AliExpress Dropshipping Review: Pros and Cons & Guide for 2020
Dropshipping has been a popular business model in recent years. It has helped a countless number of entrepreneurs to become successful without a big initial investment.
The biggest advantage of AliExpress is that it enables anyone to dropship from China at no cost. While this is what has made AliExpress popular, it’s not all sunshine and rainbows when it comes to dropshipping with AliExpress. There are pros and cons.
In this article, I will walk you step-by-step through how you can dropship with AliExpress from scratch. If you have little initial investment, no worries because dropshipping and AliExpress are here to serve entrepreneurs with little money to invest upfront. I will walk you through both the good and the bad of AliExpress and the dropshipping model so that when you get started, there will be no surprise. Now, let’s get started!
Table of Content
- 1. What is dropshipping?
- 2. Why is dropshipping a perfect option for first-time entrepreneurs?
- 3. What is AliExpress?
- 4. Why should you dropship with AliExpress while there are many other dropshipping marketplaces?
- 5. Why should anyone buy from you when they can just buy the same product directly from AliExpress?
- 6. How does dropshipping with AliExpress work?
- 7. Pros and cons of dropshipping with AliExpress
- 8. How to dropship with AliExpress
- 9. What you should know about returns and refunds on AliExpress?
- 10. 3 tips for success in AliExpress Dropshipping
- Final words
1. What is dropshipping?
You get to learn sales and marketing first. Sales and marketing are the only part of the selling process that you need to handle; your supplier will handle the inventory management and order fulfillment for you. So, the dropshipping model gives you an opportunity to learn and improve your marketing skills first. If you want to be a successful entrepreneur, you need to know how to market and sell a product. Otherwise, no one will know about you, and no one will be convinced to purchase from you.
2. Why is dropshipping a perfect option for first-time entrepreneurs?
Little initial investment. As mentioned above, the dropshipping model usually requires little initial investment because you don’t have to invest in inventory.
Little risk. As you don’t have to keep inventory, you don’t have to withstand the risk of losing money when your products are not selling.
You get to learn sales and marketing first. Sales and marketing are the only part of selling products that you need to handle; your supplier will handle the inventory management and order fulfillment for you. So, the dropshipping model gives you an opportunity to learn and improve your marketing skills first. If you want to be a successful entrepreneur, you need to know how to market and sell a product; otherwise, no one will know about you, and no one will be convinced to purchase from you.
Related: Shopify Dropshipping Apps 2020
3. What is AliExpress?
AliExpress is a China-based eCommerce marketplace built and owned by the Alibaba Group. It was launched in 2010 and is the large house for mostly Chinese small businesses that offer products to international buyers.
With the advantage of low-cost labor in China, the prices of products on AliExpress are very competitive compared to other eCommerce platforms. This marketplace also offers millions of products in all sorts of industries, such as clothing, jewelry, and electronics.
AliExpress has done a fantastic job of connecting Chinese suppliers with overseas buyers by making it super easy for them to find products for selling online without having to worry about delivery or inventory.
To dropship with AliExpress, all you need to do is adding the products you want to sell from AliExpress on to your store, set up your price points with your desired markup. When you receive an order from your customer, you pay for the wholesale cost of that product, keep your margin, and the AliExpress supplier will deliver the order directly to your customers.
=» Read out guide: Alibaba Dropship vs Aliexpress Dropship
4. Why should you dropship with AliExpress while there are many other dropshipping marketplaces?
Even though AliExpress has been positioning itself as an online retailer, most sellers on the platform know that a vast number of their customers are resellers from foreign countries, so they are very welcoming towards dropshipping entrepreneurs.
It’s also relatively easy to dropship with AliExpress because you won’t have to pay upfront costs or fees to the suppliers to partner with them. This will enable you to test many different products without putting up financial commitment. You can start dropshipping right now using dropshipping apps such as Oberlo to find and add products from AliExpress to your online store with just a few clicks.
Another plus point for AliExpress is their sellers often have existing product images and descriptions ready for you to use in your store. You can make any changes to the product details where necessary so that you can position yourself on the market and sell better.
Finally, thanks to low-cost labor in China, you might now find any other marketplace that can offer lower base prices than AliExpress. This is important because your retail price will need to be competitive in your market, so the lower the base price you can get, the higher your profit margin can be.
5. Why should anyone buy from you when they can just buy the same product directly from AliExpress?
Yes, this is a question that needs addressing too. Why would anyone buy from you when they can just go to AliExpress and place their order with the supplier? Well, there are a few reasons.
One of the main reasons is that when a consumer buys from you, they don’t have a clear understanding of AliExpress and the original suppliers. It might be surprising, but dropshipping is a term that is only understood by people who are doing it. The majority of consumers probably have never heard of it, let alone AliExpress.
Reliability is another reason. Would you buy a product from a dropshipping store that has 500,000 followers and great reviews, or would you go to a Chinese website to buy it from an unknown seller?
Shopping experience is also a big reason for which consumers are willing to pay more. When you’re reliable, your customers can rest assured that if they receive a defective product, you will pay them back, and they won’t lose their money. On the other hand, they can buy from an unknown Chinese supplier at a lower price, but withstand the risk of receiving a defective product and losing money. Buying from you is a much better deal.
The last (but not least) reason would be convenience. Most dropshipping businesses spend their ads money on Facebook, and consumers buy when they see the ad as their need is triggered. Otherwise, they won’t know about the product in the first place. When they see your products, they won’t bother checking cheaper alternatives if you’re reliable, and your pricing is acceptable.
6. How does dropshipping with AliExpress work?
As mentioned above, the very reason that fresh online entrepreneurs are attracted to dropshipping is that it requires little initial investment to get started. More specifically, you won’t have to deal with storage costs, you won’t have to handle fulfillment and shipping, and you won’t have to make any upfront investment for inventory. Dropshipping is the cheapest way to start an online business.
One of the closest associations to AliExpress is eBay, but AliExpress is much larger, and its price points are far less expensive. You can buy from AliExpress, sell on eBay, and still make a profit.
Here is a quick example to give you an idea of what the difference in price is.
This piece of snoring mouth guards costs just $2.99 per piece one AliExpress
But a similar product can be sold at $22 on Amazon.
The margin on this product is incredibly high! Imagine that you can buy a product for $1.73 and sell it for $26 without any upfront cost of purchasing and keeping inventory. That’s what dropshipping can bring about. BUT, as with everything in life, what’s great never comes easy.
7. Pros and Cons of dropshipping with AliExpress.
7.1. Pros of AliExpress dropshipping:
It’s undeniable that AliExpress dropshipping is amazing! Due to this awesomeness, thousands of entrepreneurs all around the world, especially in Europe and the US, are dropshipping with this platform. Here is the breakdown of why AliExpress is awesome:
Low startup costs
As mentioned many times above, one of the main reasons for AliExpress’s popularity is you won’t need to put up a lot of initial investment to get started.
In case your plan does not work out, and your business fails, there’s not much to lose, so you don’t have to worry about the risk of losing tons of money. Again, compared to retailing, if you fail, you will lose all of the investment you have put in your inventory. Dropshipping enables you to pay only when you get an order from your customer.
Also, for whatever product you showcase on your store that doesn’t sell, you can just get rid of it and replace it with something else at no cost. This will allow you to try tons of products at a time to find out which one works best for you.
Learn more: How To Deal With High Risk Orders On Shopify
With dropshipping, you don’t have to operate a brick-and-mortar store, which means you can run your business from anywhere in the world. All it takes is a computer and a stable Internet connection. It’s up to you if you want to work from home or on a Miami beach!
Buying and maintaining inventory can be really expensive, especially if you want to sell lots of products at a time. With retailing, you will have to purchase a certain amount of stock to get a wholesale price, which allows you to make profits. Imagining that you’re planning to sell a dozen products, and each of them requires you to put up $500 worth of stock to get a reasonable price for retail. The total cost of inventory can add up to thousands of dollars very fast.
AliExpress dropshipping completely removes all of this barrier and risk. You can sell thousands of products on your store without a single penny invested in inventory; no warehouse costs, no leftover stock, and no headaches.
Running a retail store involves a lot of fixed costs called
overheads such as rent, employee salaries, bills, and many more. With dropshipping, there’s barely any overhead costs, and everything you need is already on your computer. If your store grows out of your ability to handle alone, you can hire virtual assistants or freelancers to assist you rather than full-time staff.
7.2. Cons of AliExpress dropshipping:
I’m not going to lie - With all the good also comes the bad. Dropshipping with AliExpress has its own obstacles that you need to overcome if you want to become successful with this business model. So, here are the bad things so that you can get well prepared.
At the time you’re reading this article, dropshipping is no longer a brand-new concept; it’s actually pretty old as it has been around since the Internet exploded.
No matter what niche you’re going to choose, there are already hundreds or thousands of dropshipping entrepreneurs operating in that niche. That means you’re going to have some serious competition.
It’s easy to understand why this happens. The low start-up costs and small barriers to entry make it easy for you, but also for everyone else.
Because there are too many players in the game, the key to building a successful dropshipping business is branding. The majority of dropshippers don’t even bother branding themselves, so if you make branding the core of your business and develop a strong brand, you can stand a chance to stand out and overtake your competitors.
- How To Name Your Brand? 10 Naming Tips for Your Business
- How To Create A Logo For Business- A Complete Guide
- Shopify Brands Apps 2020
Lack of control
Lack of control is the biggest disadvantage when it comes to dropshipping with AliExpress. You will not have much control over your suppliers, their fulfillment, and delivery process. You will have to be dependent on them and trust them that they will deliver on time, as well as ensure their product quality.
You will need to do your due diligence on the supplier on the suppliers very carefully by checking their reviews, ask for their policies, or using your common sense to evaluate their professionalism.
It can be really disastrous if your supplier turns out to be a scam as they ship a brick to your customer, and in that case, remember that your customer will blame no one but you.
When you dropship with AliExpress, your customer’s order will be delivered all the way from China, so the delivery time can take weeks up to two months.
You can have your supplier ship with faster delivery options such as DHL and FedEx, but these options are often quite pricey. Make sure that you make it clear to your customers about your delivery options, how much they cost, and how long they will take.
Most suppliers also offer faster shipping options, like DHL and FedEx, but these are pretty expensive.
For some products, you can sell at a high margin such as the snore stopper mentioned above, but if your market is crowded, and there are many competitors who offer the same products, your margin will get lower and lower, because everyone will be trying to lower their prices to become competitive.
Because of the fact that most dropshippers drive traffic via Facebook ads, it’s very easy that your customers are shown the same product from different sellers, and if your price is higher than your competition, your customers can easily compare. If you price your offer up too high, you will risk losing your credibility.
Make sure that you check out your competition before you price your products, and as I mentioned above, the key to a successful dropshipping business these days is no longer pricing, but branding.
Complicated refund/return process
When your customer runs into a quality issue and demands a return, the return process is nearly impossible, because no one really wants to send that broken product back to China and wait for a new one to come. It’s worth mentioning that quality issues can happen very often because of the delivery process, not because your supplier intentionally shipped a defective product. You will need to have a very clear refund/return policies to deal with these scenarios.
Further Reading: How to Cancel an Order on AliExpress
8. How to dropship with AliExpress:
8.1. Eight tips for choosing the right product:
The first step to start your dropshipping business is selecting a niche (products to sell). If you’re not sure yet where to get started, begin with the product categories that AliExpress provides on its official website, and see what you find the most potential to sell in your market.
Tip #1: Find out the potential of a product:
You shouldn’t focus on just one product because that product that you think is cool might not have any potential for selling in your market. Instead, go through all of the categories on AliExpress and form a list of a dozen of products.
After that, you can go to the Google Keywords Analysis tool to find out what the current monthly traffic for each product in your market is. The bigger the search volume for a product is, the more potential that product will be.
When you land on the Google Keywords Analysis page, select
Discover New Keywords and input keywords for your chosen products into the search box.
After that, Google will provide you with the average monthly search volume for your keywords. Here’s the monthly search volume for
airpods case in NYC during the last 12 months.
Next, go to Google Trends and search each of your product keywords to find out what the current trend is. Is it increasing, decreasing or remaining stable? If the trend of a product is decreasing, you should skip that product.
Once you have found your niche by using Google Keywords and Google Trends, now you need to start selecting the products within that niche that you want to dropship on your store. I will take airpod cases as an example. For every category on AliExpress, there is a huge number of offerings from many different suppliers, and if you don’t have a list of criteria to filter out suppliers, the process can get overwhelming really fast.
No worries, because I have got a list of criteria here for you. This list is by no means perfect, but it will help you avoid terrible suppliers, and allow you to narrow down your list to a few best suppliers to interact further for a partnership.
Tip #2: Avoid brands, knockoffs, fakes.
You should stay away from products of any existing brand to avoid reselling knockoffs and fakes. If you don’t have a legal partnership with a brand, reselling any of its products will get you into trouble because most brand-name products require that any reseller of their products needs to have their permission (This is especially true with high-end, luxury brands). These brands even have legal departments whose only job is to find people reselling their products without their permission and bring them down. No matter what platform you’re going to sell on (e.g., Shopify, BigCommerce) if they receive proof that you don’t have to permission to sell their brand’s products, your store will be closed, and you also can get banned from selling on that platform.
Tip #3: Aim at suppliers with more than 300 orders.
When you see a product with lots of orders, that means a few important things. First, there is certainly a demand for that product. Second, if a supplier has got this many orders, that means that supplier is reliable; more reliable than average, I’d say. So when you look for a product, choose the option to sort by orders. This will provide you with suppliers based on the volume of orders they have conducted.
Tip #4: Look for ePacket Shipping.
Shipping is an important aspect when it comes to dropshipping with AliExpress. As your order will be shipped from China, it can take weeks up to two months to get to the US with conventional shipping options. This delivery time can be too long for your customers and might discourage them from buying. Fortunately, there is a fast and affordable shipping option called
ePacket Shipping that you should look for.
ePacket is a delivery option provided by third-party shippers in Hong Kong and China. This service enables you to provide your customers with a fast and affordable delivery option for light-weighted packages.
Before ePacket, China EMS, a conventional shipping option, was the only affordable choice to ship orders from China to the US. The downside of this shipping option is it would take up to a month or even longer for your customer’s order to arrive at their door. There were other quicker options, but they were way more expensive, and for small, inexpensive products, the cost of shipping can double or triple the cost of the actual product.
The main purpose of ePacket already reflects in its name; this delivery service was made, especially for eCommerce. ePacket provides fast shipping times and affordable rates at the same time for products shipped from China and Hongkong. This service was originally available for only shipping to the US, but lately, it has expanded to 35 other countries around the world such as Australia and Canada.
ePacket delivers your product door-to-door in around 14 days, and it will provide you and your customer with a tracking code for checking the current location of the order.
So, you should look for suppliers who can provide the shipping option of ePacket so that your customers won’t get discouraged by long shipping times. It’s worth mentioning that some suppliers offer this delivery service for free as the cost is factored into their pricing, but it’s not free for some suppliers. Either way, it’s still the most economical and reliable delivery option currently to ship products from China to Europe and the US. So you should go for it regardless.
To find out if a supplier provides ePacket, you can go to their product page, and click the link circled in green.
A list will show up, and you will see if there’s the option for ePacket.
At the time of me writing this article (Dec 18, 2019), it takes 16 days for the order to get to the US on January 3, 2010. Singapore Post will deliver two days earlier, but the rate is almost double, so it’s not really worth it, in my opinion.
Tip #5: Aim at suppliers with above 4.5 stars rating.
This is the minimum rating that you should look for. Suppliers with the rating score below this point tend to have lots of problems with their product quality.
You can also read reviews about their products by going to their product page. Make sure you find out about all of the problems that you might encounter with their products by reading the one-star reviews, and ask them how they will deal with that when it arises.
Tip #6: Choose products of low prices for a high margin potential.
At the beginning, you should only choose products that fall into the $1-$20 price range because this price range will allow you to spend more on marketing to acquire new customers. Also, products of low prices are typically best for triggering out-of-impulse buying decisions, while customers tend to think a lot more carefully before they decide to buy when it comes to products of high prices. The longer your customers have to consider their expenses, the less likely they will buy. At the beginning, your capital is probably small, so make sure that you get back every marketing dollar so that you can keep your business running.
In the case of airpod cases, you can buy this one for $0.97 and sell at $5, because a pair of airpods cost $159, so who would bother spending $5 to protect it? This will leave you with 500% profit margin before you factor in your marketing costs.
Tip #7: Look for communicative, supportive sales reps.*
You should not be afraid to ask tons of questions before you decide to establish a partnership with a supplier. Actually, this is one important step where you can find out if the supplier is worth partnering with. If the supplier is not hesitant to answer any of your questions, and it’s even better if they provide you with cautions about their products and services in advance because this signals that the supplier is looking to establish a long-term partnership with you, so they want to make everything clear at the beginning.
Tip #8: Order a sample.
If you want to be sure that your customer will receive exactly what you see on AliExpress, you need to see it for yourself first by ordering a sample. However, while this is the right thing to do, you can run into trouble if you want to dropship 100 products because it will cost you tons of money to order a sample for each of those products to check for quality.
Instead, what you should do is order samples just for the products that you’re going to advertise. These are the products that you think will be most likely to sell or bring you the most traffic to your store. Savvy dropshipping entrepreneurs would order samples of these most potential products to make sure that they come with the expected quality. It’s clear that you just can’t run advertising campaigns for 100 products at a time, right? Only Wish (the shopping app) can have the money to do so.
Make sure that these core products are of expected quality will help you build credibility for your store, and they will help you expand your sales to other products.
Recommend: Start Shopify Dropshipping with Aliexpress
8.2. Set up your dropshipping store:
In order to dropship with AliExpress, you need to use an app that is built for dropshipping and a functional website. There are a lot of apps for dropshipping on the market, but to make everything simple, let’s assume that you’re going to use Shopify to host your website, and the app that you’re going to use is Oberlo (if you have not heard of Oberlo, it is an app owned by Shopify and solely built for dropshipping). Now let’s go into the details.
Step 1: I’m assuming that you’ve already got a Shopify store. If you haven’t, you can register at Shopify.com.
Step 2: Go to app.oberlo.com/register and create an account. Once you have registered, you will be automatically directed to your Oberlo Dashboard.
Step 3: Click on that
Create or Connect a Store button to link your Oberlo account to your Shopify store.
When you see this dialog, scroll down and click on
Install App to install Oberlo onto your Shopify store.
Step 4: Now you need to import products from AliExpress to Oberlo, and then Oberlo will sync your data with your Shopify store. You can go to app.oberlo.com/explore to look for products, or you can enter the URL of a product and get it immediately.
Step 5: When you have imported all of the products you want to dropship, go to app.oberlo.com/import where you can see your products.
You can make changes to the product description, images and variants in the corresponding sections.
Step 6: When you have finalized your product details, import that product to Shopify by checking that little box on the left corner and click
Import to store.
Now go to your Shopify Dashboard, and you will see the product in your product listing.
You can see your imported products on Oberlo at app.oberlo.com/products.
Step 7: Set up your default delivery option.
As mentioned above, ePacket is the ideal option for shipping from China to the US, so you should set it up as a default shipping option.
Go to your Oberlo Dashboard, in the
Setting section, go to
Default shipping method, click on the drop-down and choose
Step 8: The last thing that you need to do is make sure that when a product on your store goes out of stock on AliExpress, it will be taken down from your store. To do this, you need to set up your auto-update settings. Oberlo updates product details every 6 hours.
Go to the
Setting section, scroll down to the
Auto updates section.
Here you can set up auto-updates based on how you want changes from AliExpress to show up on your store. You should check the
Notify Me box so that you can know when an item goes out of stock or price changes.
Congratulations! You have just set up your dropshipping store successfully, now you can start dropshipping!
Learn more: How to Fulfill Orders on Shopify using Oberlo
9. What you should know about returns and refunds on AliExpress?
Most AliExpress suppliers don’t offer returns for orders (this makes sense because returning means you have to send the product all the way back to China). Because of this, you will need to establish a return policy of your own. There are two most common cases for returns:
- Your customer’s order never arrived. If this happens, you should make a refund to your customer first. Then you need to discuss with your Aliepxress supplier to find out why this issue happens, and find a solution to make sure that it will not happen again.
- The product was damaged. Shipped all the way from China to the US, the product can get damaged at some point. This is not really rare, and it’s understandable, so this case is less serious than the above situation. When your customer receives a damaged product and raises a complaint, you should ask for images of the damaged product, and then issue a refund to the customer. Again, you then need to talk to your AliExpress supplier to let them know that their packaging is not sufficient, and ask them to improve it for the next orders.
10. 3 tips for success in AliExpress Dropshipping:
10.1. Create a niche store:
“Is it better to open a store around a specific niche such as iPhone accessories, or to open a general store like WalMart and sell everything that you find potential?”
This is a fairly common question among first-time dropshippers. If you’re having this question, you need to understand that if people look for a general store, they will go to Walmart or Amazon. That’s the power of branding. So, if you open a general store, you don’t stand a chance to beat Amazon or Walmart in the consumer’s mind.
That’s why the more general your store is, the harder it is for you to establish your brand in your potential customers’ minds. If going wide is not an option, the other option is going deep. What I mean by that is if you set up a store that sells quality iPhone accessories at the best prices, that will attract people who are interested in iPhone accessories, and when they need to buy iPhone accessories online, they will think of you. It’s really confusing to go to a store and see that it’s selling iPhone accessories, wallets, water bottles, and a bunch of other products that are not relevant to each other.
With Facebook, Instagram and other social media platforms, selling niche products has become easier than ever, because they enable you to target your ads to very specific audiences that are likely to be interested in your products.
Related Post: Using Instagram for Business
10.2. Don’t go after the best-selling products:
While you’re looking for products on AliExpress, you’re going to see a section where there are best-selling products are showcased. It can be compelling to go there to have a look, and think to yourself that, “This product is hot, so it will sell well. Let’s add it to the store.”
If that’s the case, hold up a little bit, because it’s not that easy. You need to understand that these products are chosen to be best-sellers based on AliExpress’s analytics on a global scale, not based on data from your region. For that reason, there’s no guarantee that a bestseller in other markets will be a bestseller in your market. So, don’t go after the best-sellers, instead, stick to data from Google Keywords and Google Trends, which I have discussed in Section 8.1.
Upselling will help you get bigger revenue and profit from orders. When you go to McDonald’s, and you order a burger, what do the cashier always ask you? “Do you want some coke?”, “Do you want some fries?”. That’s upselling. And those two simple questions bring millions of dollars more to the fast-food chain’s revenue every day.
By upselling, you will increase your chance of acquiring a bigger revenue for your advertising spending. To be more specific, you spend $1 to get a customer to your website to buy an airpod case, and by upselling them, you get them to end up buying an iPhone charger and an Ipad cover too. That’s the bigger revenue you get for your advertising dollars. For whatever platform you want to use to dropship, there’re lots of apps for upselling purposes (such as Bold Upsell on Shopify).
Dropshipping is a tried and tested business model that has brought success to thousands of Internet entrepreneurs. I hope this article has provided you with a comprehensive guide on dropship with AliExpress, and helped you kick off your dropshipping business. :)
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