By now, you might be aware that the past ten years have seen the world of dropshipping explode from a relatively small niche distribution channel into a global phenomenon that’s a key driver in the $3.46 trillion e-commerce industry. And with this explosion comes an increased demand for both more sophisticated e-commerce storefronts as well as more comprehensive distribution sources. I’ve discussed some of the pros and cons of e-commerce site builders before, but there’s one major player in the dropshipping industry that many of you have asked me a lot about over the years—AliExpress. Today’s article will reveal 7 secrets you should know so you can know better how to dropship from AliExpress when/if that time comes for you.
In just ten years, AliExpress has gone from an online business-to-business sales portal to a consumer retail titan with over 100 million global users. And according to Ahrefs (see chart below) their monthly organic traffic has grown from 6 million a month to over 52 million in the past 3 years (2016 to 2019).
AliExpress has been referred to as China’s answer to eBay, and the analogy can be an apt one. Manufacturers are competitive, offering a great pricing structure, flexible payment options, and user friendly interfaces currently available. Those factors alone makes AliExpress an ecommerce force to recon with. But should you use them yourself to build your dropship business? Here are some of the pros and cons below for you to weigh for yourself before deciding whether or not AliExpress is right for you.
7 secrets to know
1- You can use AliExpress to quickly validate top selling product sales and trends
One of the chief advantages I’ve found with AliExpress is that they’re fully aware most of their customers are going to be resellers just like you or I. And they don’t hide it. In fact, they have a special dropship center option you can sign up for which allows you access to their product analysis tool. This is an incredibly powerful tool which allows you to visually track the daily amount of sales on any given product; an absolute game changer if you most of your sales are seasonal. Click here to activate the AliExpress dropship center tool.
2- Sourcing Products From AliExpress is Different Than Getting Approved With Dropship Suppliers Directly
This is a huge source of confusion for some people. AliExpress is an online retailer, very similar to Walmart. Thousands of dropship retailers use AliExpress to source products, hike up the price, and try to sell them online for a profit. If you’re using middle men like the Shopify Oberlo app that’s what’s happening. There’s no official approval process like there is with legit dropship suppliers. Anyone in the world can buy directly from AliExpress, including your customers. And many times they do and will after they discover they could have purchased that same product at a lower price.
That process of simply hiking up the price from once source and selling it higher is what we call retail arbitrage. Each AliExpress supplier will vary dramatically in terms of both product quality and service. With an actual dropship supplier you’ll be required to fill out an application and wait to be officially approved. When that happens you will receive access to lower pricing that is impossible for the general public to have access to. Do you see the difference now?
It’s no secret that most of the products available on AliExpress are manufactured in China. And virtually all of your suppliers will also be located in China. Many of them however do have warehouses in the USA reducing shipping times to around 7-10 business day instead 20 to 45 days. That’s a fiercely competitive advantage for you just on the mark up alone—sometimes even greater than 40 percent. And these are products that people want because they are many times not easy to find at your local department store such as Target, Walmart, Best Buy, etc.
4- Delivery times and customer service from overseas are historically slow
The average shipping time for delivery by air freight from China to the U.S. is approximately 8 – 10 days. And that’s by air freight alone. It’s not unheard of for parcels to reach the U.S. from China in excess of 30 days.
But it’s not just delivery time alone that can make dropshipping with AliExpress inconvenient. It’s customer service. I’ve heard nightmare stories from some of my students about orders being incorrectly shipped, damaged or just plain lost in transit. Issues that took months to resolve. That’s going to reflect on your business, your reputation, not the supplier. And if you’re using a fulfillment center, keep in mind that many of the suppliers on AliExpress aren’t capable of complying with domestic labeling and packaging requirements. It’s not impossible though. With a bit of research work you can find direct suppliers through AliExpress, contact them, convince them you can sell high volume by working with them directly. If they agree you can enjoy a direct relationship with them, and get faster and cheaper shipping rates compared to the masses who play the retail arbitrage game only with AliExpress’s system.
If you’re looking for valid dropshipping suppliers located in the U.S.A., I put together the following starter dropship list for free you may want to check out here. Legit dropship suppliers have no fees to join. They simply want retailers who are reputable and can sell product while offering world-class customer support.
5- It’s easy for beginner dropship resellers to make their first batch of sales using AliExpress
If you are new to dropshipping and have never made a sale online, then using AliExpress can be a great short-term solution to help you build your confidence in selling products online. Simply choose a product that solves a specific problem, increase the price and sell it. Don’t count on repeat sells, but this approach is very easy which is why most people take this path. It’s best to choose a unique product that is not easily found off-line. From there you can present that product on your website, social media, and drive traffic to it from Facebook for example. Yes, it still takes work and is not going to happen over night. But within a week time period you can learn how.
6- Knock-off products abound on AliExpress
Many products that come from China are well known to be knock-off products from products originally invented or created in the United States or elsewhere. If you’re not paying attention to the details before sourcing products from AliExpress you might think you’re getting access to a Samsung 7 smartphone that you hope to resell at a higher price, but then come to find out the phone is really a Sumsang 7 smartphone.
7- Easy to access marketing videos, images and docs
To quicker you can get to the point of advertising your product(s) to the right people the sooner you can make money. Period. That’s the fastest path to making money online. Make sense. AliExpress accelerates the process for you to reach the point of marketing by allowing suppliers to present marketing videos, images, diagrams, text, etc you can use to tweak and use in selling the product. It’s quite common to see dropship retailers tweak the AliExpress product video and use that as their video ad on Facebook campaigns. Not every product will have a demo video to use, but some do like this kids camera here.
In short, the pros of using AliExpress can help you start a great dropship business, just don’t plan on it long-term. Converting over to a private label model or or fulfillment center is more sustainable in the long-term. AliExpress is a great short-term solution to see what sells for you or even use as a source to find proven products that you can find USA suppliers for instead.
Sometimes, you might find that informing customers ahead of time about limited inventory and long wait times might not impact their decision at all. More often than not, you’ll probably find the opposite to be true. Customers frequently want convenience as much as they want a bargain. As long as you implement business practices to empathize with your customers and match your business model to follow suite you’ll find your customers coming back to your store giving your greater pay days.