Re: Oh my!
What actually made it successful is that it doesn't transfer the money to the trader until you, the buyer, confirm receiving the item. If the item is substandard, you can "open a dispute", and usually get a partial refund without having to return the item (returning it results in a full refund as in all other shops, but with most items sold being dirt-cheap, is often not worth it).
And no, they don't rip you off on shipping, in fact quite the opposite - their strategy is to flood the world with Chinese products at implausibly low shipping costs (my gf has had items delivered to her from China for less than it would cost to send them in-country). This seems to me to be somehow subsidized by the Chinese state to strenghten their exports, otherwise I don't see how it could be so cheap.