Have you ever wanted to start dropshipping with AliExpress? You have probably read a few horror stories online where it has gone terribly bad for other dropshippers, which may have put you off from doing so.
It does come with its risks, just as all businesses do; however, you can mitigate these risks in most cases just by preparing for them.
In this article, we will look at the pros and cons of using AliExpress to dropship from.
What is AliExpress?
In 2010, Alibaba, which is a goods wholesale platform, launched AliExpress.
AliExpress helped paved the way for dropshippers largely because they don’t require a MOQ (minimum order quantity) which their parent company requires on most of their products.
This is a great concept which, in theory, doesn’t require you to hold any stock physically and to act as a middle person within the supply chain.
Should you have a great deal of buying (and selling) power, you should certainly consider buying in bulk with Alibaba for much lower cost prices.
How do you dropship from AliExpress?
There are numerous ways to dropship from AliExpress. Fortunately, large ecommerce platforms such as Shopify and WooCommerce have full integration with applications that automate the order fulfillment aspect.
The most favored application is Oberlo. There are, however, many others such as Dropified, Importify, and DSers, to name but a few.
If you’re interested in finding the right one for you, then check out our other article that contains all the Oberlo alternatives.
These applications act as a go-between for your store and AliExpress. They also semi-automate the importing of products, descriptions, and images from the product page on AliExpress.
If you have decided that Oberlo is the application for you, then we have answered your 10 most asked questions on them here.
Now that you have a rough idea of how to dropship with AliExpress let’s jump straight in and go through the pros of using Aliexpress for your ecommerce store.
Don’t worry though, we will also cover the cons below!
The Pros of AliExpress dropshipping
There are numerous pros to dropshipping with AliExpress; we will only go through the main ones as the list can get pretty long.
1. You don’t hold any stock
Yes, that’s right, you hold no stock. This is essentially what dropshipping is; your supplier will ship the product directly to your customer. This means your money is not sat on shelves but instead stays in your bank until you order the customer’s product.
This helps people with only a small capital gain entry into the market whilst offering little to no risk should your idea not take off like you’d expect it to.
We have a lot more information in our article on dropshipping for beginners if we have lost you a little there.
2. Low startup costs
When using AliExpress’s parent company, Alibaba, most suppliers will require a deposit and a minimum order commitment with them before doing business with you. This is to make sure you are both serious and have the selling power to do business with them.
This is a major stumbling block for people just starting, as not everyone will have that kind of money, to begin with.
AliExpress, on the other hand, only requires you to pay for what you have sold.
3. Minimal risk
Should your business idea not go your way and find yourself losing money, you aren’t stuck holding inventory.
With your typical brick and mortar store, this is a risk that they have to deal with amongst numerous other rates such as electricity, wages, and rent.
When starting a dropshipping business, the absolute minimum which you can get away with paying for is the products you sell, your advertisement, and your hosting.
You will actually need very little capital to get started dropshipping from AliExpress; we went over this in the article on my €300 dropship experience.
If you’re interested in learning more about the costs of dropshipping, then I suggest reading this article here as well.
4. Unlimited inventory
Not only do you not need to hold any inventory when dropshipping by AliExpress, but the amount of inventory your suppliers hold really has no limit.
Your typical supplier on AliExpress will hold an impressive amount of inventory and usually have access to a great deal more further up the supply chain if need be.
However, if you expect to sell a lot, then it’s always worth asking your supplier what will happen if you sell all of their inventory.
5. So much choice
It would help if you thought AliExpress as an Amazon alternative. The sheer range of products is astonishing. The only difference between the two is you are likely going to find the same product cheaper on AliExpress.
Many sellers on Amazon are actually using the same suppliers as AliExpress vendors, so don’t fall into the preconception that Amazon products are of superior quality; they are normally coming from the same manufacturers.
For example, did you ever see a ‘made in China’ mark on your product that you purchased?
Because you aren’t holding any stock, you are completely flexible about how and where you run your business; you are not tied to any physical location.
Due to the huge choice of products AliExpress offers, you can also pivot your business in another direction should your initial range of products not be a huge hit.
The Cons of AliExpress dropshipping
Now that we have gone through the pros, we also have to look at the cons of using AliExpress for dropshipping in 2021.
1. Very competitive
As we discovered in our earlier article on the 10 dropshipping risks to consider before starting your store, interest in dropshipping has increased greatly over the last decade.
Competition has increased as a consequence. This problem, however, is not entirely exclusive to dropshippers using AliExpress, but dropshippers as a whole.
A unique problem to AliExpress is when a new product is trending, AliExpress will reveal this to you and all of your would-be competitors on their product ranking page.
Because of this, the market on a hot, new product gets incredibly saturated very quickly when selling products on AliExpress. Essentially, if you are not ahead of the curve on what’s hot and what’s not right now, you will be entering a tough market.
If you’re interested in learning more about saturation in the dropshipping space, then check out this article here.
2. Lack of control
Communication is key with your suppliers in all businesses, but much more so when dropshipping. Because you do not physically hold your product, you will have little idea what it will look like when it gets to your customers.
You are always advised to order the products for yourself before you start selling them. Speak to your supplier on the packaging and the product specifications. Trust me when I say you don’t want to find out the hard way as I did.
As you get more sales, it is equally important to order the products again here and there to spot-check any changes and inconsistencies. Should you find any, take it up with your supplier to enforce that higher standard.
3. Shipping times
The time it takes for your customers’ order to arrive is a big one, this is something you would want to speak candidly about with your supplier.
If you’re interested in learning more about this, you can find a few tips on how to improve AliExpress’s shipping times here.
Last year, in particular, was a difficult one for shipping times. With the slow decline of ePacket delivery, many dropshippers, myself included, struggled to find an equally reliable alternative.
Don’t be embarrassed to ask them for tracking numbers for deliveries to your target countries to confirm what they are telling you; this is something they should be prepared to provide.
4. Slim profit margins
Wafer-thin profit margins are one of the biggest problems for dropshippers today. This is a mixture of increasing CPC (Cost Per Click), competitors undercutting one another, and product cost prices gradually increasing.
The issue with slim profit margins will take you to a difficult crossroad at some point, and the solution will inevitably be one of three outcomes, each with a drawback of its own:
- Reduce costs such as your ad spend or selling a lower costing product – delivering potentially fewer sales.
- Increase sell price – also harming your sales.
- Increase sales – requires you to spend more on ads.
Of course, there is the fourth option of doing nothing, but this also poses its own problem of being bowled over by your competitors who acted to improve their profitability.
Doing nothing will only work if you are sure that your competitors are not turning a profit.
You can check out our complete pricing strategy for dropshipping stores here.
5. Non-branded and knockoff products
Some AliExpress dropshippers are either negligent in selling these off-brands or, quite frankly, don’t care that they do. I can imagine the return rate on such a product would be quite high. Save yourself the hassle, and don’t do it.
6. Complicated refund/return process
This is something I have experienced first hand; the returns process with AliExpress can be horrible, and in the worst-case scenario, it could take up to three months to get your money refunded.
This is where you will need to accept your responsibilities as an online business and deal with your customer first, then handle your dispute with your supplier afterward.
It helps to have the conversation of returns with your supplier before you start using them; you can then cover this in your returns policy.
How do you find the right dropshipping supplier?
We may have mentioned this a few times already, but striking a good dialogue with your supplier is crucial for your business to be successful. By asking the right questions, you will set a high standard from the get-go with your suppliers.
Language barriers can be a problem, and I would suggest you have a little extra patience in this regard when asking questions. However, should you not get a sufficient response after a few attempts, then give up on them; it can be a recipe for disaster.
Take a look at their feedback
Feedback on both the seller and the product is essential in painting a picture of what could be your customers’ experience.
The product reviews are a good way to determine if there are any issues with the product quality or problems with the delivery; some reviews will also come with a picture attached.
Additionally, the seller also has an info page where you can find information such as how long they have been around, where they are based, and their average feedback.
A seller that has been around for a few years and sells many products is a good sign of an established business that isn’t going to hustle you for a few dollars because their reputation means more to them than that.
For more tips on finding the best suppliers on AliExpress, check out this guide here.
To sum it all up
We have gone over quite a bit in this article, but one of the major things we should take away from this is that you shouldn’t underestimate the importance of asking your suppliers questions and follow-up questions.
AliExpress has gotten a bad rap for poor quality products, but this is down to you, the seller, to ensure that you sell high-quality items. Businesses are selling the same AliExpress products through Amazon, so it’s not all bad.
The financial risk of dropshipping through AliExpress is minimal, and the capital required to start is tiny compared to most other businesses. However, beware as this comes with its own unique set of problems such as slow delivery times and lack of quality control.
Should you do your due diligence, as you should with any business type, your problems will be minimal, and your ecommerce store’s potential can be limitless. So get started today, and don’t forget to let us know how you get on!
If you want to grow, find a good opportunity. Today, if you want to be a great company, think about what social problem you could solve.Jack Ma – Executive chairman of Alibaba and AliExpress