Why Everything on AliExpress Is So Cheap [The Real Reason]


Whether you’re are an online shopping enthusiast with a passion for finding discounts or knock-off items, or you’ve considered starting a dropshipping store with Shopify, it is highly likely that the Chinese company AliExpress has crossed your radar.

With the lowest prices for new items you will find anywhere on the internet, you may be tempted to believe that AliExpress is too good to be true. So what is the real reason everything on AliExpress is so cheap?

AliExpress is so cheap because it sends products directly from Chinese manufacturers to the end customer. Combined with China’s famously inexpensive labor and supply chain, AliExpress is able to offer low prices other retailers usually cannot match.

With that said, while you can find some unbelievable deals on AliExpress, it is always important to remember to keep your expectations in check and understand that you get what you pay for.

Read on to find out everything you need to know about why everything on AliExpress is so cheap. 

Why Is Everything on AliExpress So Cheap?

If you’re someone who is looking to spend there money a little smarter from time to time, buying things on AliExpress is not a bad idea.

The main reason everything on AliExpress is so cheap is because you are buying items directly from Chinese manufacturers. This eliminates any markup from a middlemen which then reduces the amount of time products are in transit, helping lower shipping costs.

When considering its highly concentrated supply chain that leads to world-leading labor and manufacturing costs, you can see how the business model of AliExpress lends itself to very low prices.

How Are AliExpress Prices So Cheap?

A basic understanding of supply chains and logistics makes it clear how AliExpress can offer such low prices.

Let’s take a look at a typical American supply chain as a point of comparison. Please note that this is a rather simplistic walk through a supply chain (many of which can become extremely complex), with certain industries requiring many more steps:

  1. Raw materials are sourced
  2. Raw materials are sent to a plant to be turned into component parts
  3. Component parts are tested for quality
  4. Component parts are sent to a different plant for product assembly
  5. Products are tested via a quality control process
  6. Approved products are sent for packaging and distribution
  7. Packaged products are sent to warehouses and distribution centers
  8. Products are listed for sale

Each one of these steps comes with a cost and requires worker hours. As a result of this, it can take many months to turn a raw material into a salable final product.

Because of this, companies are always looking for ways to simplify and create supply chain efficiencies. Amazon and Wal-Mart are two of the world’s leading retailers because they have figured out how to do just that.

They have robust store brands that reduce the need for middlemen, distribution centers located close to large populations, direct-to-consumer offerings, and (surprise!) utilize foreign manufacturing to lower the cost of production. This has allowed both companies to be low-cost leaders in the American retail industry.

AliExpress uses these same concepts and takes them to the next level. Because of China’s highly concentrated supply chain, products spend little time traveling from plant to plant during the manufacturing process and can often be ready for sale in as little as two weeks.

When products are ready to sell, those listed on AliExpress go straight from the Chinese manufacturer to the end customer, eliminating the costs associated with transportation, warehousing, and retailer markup.

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Is It Safe to Buy on AliExpress?

Yes, it is safe to buy on AliExpress.

In fact, the company even offers a buyer protection program to protect you in the event that your product does not arrive in good condition or is not what you order. 

To file a buyer protection claim, take the following steps:

  • Contact AliExpress customer support. The seller will be notified and given the opportunity to resolve the issue on their own.
  • If the seller is unwilling to rectify the situation, you can open a dispute with AliExpress.
  • If the matter is not resolved within a certain timeframe, AliExpress will refund your money.

You will usually get your money back within two weeks.

It is important to file your buyer protection claim by the last date listed on the guaranteed delivery window. If you wait until later, claims will be denied. 

Does AliExpress Sell Fake Stuff?

This is the major dispute in the online discourse surrounding AliExpress, and there is no clear answer. A lot depends on your interpretation.

Does AliExpress sell the highest quality items on the market?

No it does not. Not by a long shot. In fact, some of its products look cheesy in your hands if high quality is what you were expecting. 

As mentioned, China is renowned for the rate at which it moves products through its supply chain. At least part of this can be attributed to lower quality control standards.

So while similar products are tied up in quality control in the American supply chain, they may already be sold on the Chinese market. While this will undoubtedly lead to cheaper products at the cash register, it may also lead to “cheaper” products in terms of overall quality.

This is why filing a buyer production claim within the given window is extremely important when dealing with AliExpress. Products can wear out in a matter of days. This doesn’t always mean that you got “ripped off” though, it just means that you got what you paid for-a cheap, low-quality product. 

But does that make AliExpress a scam that sells fake stuff? After all, China is known for its robust counterfeit market.

I would argue no, AliExpress does not sell fake stuff.  

AliExpress is as honest as can be expected with its marketing. Sure, it makes its electronics look sleek and cutting-edge, but it never claims they are Apple. They may say “For Apple” or “Works with Apple” but it never claims its products “are” Apple.  

Therefore, if you get a charger at a fraction of the cost of an Apple charger and it doesn’t last as long or perform as well, can you really make any argument other than “you get what you pay for?”

The same can be said for its fashion products.

There is some stylish looking clothing and jewelry on AliExpress that may say “Compare to Gucci” or “Goes with Gucci.” It will come at a remarkably low price. But I can promise you that when the product arrives, you will be severely underwhelmed if you were expecting Gucci quality. 

As a result, I recommend using AliExpress for getting great deals on consumables. Clothes you will wear around the house when not trying to impress anyone. Cups and bowls. Chargers to get lost or destroyed by your children.

But if you are looking for top quality, pay extra and stick with the brands you know. 

Final Thoughts: Why Is Everything So Cheap on AliExpress?

Everything is so cheap on AliExpress because the platform ships all products directly from Chinese manufacturers to end consumers. This eliminates costs associated with middlemen and transportation. AliExpress is also able to leverage China’s affordable supply chain to keep prices low.

While it is always important to keep your expectations in check and realize that you get what you pay for, AliExpress is a great way to find some can’t-beat deals when shopping from home!

As always folks – thanks for reading!

Geek, out.

Noel

Noel is the founder and main contributor for his blog - Noel's passion for personal finance has helped him amass over 600k readers to his Financial Geek blog.

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