If you’ve ever browsed through the Shein online store, there’s a good chance you’ve asked, “Why is Shein so cheap?”.
This is a question that many like you have asked.
And while its prices may seem too good to be true, there are various reasons they’re so affordable.
One of the reasons is because of Shein’s direct-to-consumer shipping. Shein cuts out the middleman by delivering directly to consumers, lowering their costs.
Secondly, Shein outsources its manufacturing to third parties.
This eliminates the need for manufacturing plants and related employees and allows them to purchase goods at wholesale prices.
Removing these costs means that Shein sells its products at lower prices.
It’s normal to be skeptical when products are so cheap. And one often wonders how some companies can offer products at these prices.
So, here is the rundown of everything you should know.
Why Is Shein So Cheap?
From its direct-to-consumer shipping to its influencer marketing, there are many reasons why Shein is so cheap. Let’s further explore why this retail giant’s prices are so low.
1. Direct-To-Consumer Shipping
Shein uses direct-to-consumer shipping. This allows it to cut out pricy distributors and keep its prices low.
Therefore, instead of paying distributors to store and ship its products, Shein ships them directly to customers from its global network warehouses.
2. Online Stores vs. Physical Stores
Another reason why Shein is so cheap is that it operates as an online retailer.
Online retailers like Shein often have lower overhead costs compared to brick-and-mortar stores.
Unlike physical storefronts, they don’t have to pay expensive rental and utility costs. This reduces operating costs, allowing them to offer their products at lower prices.
3. Small Order Runs Per Design
Instead of committing to large, bulk orders, Shein orders smaller quantities of different styles.
That way, they can adapt to changing fashion trends.
And it reduces the risk of sitting with unsold inventory. As a result, the company can keep its costs and prices low.
4. Manufacturing Is Outsourced
Shein has tight control over its manufacturing costs. The company outsources most of its manufacturing to third parties.
Many of its products are manufactured in factories in China.
This means it can benefit from wholesale pricing, which reduces costs. Lower manufacturing costs give the brand the option to sell at lower prices.
5. Uses Influencer Marketing vs. Expensive Ads
One of the main reasons why Shein is so cheap is their marketing strategy. Instead of running expensive ads online, Shein focuses on influencer marketing.
Influencer marketing allows Shein to reduce its advertising costs.
While the brand still has to pay the Influencer for the content, it has far more impact and reach than typical pay-per-click ads.
Using influencers gives Shein credibility and a far high return on investment for their ad spend.
As such, the company can offer its products at prices lower than that of its competitors.
There are several reasons why Shein is so cheap. The company’s influencer marketing strategy eliminates exorbitant ad costs.
And Shein’s direct-to-consumer shipping model reduces the costs associated with popular distribution channels.