Shipping from China/HK is very cheap. But still, as you say I don't know how they can create & ship something for so little cost.
Another cheap buy - I have purchased these Arduino Pro Minis for $US3.85 shipped, and they work perfectly :
http://www.ebay.com.au/itm/130839929399
(To program it you'll also need a FTDI USB to serial adaptor if you don't already have one, $AU4.68 : http://www.ebay.com.au/itm/200941246491 )