They are produced in the same way as the mini motos and £299 trail bikes so beloved of kids. Sometimes basically sound designs, but often not, they are thrown together with minimal quality control, if it starts it passes.
Then they are marketed like baked beans, fast turnover, no support etc, often by firms that disappear quickly or change their trading names to avoid comebacks.
It's a gamble. You can be lucky and get a reasonable amount of use, but more commonly they don't last long. Parts are impossible usually. One local kid's one lasted 23 hours for example before a failure which was unrepairable. Since it's never been started again in at least a couple of months since, I guess they've had no satisfaction in getting it put right.
Certainly they reflect the fact that the mainstream companies have very substantial gross margins on the products they retail, but their more responsible operations bring large overheads and ongoing costs that reduce those substantially to moderate levels.
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