by Shopify Writer: Corey Ferreira > Dropshipping
9 minute read
Dropshipping is an excellent way to start an ecommerce business without needing to worry about inventory or shipping. It’s as simple as listing a product for sale on your website, and sending an email to your supplier to ship the item on your behalf whenever you get an order.
While starting a dropshipping business is a great way to start an ecommerce business, digging deep through the internet to find a reliable supplier can be tough. However, with Oberlo and Aliexpress, there is a convenient marketplace you can use to dropship.
AliExpress makes it easy to find products to sell on your store, without having to worry about inventory or shipping. You can pay for products at wholesale prices and have them dropshipped directly to your customers.
Why AliExpress for Dropshipping
AliExpress is a gigantic marketplace with a wide selection of products you can sell in your store. Because most of the AliExpress sellers are overseas manufacturers, their prices are very competitive.While AliExpress may position itself as an online retailer, most sellers on AliExpress understand that a large number of their customers are resellers and are much more interested in dropshipping.
Dropshipping with AliExpress is also very easy.
There’s no upfront cost or fee, so you can test out products without any financial commitment. You can start dropshipping today, for free, by using AliExpress or Oberlo.
Many sellers on AliExpress have great product photos that you can use on your website, as well as detailed product descriptions to help you describe the product in your store.
Lastly, dropshipping using AliExpress is as simple as ordering the product on AliExpress after getting an order, and inputting the customer’s address.
I’m going to go over in more detail how this all comes together, what to look for in a product and seller, and how to position yourself for success, but it’s really not any more complicated than what I described above. Dropshipping using AliExpress is a great way to get started selling online once you have everything setup.
Why Would Someone Buy from Your Store If They Can Buy the Same Products on AliExpress?
With an AliExpress dropshipping business, your competitive advantage won’t be your price or unique proprietary products. Your competitive advantage will be reaching your customers before competitors do.It’s retail arbitrage.
Good marketing and reaching customers first can be a competitive advantage. You can also add more value to your customers by building a brand, creating content and providing awesome customer service.
Setting Up Your Store
Now that we understand how AliExpress can work as a dropshipper, and how you will position your store, let’s first get your store set up before placing your first order.Selecting Your Niche and Products
The first part of setting up your store is deciding on your niche. If you don’t know where to start, start with the product categories AliExpress has and begin deciding what interests you the most or what you’d feel the most comfortable selling.
Once you have a niche in mind, it’s time to start choosing a few products you want to resell on your store. In this example, I chose running shoes as my store niche.
As you’ll find with AliExpress, there’s a huge selection of products to choose from. It can be overwhelming. It can also be lead to headaches if you don’t select a quality product from a reliable supplier.
While it isn’t perfect, I’ve developed a list of criteria for choosing a product. There’s no science to it, but so far it’s helped me select reliable sellers. Here are a few things I look for when selecting a product on AliExpress to dropship:
No brands, fakes, knockoffs: I avoid any brands to avoid reselling fakes and knockoffs. Look for unbranded products. If there’s a logo on the product, I avoid it, even if it may be legitimate. I don’t want to take the risk since I’m not a licensed reseller and also because I don’t actually know if the product is real. This might significantly limit your choices, so choose a niche where brand doesn’t matter, such as with electronic accessories or clothing.
ePacket delivery with free shipping: When possible, I try to only resell products that offer ePacket shipping that’s free. Because a majority of products on AliExpress come from China or Hong Kong, ePacket delivery is not only the most economical, but one of the quickest for small goods to get to the United States.
Over 300 orders: A product with a lot of orders tells me a few things. First, it tells me there’s demand for the product. Second, it tells me the supplier must be reliable as my guess is that a few of those orders are repeats. Sometimes when looking for a new product, I’ll sort products by the most orders.
Over 4.5 stars rating: I also like to ensure the products I plan to resell have a high product rating (over 4.5 stars) and the seller has high positive feedback as well. Just to get a second opinion on sellers on products, I use a Chrome extension called AliExpress Seller Check.
This provides me with a detailed overview rating left with a third-party app. I’ve found this to be much more reliable than simply using AliExpress’ rating system.
Low price with a high margin potential: Depending on the product I want to resell, I like to stick with purchasing products within a $1-$20 price range. This makes it less risky when I lose money on a sale, and these products generally can be priced at $20-$50 or more. For example, I can find running shoes on AliExpress for around $20 and sell them for $50. This provides me with a 60% profit margin.
Lots of great, unbranded, product photos: Do your due diligence to ensure the photos are actually from your manufacturer and not stolen from another retailer online. Doing a quick Google image search will help you see if the product photos are of a real brand and retailer or from the manufacturer themselves.
Communicative, helpful seller: Don’t be afraid to ask a seller questions before placing an order with them. A good reliable seller will answer all of your questions quickly. If a seller doesn’t respond to messages, that’s a big red flag.
Adding Products to Your Store
Once you setup your Shopify store, it’s time to add a product. This step is important to cover in detail because it’s not as simple as copying the images and description of the AliExpress listing and placing that on your website.Instead, if you want to position your store for success, there are a few things you should consider.
Write your own product descriptions. The product descriptions for many of the products on AliExpress were not written by copywriters or with the intention of fully explaining the benefits of the products. Having your own unique content will serve your business better in the long run (Google ignores duplicate content) and will help you convert better on product pages.
Let customers know about delivery times. It’s a good idea to include on the product page (or elsewhere on your store) that your customers may need to wait at least 20 days (depending on the supplier) for their order to arrive. Since most suppliers on AliExpress are located in China, shipping times can be longer than average.
Use an order tracking app. With longer shipping times than most people are used to, you’ll often receive emails from customers asking where their purchase is. Use an order tracking app from the Shopify App store to keep your customers up-to-date with the status of their purchase.
Image: Tracktor
Offer free shipping. This can become one of your competitive advantages so I highly recommend offering free shipping to your customers by taking advantage of the free/low cost shipping offered by many AliExpress sellers.
Price products appropriately. Consider pricing your products at about twice the cost. Shooting for a 50% margin will make running the business worthwhile, as well as cover for marketing expenses.
Add products to your store with Oberlo. Instead of manually adding products from AliExpress to your website, you can use Oberlo to quickly add products to your store.
How to Use AliExpress to Dropship
Now that you have your store filled with products ready to sell and dropship, what do you do once you get your first order?Dropshipping with AliExpress works similarly to any regular dropshipper. When you receive an order, purchase the item on AliExpress and enter your customer’s name and shipping address. The AliExpress seller handles the rest.
It might be a good idea to have a spreadsheet handy with a list of all the products on your site, the amount you’re selling them for, the amount they cost on AliExpress and a link to the AliExpress listing. This way, whenever you get an order, it will be easier for you to find the supplier on AliExpress as well as keep track of price changes.
Alternatively, you can use Oberlo which can handle all this for you, including making it easier for you to purchase orders on AliExpress and watch for price changes.
When ordering on AliExpress, it’s a good idea to let the seller know you’re dropshipping. This way, the supplier won’t include any invoices or promotions in the package being sent to your customer.
On checkout, you can leave a message for the seller. I recommend leaving a message such as: “We’re dropshipping. No promotions & invoices, please!”
As I mentioned earlier, try and select ePacket shipping if the supplier is in China and if it’s available as a shipping option. Many suppliers will offer this shipping option for free.
Depending on your seller’s processing time, you’ll receive an email shortly letting you know that your order has been shipped.
Click the link in the email to view the order, which will allow you to see the tracking number for the order.
Head over to your Shopify admin and fulfill that order. Be sure to enter the tracking number, too.
That’s it! Now it’s just a matter of waiting for your customers to receive their order. When the order arrives, AliExpress will send you an email asking for confirmation that the order was received. Give some time for the customer to get back to you in case there are any problems with their order. This way, you can bring up the issue with the supplier through AliExpress for them to correct it.
What About Refunds and Returns?
Many AliExpress suppliers don’t offer returns. This means you’ll have to handle returns and refunds in one of a few ways. When there’s an issue with an order a customer placed on your store, it’s usually because the order never arrives or your customer is not happy with their purchase.For the first case, an order never arriving should be brought up with the AliExpress supplier. In this situation, contact the supplier to resolve the issue or use AliExpress’ Buyer Protection.
If your customer is simply not happy with the product, I suggest providing a refund. If the product is damaged, ask your customer to take photos and send those photos to the AliExpress seller and go from there.
Growing Your Dropshipping Business
Once you’ve made your first few sales, it’s time to start looking at how you can grow your dropshipping business and make more money.Eventually you’ll begin to figure out who the reliable and quality suppliers are, and who are not. You should consider building relationships with the reliable ones. This will allow you to get better prices and priority order processing.
I’ve found most of the suppliers on AliExpress use Skype. If you see yourself frequently ordering from the same seller, it’s a good idea to ask them for their Skype username to develop a business relationship. Once you’ve demonstrated you can bring in recurring sales, some sellers will allow you to place your logo on products, include custom invoices or branded inserts into shipping packages.
Start Dropshipping
The best part about AliExpress dropshipping is that it allows you to quickly test and validate store ideas and products. Unsure if you’re capable of selling a certain product? Add it to your store and test it! Doesn’t work out? It’s as simple as removing the item from your store and testing something else.Start for free with Oberlo.
Because you’re not carrying or managing any inventory, and there’s no upfront cost, there’s little risk to setting this all up.
Try it out and report back. Have any questions? Leave your question and comment below. I engage with and respond to everyone.
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Featured Comment
Hey
everyone, there's a lot of misinformation and advice coming from people
who don't seem to have any actual experience doing this. I think it's
important I try to clear up some of the common questions/concerns with
this kind of business model:
Q. How do I process hundreds of orders with several different suppliers??? This seems impossible!
A. As mentioned in the article, this is where Oberlo comes in. It helps you process orders with many different AliExpress suppliers very quickly.
Q. Will the customers see the package is from AliExpress/China?
A. Packages from AliExpress suppliers will usually have the supplier's address. However, I've never had a customer mention this or really care. As long as you deliver what you promise, people shouldn't care. Also, if you tell suppliers you're dropshipping, they likely won't include any promotions/flyers in the packaging.
Q. Do you have repeat customers?
A. Yes, of course.
Q. AliExpress suppliers don't offer refunds!!
A. Of course they do. If your customer never receives the item, or it's damaged, and the AliExpress seller refuses to refund, you simply open a dispute with AliExpress. AliExpress will almost always side with you if there's a real issue. Remember to always purchase Epacket shipping so that you have a tracking number for proof.
Q. Do I need to register a business?
A. You should always register a business that's making money. When would there ever be a situation otherwise? It's the same here. I highly recommend first trying to start a store and getting a sale before committing to any kind of business or looking into setting up your business legally.
Q. What about taxes?
A. This all depends on your local laws. Do a Google search for your country's business tax laws or talk to an accountant/lawyer. Shopify allows you to charge taxes in your store, if this is something you think is necessary.
Q. So a customer buys something in my store and I use that money to buy the product on AliExpress?
A. No. A customer places an order on your store using credit card or PayPal. That money takes a few days to process into your account. Also, AliExpress only accepts credit card as payment.
Q. Why would customers wait months for their order to arrive??
A. They won't. Again, ensure you're using ePacket shipping. It's a quick, affordable and trackable shipping option from China to countries such as US, Canada, Australia, U.K, and more.
Q. If a customer places an order for different products, won't they receive separate packages from different suppliers?
A. Yes, but again, as long as you communicate this in a shipping confirmation email, customers likely won't care. I personally have never had a customer complain about this and I have purchased things online only to receive it in separate packages.
Q. Won't the value of the item show up on the package as it passes customs to the customer?
A. It might, but again, I've never had a customer mention it. Also, ensure you ask suppliers not to include an invoice in the package.
Remember: EVERY kind of business has its challenges, weaknesses, faults, and problems. If you're willing to take on the challenges for this particular kind of business, there's a lot of upside. In particular, the low barrier of entry and little money needed to start something like this. To be honest, this has been one of the best business models for myself. I would say customer service is the most challenging part of my store. If you can handle that, or even out-source it, everything else will be pretty straight-forward.
Best of luck!
Q. How do I process hundreds of orders with several different suppliers??? This seems impossible!
A. As mentioned in the article, this is where Oberlo comes in. It helps you process orders with many different AliExpress suppliers very quickly.
Q. Will the customers see the package is from AliExpress/China?
A. Packages from AliExpress suppliers will usually have the supplier's address. However, I've never had a customer mention this or really care. As long as you deliver what you promise, people shouldn't care. Also, if you tell suppliers you're dropshipping, they likely won't include any promotions/flyers in the packaging.
Q. Do you have repeat customers?
A. Yes, of course.
Q. AliExpress suppliers don't offer refunds!!
A. Of course they do. If your customer never receives the item, or it's damaged, and the AliExpress seller refuses to refund, you simply open a dispute with AliExpress. AliExpress will almost always side with you if there's a real issue. Remember to always purchase Epacket shipping so that you have a tracking number for proof.
Q. Do I need to register a business?
A. You should always register a business that's making money. When would there ever be a situation otherwise? It's the same here. I highly recommend first trying to start a store and getting a sale before committing to any kind of business or looking into setting up your business legally.
Q. What about taxes?
A. This all depends on your local laws. Do a Google search for your country's business tax laws or talk to an accountant/lawyer. Shopify allows you to charge taxes in your store, if this is something you think is necessary.
Q. So a customer buys something in my store and I use that money to buy the product on AliExpress?
A. No. A customer places an order on your store using credit card or PayPal. That money takes a few days to process into your account. Also, AliExpress only accepts credit card as payment.
Q. Why would customers wait months for their order to arrive??
A. They won't. Again, ensure you're using ePacket shipping. It's a quick, affordable and trackable shipping option from China to countries such as US, Canada, Australia, U.K, and more.
Q. If a customer places an order for different products, won't they receive separate packages from different suppliers?
A. Yes, but again, as long as you communicate this in a shipping confirmation email, customers likely won't care. I personally have never had a customer complain about this and I have purchased things online only to receive it in separate packages.
Q. Won't the value of the item show up on the package as it passes customs to the customer?
A. It might, but again, I've never had a customer mention it. Also, ensure you ask suppliers not to include an invoice in the package.
Remember: EVERY kind of business has its challenges, weaknesses, faults, and problems. If you're willing to take on the challenges for this particular kind of business, there's a lot of upside. In particular, the low barrier of entry and little money needed to start something like this. To be honest, this has been one of the best business models for myself. I would say customer service is the most challenging part of my store. If you can handle that, or even out-source it, everything else will be pretty straight-forward.
Best of luck!
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