retrolefty:
I've been speculating about this for years. All I can conclude is that they get direct gov subsides or tax credits on the actual shipping fees. Free shipping seems to be the norm on the Chinese E-bay listings.
I'm pretty sure they ship packets by containerloads to the destination countries, so that's cheap. Even so...the destination country still has to take it from the ship to your door.
I'm pretty sure I can't send a package to the next town for $2 so how do they get the post office to deliver one for a few cents? They must have some sort of a deal worked out.