Whether you want to expand your existing ecommerce business without ramping up your inventory management costs, or launch a brand new ecommerce shop as a side-hassle, dropshipping is the way to go.
One of the biggest benefits of dropshipping is that you can start your business with little-to-no capital. And then grow it into a huge e-commerce empire without doing all the “boring” back-office things aka warehousing, packaging and shipping a multitude of products every single day. The other major benefits include lower-overheads, flexible location and easy scaling.
The best part? All you have to do to get started with dropshippping is sign on with some reliable suppliers who will fulfil your orders. AliExpress is a prime place to find find great inventory at an affordable price.
How Does AliExpress Work
AliExpress is an e-commerce platform, operating just like Amazon does. You can browse among thousands of listed goods originating from China, stash them in your cart and have them delivered to your doorstep in 2-3 weeks time.
The only major difference is that it sells goods from individual sellers, and does not carry any on-brand merchandise like Amazon does. Is Aliexpress legit? Yes, it’s part of China’s massively successful Alibaba Group – a direct competitor of Amazon in the region – that operates several other popular companies:
- TaoBao: the second most popular website in China. Huge C2C and B2C marketplace
- TaoBao Mall: Chinese portal for international brands
- AliExpress: for the international crowd
- Alibaba: another international B2B/B2C e-commerce marketplace
- Alibaba Cloud: cloud computing service
- Alipay: payment service similar to PayPal
Alibaba marketplace alone has made over $17.7 billion in sales in a single day. So yes, it’s safe to say that this e-commerce platform is popular with consumers in Asia and Europe to some extent. But not so well-known in the US. And that’s exactly why you should consider dropshipping with AliExpress – you can get competitive products from brands (or no-brands) no one knows about yet.
The Advantages of AliExpress Dropshipping
Prices. You will be surprised by how ridiculously cheap some of the AliExpress products are! You can buy perfectly great clothes, electronics, home utensils and other products for a fraction of what they are sold elsewhere. This, in turn, allows you to propose competitive pricing as well as a business owner. Though if you want to maintain a healthy cash flow and net some good profits, add at least a 50% brand markup.
Wondering whether you can ever succeed pretending your $15 product is actually worth $150 or more? Yes, if you play your cards right. Daniel Wellington – an “Instagram watch brand” – did just that. The company is now making over $230,000 million annually, selling cheap, but trendy, watches for 10-15X times of what they are actually worth.
Product range. Over 100 million of products are listed on AliExpress. That’s way more than you can find in any supplier directory (free or paid one). If you want to start a niche dropshipping business to avoid massive competition, you will sure find some rare and unique goods on AliExpress.
Dropship-friendly sellers. Most of the suppliers operating on the platform are very familiar with the concept of dropshipping. They are easy to negotiate with in terms of wholesale pricing for bulk orders. As long as you sign up with a good supplier (look for tips in the next section!), you won’t have to “put down any fires” on a weekly basis.
No limits on sales volumes. If you have ever tried dropshipping before, you may know that some suppliers impose minimum order restrictions aka you need to order at least 100 items to qualify for partnering with them. That’s not the case with AliExpress sellers. You can order just one product at a time without a hinch.
But let’s keep things real. There are a few cons you should know about too.
AliExpress Dropshipping Cons
Slow shipping. There’s no way you can guarantee same-day or even same week delivery for your store. Shipping goods from the other end of the world takes time. But fret not, most customers will gladly wait for their parcel as long as it takes. AliExpress also has a premium shipping option (ePacket delivery) you can consider. If you choose to use it, the goods will reach the customers’ doorsteps in the US, Canada, the UK and Australia in just 7-14 days. Additionally, to compensate for somewhat slower delivery times, you can offer “free shipping” – a number 1 insensitive to buy for 9 out of 10 customers.
Low-quality/counterfeit branded goods. While TaoBao is the real “goldmine” of all things “rep”, AliExpress sellers sometimes list counterfeit items as well. The platform strives to capture and delete such product listings fast though. So there’s a low chance of running into some questionable products. But stay vigilant anyways and don’t fall for “too-good-to-be-true offers for branded products”. On the other hand, AliExpress also runs genuine promotion campaigns with well-known tech brands (e.g. Lenovo), so that you can score authentic gadgets for less.
No returns & exchanges for your customers. Orchestrating the return process can be a massive hassle. Most AliExpress sellers do accept product returns and issue refunds for damaged goods, but you can imagine that the timeframe for this is rather long. Returning your customer’s order to the original seller will become your responsibility – and that includes shipping costs back to China. So think in advance what provisions you will add to your return and exchange policy.
How to Dropship From AliExpress in 3 Quick Steps
As mentioned already, you can often find amazing goods for incredibly low prices. And you have a nearly equal chance of ordering some obvious crap for pennies. Clearly, you don’t want to deliver lousy stuff to your customers or your dropshipping business will go belly up just too soon.
So here’s how to find dropshippers on AliExpress.
1. Browse Best Selling Products First
The platform regularly runs list of the “best selling products” and top items on sales. Start with those sections to determine:
- What’s in demand among the customers;
- Who are the popular supplier’s/brands on the platform.
Then refine your list of prospects using the breadcrumbs technique. Choose some popular item on display:
Look at the upper right corner to see who’s selling it. If the seller has positive reviews (96.8% in this case), go on and check what else do they offer. If you see a bunch of good reviews, get in touch with them to ask about wholesale prices and negotiate a dropshipping arrangement.
In general, pay attention to the following metrics when considering a product for dropshipping:
- Individual product reviews (4 stars or higher).
- Store rating (90% or higher)
- Years in business (try to avoid partnering with brand new stores)
In particular, you should specifically ask if the items they sell are branded in any way including packaging. You should also ask them to either:
- Avoid adding their invoice to the package as well as any other marketing materials.
- Ask if they could use your invoice instead. You can create an on-brand one using one of our free templates and email a copy to the seller.
Next, pay attention to individual product reviews left from other customers. Some AliExpress shops list goods of varying quality as they are being sourced from different manufacturers. So it’s always better to re-check whether all products are of the same quality.
2. Order Some Samples
If you plan to sell some 50+ products, you don’t need to order every model, in every size and color/configuration. To save yourself some startup costs, order just a few (up to 5) product samples that you will then position as your “flagship” products. Clearly, you will want those “best deals” to be of excellent quality.
Also, use those samples to create custom content for your social media and advertising campaigns. If you will then need additional product images, ask the seller if they can provide you with some. Though most dropshippers usually choose to just import product images from AliExpress directly – as long as those images are unbranded.
3. Avoid the Lowest/Highest Prices
Let’s get back to that jewelry store example. As you can see the seller markdown their product by whooping 95%. It’s logical to assume that they have added a hefty brand markup themselves (because they are already popular on the marketplace and getting plenty of business). In this case, a higher price may not be equal to better quality.
To test your assumption, copy the product image/title and paste it to AliExpress search bar. You can run image searches in the mobile app only. You will likely get similar listings from other sellers with varying prices. Get in touch with them to see whether they are sourcing the product from the same place and negotiate a better price with them.
On the other hand, price wars are notorious on AliExpress. So to remain competitive, individual sellers often deploy various tricks for reducing the price. And those include compromising the product quality.
For instance, some “cool sweater shop” sells 100% cashmere sellers for $50. They ship a great product and have plenty of business, uptil the day when a “rival sweater shop” starts selling a cashmere/polyester sweater for $25 (still branded as “cashmere sweater). So company A loses some of its customers and decides to drop the price too, and sell cashmere/polyester combo instead of 100% cashmere.
The lesson here? A cheaper version of the same-looking product can be of lower quality. As an ecommerce business order, you’d want to avoid selling that fluff to avoid compromising your shop’s reputation. That’s why building great relationships with the sellers is key. Don’t reach out immediately saying something like “Hey, I like your product. But shop B sells the same stuff for less, so I want a discount!” Instead, ask the seller about the product specs: materials, manufacturing facility, guarantees on quality etc.
Once you have secured some arrangements, received and reviewed some product samples, list AliExpress products on your e-commerce platform and start marketing the heck out of those! Once the order arrives, you order the same product from your supplier and have them ship it to your customer. The fulfilment process can be automated with different dropshipping software tools and Shopify extensions. In a nutshell, that’s how to start a dropshipping business using AliExpress.
Photo by Tevarak.