Business owners do not have to see their good physically before they sell it to customers if they use dropshipping. The goods listed are sold and then bought from a merchant before they are shipped to the customer. The goal of this article is to teach you all you need to know about dropshipping and why it is important to you.The operation is quite ideal for startup owners since they do not have to keep inventories and it requires very minimal capital to execute it; permitting them to focus on developing their client base.
This concept is not novel. In 1999, Zappo launched dropshipping store. Dropshipping is also utilized by Amazon and Sears. A recent 2017 study on e-commerce shows of about thirty-three percent of the e-Commerce industry employs dropshipping extensively as the basic model for inventory management. Dropshipping is not just employed by the biggest companies; smaller businesses regularly share reviews on platforms like Reddit on how their use of dropshipping has greatly increased their income.
How is dropshipping related to AliExpress?
Chinese businessmen are major users of dropshipping and the dropshipping industry in China the business model is growing at an increasing rate. The growth can be traced to the Chinese manufacturing industry’s need of merging with businesses abroad. Lately, a large number of Chinese businessmen have been exposed to dropshipping. Those businessmen now understand the unlimited potentials, dropshipping makes available to them. This also explains why a lot of people subconsciously think dropshipping when they see Chinese products.
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Thanks for reading that small intro, if you’re interested in dropshipping the blow list will detail exactly what the rest of this article is about.
TABLE OF CONTENTS
- What is AliExpress?
- How does dropshipping work on AliExpress?
- What is the distinction between standard dropshipping and dropshipping on AliExpress?
- How easy is it to dropship products on AliExpress?
- Can customers identify goods that have been dropshipped on AliExpress?
- If AliExpress has a product for a lower price, why would a customer buy it from me?
- Shipping takes a long time on AliExpress; my customers are not willing to wait
- How do you handle quality control and copyright infringements?
- Can AliExpress merchants communicate in English?
- What are the policies guiding AliExpress dropshipping returns and refunds?
- Is PayPal in support of AliExpress dropshipping?
- What advantages will AliExpress dropshipping offer to established businesses?
DEFINE DROPSHIPPING AND ALIEXPRESS
Jack Ma is a popular figure. The Chinese owner of the $17billion AliBaba Empire is literally a celebrity. In an approach similar to Amazon’s founder Jeff Bezo, Jack launched AliBaba in 1999. His inspiration was founded on the difficulty he experienced in getting Chinese products online. He created the interface, specifically to open up the Chinese manufacturing industry to the rest of the world.
Alibaba the parent company allows you to purchase goods for your shop and stores. Your able to buy products mostly in bulk and many businesses are profitable with this buy low now and sell high later classic business model. But on AliExpress, you are allowed to purchase goods in from merchants, for personal use or dropshipping. Which means you can purchase items one at a time. Which is ideal for newcomers to dropshipping. Most Chines suppliers use both platforms to sell their products. The two platforms, do not hold any inventory. They are virtual markets that offer a standard similar to eBay or Amazon merchant fulfilled.
HOW DOES DROPSHIPPING WORK ON ALIEXPRESS?
AliExpress’s approach to dropshipping is comparable with the normal approach of traditional dropshipping. To add products to your Shopify store, you simply takes the details of a product from AliExpress and puts it your store; you then attach the prices and information. When a customer buys the product from your Shopify store, you then purchase the product from the original merchant on AliExpress, and that Aliexpress merchant ships it to the customer.
One of the numerous advantages AliExpress dropshipping offers is the space and time to concentrate on marketing the products and expanding the customer base. There is a whole lot to dropshipping than just uplaoding products to your store.
WHAT IS THE DISTINCTION BETWEEN STANDARD DROPSHIPPING AND DROPSHIPPING ON ALIEXPRESS?
Wholesale2b is one of the biggest American wholesale directories with an offering of over 1,500,000 items drop shipped from Americans to Americans and aboard. AliExpress offers a lot more. For example, Aliexpress offers more than 1,500,000 tee shirts alone, and as a user, you can select any one of these items to be dropshipped. There is a wide variety available including jewelry, electronics and so on. Also dropshipping on AliExpress can be adaptable; you can determine your profit ratio. There is no compulsory sales price (MSRP), and you are allowed to fix your prices.
The service is also available at no cost at all. You do not even need to have a direct relationship with the supplying merchant. Anyone can start off without having a registered platform; you will need to do this when you start expanding your operations. This concept gives you instant access to millions of goods without stress. The goods are modern and are the products of a lot of research on trends.
The whole dropshipping process looks quite easy. However, there are some issues to keep an eye on related to dropshipping many of you reading this may have question and I will answer most of the common ones related to Aliexpress dropshipping below.
FREQUENTLY ASKED QUESTIONS ON DROPSHIPPING
How easy is it to dropship products on AliExpress?
Dropshipping products is quite easy on AliExpress, with applications like Oberlo, the whole process is significantly simplified. With dropshipping, it is a win-win situation for everybody. AliExpress takes a percentage of the income, the merchant also sells their goods, and you make income too. The dropshipping method is quite productive.
Can customers identify goods that have been dropshipped on AliExpress?
They will only identify the products if they discover the same goods on the AliExpress website. The packages shipped to customers don’t contain any promotional materials from the merchants. However, for added protection, you can ask the merchants not to add any invoice or advertising in boxes to your customers. When your growth is significant, you may consider having customized promotional materials for your store included.
If AliExpress has a product for a lower price, why would a customer buy it from me?
They will buy it because you offer better services. Knowing that you reached a potential customer and offered satisfying services before the supplying merchant is what gives you an advantage. Your brand is preferable because they trust you and some might even be aware of where your store is situated. The additional services or the ease of shopping from you are the value added services your customers enjoy which makes you preferable. Don’t concentrate on matching prices with your competition or creating a unique brand. You should remind yourself that other people will eventually offer lower prices.
Don’t concentrate on matching prices with your competition or creating a unique brand. You should remind yourself that other people will eventually offer lower prices and being unique might be a farfetched dream. When a product retails for less than $100, customers often don’t make price their determining factor.
Don’t concentrate on matching prices with your competition or creating a unique brand. You should remind yourself that other people will eventually offer lower prices and being unique might be a farfetched dream. When a product retails for less than $100, customers often don’t make price their determining factor.
Look at the price difference between the same shirts listed different sites.
If you study a particular product offered by different e-Commerce platforms, you will notice that these are thriving multimillion dollar businesses and yet they do not have competitive prices. This is simply because they offer better services. However, make sure that you fix your prices without worrying about competing with the prices fixed by other sellers. If for instance, you estimate that the cost of getting one customer with Facebook Ads is $15, increase the price offered by the merchant on AliExpress by $22 and focus on selling the product. Increase your prices with a lot of rational considerations. You can implement a different pricing strategy subsequently, but this is ideal for a beginner in e-Commerce.
Shipping takes a long time on AliExpress; are customers willing to wait?
Once, the AliExpress platform made daily sales worth about $14 billion. Slow deliveries is a not a problem for these shoppers. It is your duty to set fixed targets, explain your policy for shopping and highlight it in strategic spots around your store. With the cancellation of sea shipping, deliveries are much faster and they take less than the former sixty days.
The trending ePacket Delivery delivers packages to customers in the United States in about seven to fourteen days. Also, the ePacket option has been extended to 29 countries across the globe. You would also find that some merchants keep their bestselling products in warehouses located in the US which will make delivery very fast. Select the best merchants based on the results of your in-depth research. With random merchants, there is a high probability that they will offer the regular two months delivery option.
The trending Aliexpress ePacket Delivery, delivers packages to customers in the United States in about seven to fourteen days. Also, the ePacket option has been extended to 29 countries across the globe. You would also find that some merchants keep their bestselling products in warehouses located in the US which will make delivery very fast. Select the best merchants based on the results of your in-depth research. With random merchants, there is a high probability that they will offer the regular two months delivery option.
Note: there is a vast distinction between these two delivery options. Although some merchants offer same day shipping with an estimated delivery time of two weeks via the ePacket delivery while others ship within a ten day period and provide the standard China Post which is an estimated forty-five days before delivery.
How do you handle quality control and copyright infringements?
There are a lot of stores offering made in China goods with low quality. Unfortunately, this is the reality. This is however not the case for every product made in China. Bad products are available in every part of the world including the United States and Europe. Select your supplies diligently and blow the whistle on merchants who sell low-quality goods. The responsibility of finding high-quality supplies rests on you. The AliExpress platform is an open market and there is no restriction on gaining entry into the marketplace, it operates a model similar to the eBay model, it also faces similar challenges of scammers and quality control.
The platform is doing some innovative work to curb these low quality occurrences. Currently, accounts for suppliers are no longer free. There is a registration fee of $1500 before a store can be launched, making it quite a hurdle for scammers. Also, the platform provides an extensive safety program for buyers. It has employed over two thousand employees who are devoted to checking sale listings for copyright infringement. Due to these new developments, Chinese suppliers are hard pressed to sell low-quality products.
Can AliExpress merchants communicate in English?
They do not have a high level of fluency, but you can always reach out to them before transacting business so you can have an idea of their fluency. With the bigger companies, you probably won’t experience this. They have sales teams who manage the customers’ requests and answer inquiries either through emails or live chat.
What are the policies guiding AliExpress dropshipping returns and refunds?
You can offer more values to your customers and gain extra advantage by creating a hassle free returns and refunds policy. Lets keep it real returning a item to Aliexpress can be a very complicated process. So I suggest to just chop it up as the price of doing business and resell the item on eBay or Amazon.
- RETURNSIt is very rare to get an AliExpress merchant to agree to collect returns. And even when this is the case, you will not be notified that the merchant has taken delivery of the returned goods and you will have to pay the refund. I will advise that you ship the item to your location and sell it to a different customer if the item has not be used. Customers will find this easier and your services will be more beneficial to them. The instances of returns you will record should not exceed six to eight percent of your total sales if your product description contains sufficient details and terms.
- REFUNDS
There are two common instances:
The product was not shipped or was shipped extremely late
The customer selected a wrong item and is not satisfied with the item chosen.
In the later case, you have the choice of using your returns policy. You can get the item reshipped to you and if it was rejected because of low quality, pay for the refund and shipping costs. However, if the fault lies entirely with the customer because of the wrong choice, you are not obliged to pay for shipping only for the refund.
With the first one, AliExpress merchants will most likely not offer you a refund. Unfortunately, you will then be forced to bear the cost of the refund. The merchants do not take kindly to refunds, and they will continue to tell you that the item was shipped or subsequently offer to reship it.
The more your business grows, the more you are likely to deal with these risks. It is best to have a refunds arrangement with your merchant and have set guidelines on how you will deal with returns and refunds in the future.
To avoid these challenges, be firm and insistent. If the merchant is still unwilling to refund, say for instance the package was not shipped or the tracking status for the order is still pending after thirty days, register for the AliExpress Buyer’s Safety Program. Communicate with the merchant daily and make countless bad reviews about his or her store. AliExpress merchants are very protective of their accounts because of the difficulty in getting a new one and the ripple effects of bad reviews has a direct effect on their income. Ensure that you do not allow things deteriorate to the extent that the order has not been delivered after fifty days, the tracking code is dormant, and the customer is extremely angry.
Is PayPal in support of AliExpress dropshipping?
A lot of people believe that dropshipping is an illegal operation, but this is, in fact, false. The majority of dropshippers use PayPal as their payment platform. The main challenge with PayPal is the restrictions they use, and there are many terrible stories detailing this. To use PayPal, you have to learn its operations because it is dedicated to protecting its users.
PayPal empowers its users to get a full refund of their funds if the product they get doesn’t match with the description given by the store owner, which is why customers prefer it. To avoid a situation where your account has been cashed out, and the customer is unable to get a full refund, PayPal places a hold on your income in advance. The period of restriction varies and is determined based on your history, reviews, tracking numbers showing the speed of your deliveries, the physical location of your store and so on.
Personally, I had a restriction for ninety days on my account once. I had to finance the costs of running the store. My second store, on the other hand, was given a thirty percent restriction on all the generated revenue for thirty days and a fixed deposit reserve. Dropshipping is not the cause for the restriction. The restrictions are a means of guaranteeing the safety of the customers. Even with other businesses, you may experience a restriction. PayPal is aware that you are not doing illegal transactions like money laundering via its platform.
What advantages will AliExpress dropshipping offer to established businesses?
While you do your research about dropshipping, it is advisable that you do a test run with yourself. Luckily the AliExpress platform provides an ideal model for beginner entrepreneurs. While an established business will not do an overhaul of its management model to install AliExpress dropshipping, it is still an opportunity that can be explored.
You can test run new product ideas with dropshipping and include new categories in quick time. If the test launch is successful, then you can stock up on the products in your physical warehouse. This method will significantly reduce the risk of purchasing new products without knowing how your customers will react to it.
CONCLUSION
Reading this article might have raised more queries in your mind about dropshipping rather than stimulating your excitement. And truthfully, the model is not without its flawless. It can be very tasking and complicated. It is also very time consuming and you have to focus intensely on researching and planning. However, its advantages make it the easiest method of kick-starting your e-commerce business and allow you to conduct market surveys on your new products.
If you have more questions, get in touch with me by leaving a comment below.
