Anyone who has ever looked into how ecommerce works has probably come across the term “dropshipping” at some point or the other. However, few people truly understand how it works.
To someone who is a complete beginner to the ecommerce world, dropshipping may seem intimidating. However, this dummy’s guide to AliExpress dropshipping will cover what it means, how it works, and even if this business model is right for you. So, let’s get started.
What is dropshipping?
Dropshipping is the process of shipping goods directly to your customer from a supplier, without the need of a dropshipper (you) storing and handling the goods at a physical warehouse.
A traditional business model without a dropshipper involves a business regularly orders products from a supplier to maintain sufficient inventory supply. The business stores the inventory at a physical place like a warehouse, until a customer order arrives. The business would then process each customer’s order, package the item, and ship to the customer.
How does the dropshipping business model work?
So, what exactly is the difference between dropshipping and traditional inventory model? There are three key players involved in the dropshipping business model: the supplier, the dropshipper, and the customer.
The role of the supplier in dropshipping includes creating products, holding inventory, and shipping products to customers on behalf of the dropshipper. They sell products to the dropshipper at wholesale prices.
The dropshipper, you, sell the supplier’s products on your website under your own brand name at a higher price. Your role is responsible for choosing and marketing the products.
Last but not least, the customer buys the product from your website in which the supplier would ship the item on your behalf upon providing shipping information. However, if the customer has any questions or complaints, they will be directed to you, the dropshipper, rather than the supplier.
Note: People often times get confused by manufacturers and suppliers. You may see these two terms used interchangeably in other places, but in fact, they are not the same. A manufacturer is someone who actually produces the products themselves. A supplier is someone who purchases the product from the manufacturer in bulk and selling the items to dropshippers. It is possible that sometimes, you can find a manufacturer that is also the supplier. In this case, it removes the inflated cost of the middle man, giving you the best possible wholesale price, which translates to larger profit margins.
Is dropshipping right for me?
After all these explanations of what dropshipping is, you might wonder now if dropshipping is right for you.
Dropshipping is a really great business model, especially for first timers who don’t know much about the online business world. It attracts a lot of beginners because this business model is low-risk and low-investment. It is low-risk because you don’t have to purchase inventory ahead of time and worry about not being able to sell them. It is also low-investment because, well, you don’t need to buy inventory!
There are essentially 3 types of entrepreneurs that dropshipping works well for:
- Validating entrepreneur – dropshipping is an easy way to test new products before heavily investing into inventory that may or may not sell.
- Budget entrepreneur – dropshipping is the least expensive method of selling online because you don’t have to purchase inventory upfront.
- First-time entrepreneur – the truth is, selling online isn’t always easy. But dropshipping allows new entrepreneurs to learn the basics of ecommerce like driving traffic and conversion without investing thousands of dollars.
What is AliExpress?
If you want to dropship products, AliExpress is your go-to place to find millions of different products from China at low cost.
Before we move onto AliExpress, you might have also heard of Alibaba. Alibaba is the original site built for wholesale purchases. Sellers on this site usually have a minimum bulk order requirement, and they do not do direct shipping to your customer on your behalf. On the other hand, AliExpress is the sister site of Alibaba, specifically catered to dropshippers who don’t stock the products. You can buy one quantity of a product at a time for cheap.
Why AliExpress for dropshipping?
AliExpress is a huge online marketplace with a wide selection of products to choose from. There are many benefits to it:
- AliExpress is basically like Amazon, but for dropshippers. You can literally sell anything you can think of, from furniture pieces to jewelry, from pet supplies to gardening tools.
- Because most suppliers on AliExpress are from overseas, usually from China, their prices are competitive and cheap.
- Suppliers on AliExpress have great product photos that you can use for your website, so you don’t have to worry even if you don’t know how to take and edit professional product images.
- The process of dropshipping on AliExpress has been simplified, especially with the help of automation tools like Shopzie that can fulfill your orders with just a few clicks.
Is AliExpress safe and reliable?
Yes! AliExpress actually offers a lot of protection for buyers to keep them protected throughout every step of the sale. On their website, it provides a lot of useful information about the suppliers that keep them accountable. To name a few:
- Seller’s positive feedback in %
- Seller’s ratings out of 5: Items As Described, Communication, and Shipping Speed
- Product ratings out of 5
- Number of orders received from that product
- Written feedback and comments from buyers about the seller, their products, and services
Why would someone buy from you when they can buy on AliExpress?
This is probably the number one question that many people ask before they dive into the dropshipping business. But if this is the question that is ultimately stopping you from becoming an entrepreneur, then you have to think again.
So, why would someone buy from you when they can get the same product at a much cheaper price on AliExpress?
The answer to this is actually quite straightforward. Those who already know about AliExpress simply means they are not your target audience. Dropshipping is a term that is typically only understood by those who are in the ecommerce industry, and there’s still a large population of people in the world who know nothing about it. Besides, with good marketing, you can also add more value to your customers by building a brand, creating content, and providing excellent customer service, all of which suppliers on AliExpress typically don’t do.
3 tips from Shopzie to help you succeed in AliExpress Dropshipping
- Get a sample order before you decide to sell that product – this is to maintain quality assurance of all your products. Doing a quality check of the products before you actually start selling them prevents faulty products received by your customers and minimizes risks.
- Always read feedback and comments – if you don’t want to bother with quality check, at least make sure that you read through the comments from buyers on AliExpress to see if the products are as described. The feedback may also sometimes include information about the supplier’s communication, reliability, and shipping times.
- Use Shopzie’s cashback program – With Shopzie’s cashback program, you can earn up to 10% cashback for every order you purchase on AliExpress. This extra cash is very helpful in that you can use it to invest back into your business for buying ads, or simply pocket it yourself.
Like any other endeavors in life, dropshipping requires a certain degree of commitment and effort to make it work. However, the best part is, with no inventory needed and minimal capital, dropshipping really is the go-to business model for anyone that is a total newbie in the ecommerce world. We hope that this article helped you understand a little better of what dropshipping is and why you should give it a try!