Currently, AliExpress is offering a $3 discount on orders over $30 with the coupon US3AFF and a $12 on orders over $100 with the code US12AFF. The coupons keep changing every month, so you can keep an eye out for the latest discounts here.
- Flash Sales and Limited-Time Offers: AliExpress frequently hosts flash sales and limited-time offers on various products. These sales events can yield substantial savings, and you can often find high-quality items at incredibly low prices.
- Store Discounts: Many sellers on AliExpress offer discounts for buying multiple items from their store. These discounts can be particularly attractive if you’re shopping for several related products. When you add items from the same store to your cart, you may see additional discounts applied at checkout.
- AliExpress Coins: AliExpress has its own reward system, AliExpress Coins, which can be earned by performing certain actions on the platform. These coins can be used to redeem additional discounts on your purchases. Accumulating and using AliExpress Coins is a great way to further reduce your overall costs.
- New User Discounts: If you’re new to AliExpress, you can often find special discounts and promotions designed to welcome first-time customers. These introductory offers can provide significant savings on your initial orders.
Wrapping Up: Why AliExpress is So Cheap?
The reasons behind AliExpress’ unbeatable prices are now clear. By buying directly from manufacturers, minimizing marketing costs, leveraging labor and currency differences, and optimizing shipping, AliExpress sells at wholesale prices in small quantities.
Now you can shop smart, setting expectations on delivery times and support but capitalizing on the huge discounts. Armed with the insider knowledge of how AliExpress keeps costs low, you can take advantage of the savings in a strategic way. Appreciate the global forces that make the pricing possible. If you are a drop shipper or if you are looking to buy in bulk, you should also check out Alibaba which is an AliExpress-like portal for bulk buyers/businesses. Happy shopping!