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Comment by jrockway | Hacker News Reader

What if it's like airlines, where the full-fare and business class passengers subsidize the economy class? Maybe for every 3 cent button, someone is paying more than the marginal cost for their shipping, so it all evens out in the end?

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That's what I'm figuring. AliExpres's bread and butter is dirt cheap computer components and wholesale chargers and stuff for gas stations and the like. Their margin on that $100 android tablet is big enough to cover the shipping loss on hundreds of $0.03 buttons.

Aliexpress won't loss money, but vendors do.

Then why would they sell the 3-cent buttons?

So that people who need a 3-cent button use the service, are impressed by it and become higher margin customers later on.

Is there really any vendor loyalty on a site like AliExpress though? It just doesn't seem that likely to pay off. On the other hand, I assume the amount the vendor is losing on a transaction like this is also minuscule, so maybe it would.

I feel like I'm subconsciously much more loyal to services I have used than I would otherwise like to think. There is so much other stuff going on and I just can't be bothered going through the (probably easy) task of understanding a new service. So I just go back to the service that I've already used, know works, and does amazing things like ship 3 cent buttons for nothing.

But it's not the service you need to be loyal to in order for this to pay off, it's the specific vendor selling that 3 cent button, since they're the one losing money on the transaction.

Most vendors on AliExpress only sell such low-cost items in lots, so you could, for example, only buy these buttons by the dozen. Although that still means you end up with a margin that is ridiculously instead of ludicrously small.

Even in airfare, the economy seat costs more than the marginal cost.

And besides that, the commercial airlines do courier postal packages & letters for high priority stuff.

all the major courier services offer same day delivery across the US. I learned this when I flew from NC to CA and left my car keys in NC. I could have gotten them on the next plane to CA for about $300. It wasn't worth it.

I mean, I'm sure it is like that. But you have to ask yourself, why bother with the 3 cent transaction?

Repeat business on presumably larger transactions?

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