This U.S.Postal Policy Powers Chinese E-Commerce While Hurting U.S. Entrepreneurs

Like most people with lifestyles, up till some years in the past, Jayme Smaldone had never given much thought to global postal policy.

But eventually, he could no longer ignore the flood of knockoffs from China that were hurting sales of Mighty Mugs, his line of spill-resistant coffee cups, and glasses. “Retailers had been pronouncing, ‘Why do I have to purchase a product from you for fifteen bucks and retail it for thirty bucks when my clients can go browsing and buy the same product, in their opinion, for six or eight bucks?” Smaldone recalls.

Seeking to understand how the knockoff makers have been able to undercut his fees so dramatically, Smaldone ordered 30 one-of-a-kind versions, typically from eBay. One of them, shipped directly from China, arrived eight days later. The price: $5.69 – with delivery included.

“That blew my mind,” he says. He had assumed it might be shipped by sea and take weeks to reach that price. “How the hell are they getting transpacific air freight for $1.50 or $2?” he wondered.

The answer to that mystery is going a long way toward explaining why e-trade worked thewayr it did in 2019. The abundance of counterfeit and knockoff merchandise, some of it risky to youngsters, available for sale on Amazon, eBay, and other online retail systems stems mainly from the low price of labor and lax intellectual property rights enforcement in China. But it is also a result of global agreements that make it absurdly cheap to mail small applications from China to the States – cheaper, commonly, than sending the same bundle domestically within the U.S. Entrepreneurs like Smaldone say those agreements, a legacy from lengthy-ago eras of global change, quantity to a subsidy for Chinese manufacturers, one this is underwritten by customers of the U.S. Postal Service.