For every $100 product sold, the factory receives less than $5.
This is not alarmist talk, but a real account calculated by the owner of a 3C accessories factory in Shenzhen.
Platform commissions, advertising bidding, logistics surcharges, warehousing overage fees, return fines… After layer upon layer of skinning, the manufacturer has become the humblest beggar in the entire chain.
Cross-border e-commerce was once touted as a golden channel for Chinese manufacturing to “go overseas”.
Today, this channel has become a straw, one end plunges into the factory’s blood vessels, and the other end is connected to the platform’s profit pool.
Amazon, Temu, and TikTok Shop are no longer “bridges” but “digital landlords” – they do not produce, stock, or take risks, but they take the biggest piece of the cake from every transaction.
Take Amazon US as an example.
For a Bluetooth headset priced at US$29.99, the platform first deducts 15% of the commission, which is about US$4.50; if the advertising fee is not invested, the product will sink to the 10th page, forcing the seller to pay another US$3-5; FBA logistics fees (warehousing + distribution) will take another US$6-8; return processing fees, peak season surcharges, label correction fines… and other miscellaneous items will be deducted by US$1-2.
After seven or eight deductions, the platform and related parties took away US$15-20 from the US$29.99.
The remaining money should cover the cost of the headphones, domestic express delivery, first-leg shipping, and operating wages.
How much can the factory afford?
Less than $2.
If there is a wave of returns or advertising bids double, it is normal to lose $3 per order.
What about the platform?
It makes a profit without losing money.
When sales go up, the commission goes up; when sales go down, the inventory overage fee goes up.
Advertising bidding increased from US$0.5 to US$1.5 per click, and all the increase went into the platform’s pockets.
The shipping costs, depreciation, and labor costs for returns are all borne by the seller, and the platform is only responsible for pressing one button – “Refund.”
This kind of “all risks are transferred and all profits are retained” has turned the platform into a water pump in the e-commerce ecosystem.
What is even more frightening is that this set of rules naturally rewards “poor quality”.
Because good quality requires better raw materials, longer testing cycles, and higher costs, while low-cost inferior products can drive down the price, making it easier to obtain “low-price first” recommended traffic.
As a result, factories that produce quality goods are eliminated, and factories that produce junk goods survive.
Consumers thought they were getting a bargain, but in fact they were buying electronic waste that would break after a month.
In the end, the entire industry sank into the quagmire of “whoever takes it seriously will die.”
There is no shortcut to breaking the situation, but there is a bottom line that must be maintained: whoever bears production risks should receive reasonable returns.
Supervision should set a hard upper limit for the platform’s commission – for example, the total of commission + advertising + mandatory logistics fees should not exceed 30% of the transaction volume; at the same time, the platform should be forced to disclose the advertising bidding mechanism to eliminate black box price increases.
More importantly, factories must unite to establish their own brand channels, even if it is a little slower, they must not become the “blood bag” of the platform.
E-commerce has no original sin, but the current distribution model that bleeds manufacturers and enriches the platform is killing the roots of Made in China.
When a product is sold and the factory cannot even get 5% of it, the industry is no longer “trade” but “blood transfusion.”
The blood was drained and all that was left was an empty shell.
