10 Real Reasons Why Everything on Shein Is So Cheap

If you’ve ever shopped online for trendy, affordable fashion, chances are you’ve come across Shein.

With dresses for under $10, tops for just a few dollars, and even entire outfits cheaper than a takeout meal, it’s no wonder Shein has become one of the biggest online fashion brands in the world.

But this raises a big question: Why is Shein so cheap?

Is it because they’ve found some secret cost-cutting formula, or are there more factors behind the ultra-low prices?

Quick Answer: Why is Shein so cheap?

Shein keeps prices low by selling directly to consumers, avoiding physical stores, using a rapid design-to-production cycle, manufacturing in low-wage regions, buying materials in bulk, relying on underpaid labor, using synthetic fabrics, minimizing marketing costs through social media, and benefiting from subsidized international shipping rates.

In this article, we’ll break down 10 key reasons why Shein can sell clothes at such incredibly low prices.

Keep reading, we’ve got all the answers for you!

10 Reasons why Shein is so cheap

Here are the 10 reasons why Shein is so cheap:

1. Direct-to-consumer model without middlemen
2. No brick-and-mortar stores
3. Rapid design-to-production cycle
4. Trend-based manufacturing with minimal inventory waste
5. Factories in China and other low-wage regions
6. Bulk material purchases
7. Reports of underpaid labor and poor working conditions
8. Use of synthetic fabrics and cheaper materials
9. Low-cost digital marketing strategies
10. Subsidized postal rates

Let's discuss them one by one:

1. Direct-to-consumer model without middlemen

One of the biggest reasons Shein is so cheap is that it sells directly to you without any middlemen.

This is different from a typical brand that designs its clothes, works with wholesalers, sells to distributors, and finally places products in retail stores.

Each of these steps adds extra costs for the company—wholesalers and retailers need to make a profit, which increases the final price you pay.

Shein removes all these extra layers and sells its products directly to consumers through its website and mobile app.

This direct-to-consumer (DTC) model allows them to skip retail markups, making their clothing much cheaper than that of brands that sell in department stores or boutiques:

But Shein takes it a step further.

Unlike many big online fashion retailers, Shein doesn’t hold large warehouses full of inventory.

Instead, it operates on a real-time production model—meaning items are made in small batches based on demand.

Another unique aspect of Shein’s business model is that it uses AI and customer data to determine which styles are trending, which items are selling fast, and what designs should be made next.

So, instead of guessing what customers want months in advance (like traditional fashion brands do), Shein reacts in real-time.

If an item doesn’t perform well, they simply stop producing it. If something is a hit, they scale up production almost instantly.

This ultra-responsive system allows Shein to reduce waste, cut costs, and quickly push new styles—all while keeping prices low!

2. No brick-and-mortar stores

Another big reason Shein is so cheap is that it doesn’t have physical stores.

Unlike brands like H&M or Zara, which have thousands of retail locations worldwide, Shein operates 100% online.

This saves them a huge amount of money.

Think about it—running physical stores means paying rent, utilities, store employees, security, and maintenance costs.

All these costs get passed on to customers in the form of higher prices.

But because Shein is online-only, they completely avoid these expenses.

And since Shein doesn’t have to deal with the slow-moving logistics of stocking physical stores, they can launch thousands of new products every single day.

Even though Shein doesn’t have permanent stores, it occasionally opens temporary "pop-up shops" in major cities to give customers a chance to see and try on their clothes in person:

The catch is that shoppers aren't actually allowed to buy anything, they need to order the items online.

So, it's just a clever marketing trick to keep people engaged without the long-term costs of running physical locations.

3. Rapid design-to-production cycle

Unlike traditional fashion brands that plan their collections months in advance, Shein moves at lightning speed.

It turns a design idea into a finished product in as little as 7 to 10 days.

To put that into perspective, big brands like Zara take three to four weeks to develop a new item, while traditional retailers like H&M, Forever 21, or department stores can take several months to design, produce, and stock it.

Once Shein identifies a trend, their design team works quickly to create digital sketches and samples, often tweaking existing designs rather than creating something from scratch.

This reduces time, labor, and design costs, which helps keep prices low.

Instead of mass-producing thousands of pieces at once (like traditional brands do), Shein starts with small batch production—usually just 100 to 200 pieces per new item.

These items are released online almost immediately, and Shein watches how customers react.

• If a design sells well, Shein ramps up production quickly and makes more.
• If an item doesn’t sell, they simply stop producing it to avoid losses.

Because of this fast design process, Shein is often the first to market with new fashion trends.

Some critics say Shein copies looks and designer styles, but the truth is that many brands do this—Shein is just faster and cheaper than most.

If a celebrity wears a viral outfit today, there’s a good chance Shein will have a similar version for sale within a week or two, priced at a fraction of the cost:

4. Trend-based manufacturing with minimal inventory waste

As mentioned before, Shein doesn't make clothes that won't sell.

Most fashion brands produce massive amounts of inventory before knowing if customers will actually buy it.

If a collection flops, those brands end up with unsold stock, forcing them to offer discounts or even throw away perfectly good clothes.

Shein’s on-demand, minimal inventory approach means that:

• They don't have huge storage warehouses filled with unsold clothes.
• There are no high costs from clearance sales.
• There is no overproduction waste that eats into profits.

Since Shein only makes what sells, they can keep prices incredibly low while still making a profit!

5. Factories in China and other low-wage regions

Another reason Shein can sell clothes so cheaply is that most of its supply chain is based in China, where wages are lower compared to Western countries.

If it costs a Western fashion brand $10 to produce a shirt, that same shirt might cost Shein only $1 or $2 to make in China.

Since Shein operates on thin profit margins, it can sell the Chinese shirt for $5 or $6 and still make money.

Some people wonder: Why doesn’t Shein make clothes in the US or Europe?

The answer is simple, it's all about the cost:

• A factory worker in China might earn $2 to $5 per hour.
• A factory worker in the US must be paid at least $10 to $15 per hour (or more, depending on the state).

If Shein moved production to the US, its prices would skyrocket.

Instead of a $10 dress, you’d be paying $40 to $50.

Another factor that helps is that Shein’s entire supply chain is mostly in China.

This means:

• Faster production. No delays in waiting for materials to arrive from overseas.
• Lower transportation costs. Fabric, trims, and accessories are all sourced nearby.
• Cheaper bulk purchasing. Buying materials in China costs less than in Western countries. More about this next:

6. Bulk material purchases

Just like buying in bulk at a wholesale store saves you money, Shein applies the same volume strategy on a much larger scale—ordering thousands, even millions, of meters of fabric at a time.

This allows them to get big discounts on materials.

For example:

• If a small clothing brand orders 1,000 meters of fabric, they might pay $3 per meter.
• But if Shein orders 100,000 meters, they might only pay $1 per meter, which saves them millions of dollars across thousands of designs.

These bulk savings apply to everything Shein uses—fabric, zippers, buttons, elastic, packaging materials, and more.

Shein also buys fabric leftovers and surplus stock from suppliers, which includes materials that other brands might not use.

This "use everything" approach further reduces costs and keeps prices low.

7. Reports of underpaid labor and poor working conditions

While Shein’s low prices make it a favorite among budget-conscious shoppers, the brand has faced serious criticism for its labor practices.

Quite a few reports show how many of the workers who make Shein’s clothing are underpaid, overworked, and working in poor conditions.

Multiple investigations have found that some Shein factory workers:

• Work 14 to 16-hour shifts, often seven days a week.
• Receive low wages, with some workers reportedly earning as little as $556 per month despite working 18-hour days with only one day off per month.
• Get paid per garment instead of an hourly wage, meaning they must work extremely fast to make enough money.

A 2022 undercover report by Channel 4’s “Untold: Inside the Shein Machine” found that some factory workers were making just 4 cents per garment and had no official breaks during their shifts.

And the story continues with the poor factory conditions.

Reports suggest that many factories:

• Have no windows, ventilation, or air conditioning, making it extremely hot inside.
• Lack safety regulations, meaning workers use dangerous chemicals and machinery without proper protection.
• Do not provide contracts or legal protections, leaving workers vulnerable to exploitation.

This leaves us with the question; why does Shein use these factories?

Well, Shein often changes suppliers based on who can deliver the fastest and cheapest production.

This means that factories are constantly pressured to produce more in less time.

And because Shein outsources to thousands of different suppliers, it is difficult to monitor and regulate every factory’s working conditions.

After facing backlash, Shein announced in 2022 that it would invest $15 million to improve working conditions in its supply chain.

However, a newer study from 2024 found that not much has changed:

Shein isn’t the only brand that has faced criticism for labor issues.

Major fashion companies like H&M, Zara, and Nike have also been accused of using sweatshops and exploiting low-wage workers in the past.

This is because the fashion industry relies on cheap labor to maximize profits, and fast fashion brands like Shein take this to the extreme.

Because their prices are so low, Shein has even tighter profit margins, making it even harder for them to afford ethical labor practices.

This raises the big question: Is it okay to buy from Shein, knowing the ethical concerns?

We’ll explore that more later on!

But first, a few more reasons why Shein is so cheap:

8. Use of synthetic fabrics and cheaper materials

If you’ve ever ordered from Shein and noticed that your clothes feel thin, stretchy, or slightly plastic-like, it's because they use synthetic fabrics and lower-cost materials instead of high-quality, natural textiles.

Most Shein clothing is made from materials like polyester, nylon, acrylic, or spandex.

These fabrics are mass-produced at low costs, which helps Shein save money on production.

Shein also:

• Uses less fabric per item to save costs (e.g., a thinner sweater uses less material than a thick one).
• Blends synthetic fibers instead of using 100% of one material.
• Skips extra finishing steps like double stitching or reinforced seams.

This is why Shein’s clothes can look great in pictures but sometimes feel different in person:

9. Low-cost digital marketing strategies

Traditional fashion brands spend millions on advertising through magazine ads, billboards, and celebrity endorsements.

Shein, on the other hand, uses social media and influencer marketing to promote its products for a fraction of the cost, at an extremely high efficiency.

One of Shein’s most powerful marketing strategies is its hashtag challenges and viral trends on TikTok and Instagram.

For example, the #SheinHaul hashtag has billions of views, with customers showing off their latest Shein purchases:

Besides that, Shein also sponsors TikTok influencers to create try-on videos, fashion lookbooks, and styling tips.

They pair it with limited-time discount codes to encourage people to shop.

This strategy is much cheaper than traditional marketing and helps Shein reach millions of potential customers without spending a fortune.

10. Subsidized postal rates

Ever wondered how Shein can offer free or super cheap shipping, even though your order is coming all the way from China?

The answer lies in the Universal Postal Union (UPU), an agreement under which countries will carry other countries' parcels for a small fee or even for free.

The UPU is set up so that rich countries pay a higher fee to get their international mail delivered while developing countries pay a much smaller fee.

For many years, China was seen as a developing country and benefitted from insanely low shipping rates.

According to the CBC, shipping a part from China to the US could cost less than $1, while shipping that same part within the US would cost $22.99.

The difference in cost is paid by the American taxpayers.

Of course, this agreement heavily benefits China, while it's a huge cost for the US.

So, in 2018, Donald Trump threatened to pull the country out of the UPU.

After some negotiations, the US was allowed to raise its fees, while Canada and other countries can raise their fees by about 16% annually.

So, the shipping cost from China has been rising and will be doing so in the coming years.

However, the shipping costs from China are still lower than what they cost in reality, and it's an important reason why Shein products are so cheap.

To give you an idea, a country like Canada would need a 200% to 400% increase to close the gap between domestic and international rates!

FAQs about Shein

The ten reasons above may have given you even more questions about Shein, so here are some frequently asked questions answered!

Summary

Before we go, we've created a quick summary of this article for you, so you can easily remember it:

• Shein keeps prices low by cutting out middlemen and selling directly to customers through its website and app.
• Operating exclusively online removes the costs of running physical stores, such as rent, staff salaries, and utilities.
• Instead of mass-producing clothes months in advance, Shein manufactures in small batches based on real-time demand.
• Most of Shein’s clothing is made in China and other low-wage regions, where labor costs are significantly lower compared to Western countries.
• Shein buys materials in bulk, allowing them to secure huge discounts on fabric, zippers, and other production materials.
• Reports suggest that Shein's factory workers often work long hours for low wages, and some factories have poor working conditions.
• Shein primarily uses synthetic fabrics like polyester, nylon, and spandex, which are cheaper to produce than natural materials like cotton or wool.
• Shein relies on social media influencers and user-generated content instead of expensive traditional advertising, keeping marketing costs low.
• A global postal loophole allows packages from China to ship at extremely low rates, keeping international shipping surprisingly affordable.

Conclusion

Now that we’ve broken down the real reasons why Shein is so cheap, it’s clear that the brand’s low prices are the result of a highly efficient, cost-cutting business model.

Every part of Shein’s strategy is designed to maximize affordability.

But of course, these low prices come with trade-offs:

• Shein's product quality can be inconsistent.
• There are ethical concerns about labor conditions and the environmental impact.
• Shipping can take longer than expected.

At the end of the day, it all depends on your shopping priorities.

Shein delivers cheap, fast fashion at unbeatable prices, but whether that’s worth it is up to you!

Want to learn more about online shopping?

Ready to move your ecommerce knowledge to the next level? Check out the articles below:

• Shein Dropshipping: A Complete Guide (& Is It Allowed?)
• 13 Real Reasons Why Everything on AliExpress Is So Cheap
• 11 Real Reasons Why Everything on Temu Is So Cheap (2025)

Plus, don't forget to check out our in-depth how to start an online store guide here.