Many dropshippers confine themselves to dropshipping in their home country, perhaps because they feel they are not ready for international expansion.
But did you know that there are many lucrative alternative markets that could be explored?
If not, then this article will help you decide which markets are most suited for your business!
With suppliers offering worldwide shipping, international borders have become blurred and dropshippers are shipping their products worldwide from the comfort of their own home. A good roadmap helps you avoid potential problems and sets you on the road to business growth.
So, without further ado, let’s first go over what worldwide dropshipping exactly is:
What is worldwide dropshipping?
Dropshippers traditionally ship straight from the manufacturer or wholesaler to the customer in a targeted country without the requirement of a physical warehouse to store their inventory.
Because most suppliers can ship anywhere (double-check with your supplier first), many dropshippers set their shipping parameters to “worldwide” to test which country gives them the best results.
But should you do dropshipping this way?
Let’s find out together!
And if you’re interested in learning more about the basics of the dropshipping business model first, then I suggest reading this article here.
The pros and cons of dropshipping worldwide
Many dropshippers stick to what they know and sell within their own country of residence or to the “top five” countries:
- The US
- The UK
- And New Zealand.
Because many suppliers are based in China and ship worldwide, dropshippers can easily broaden their reach and take advantage of the global market rather than competing solely in saturated markets.
But should you?
Let’s look at the pros and cons of dropshipping worldwide:
The pros of worldwide dropshipping
Increasing your reach worldwide allows you to tap into new target markets, possibly at a significantly cheaper advertising cost.
Let’s dive a little deeper into what makes this a good strategy:
1. Not relying on very competitive markets
While the US, for example, as shown in the chart below, is the largest consumer market in the world, market saturation may increase your competition and you may experience a decrease in demand for your products.
Ecommerce giants like Amazon and others provide stiff competition, not to mention the tons of smaller Shopify stores heavily concentrated in the US.
As a result, sales of “winning products” become maximized. To do well in these saturated markets will require improving the product, taking existing market share from a competitor, or increasing customer demand, which you can learn more about here.
2. Less expensive advertising costs
In less saturated but developed markets, where there is less advertising competition, the advertising costs are lower.
Starting your campaigns in these countries could also be a way to build up your ad budget for targeting the “top five” countries.
3. Discovering untapped markets
Whilst competition is healthy and provides momentum, there is much potential in less competitive markets, where spending power is strong and adoption of ecommerce is high.
A good idea to assess which additional markets to tap into would be to access your orders and sort them by country. This will give you real live data on the countries that are working for you.
You can use Google Analytics for this. You’ll be able to get a good view of the countries generating the most sales for you.
You may be in for some surprises!
4. Less demanding customers
Because shoppers in “big 5” countries are used to 2-day shipping features from companies like Amazon, they have come to view this as standard.
For beginner dropshippers using AliExpress with long delivery times, this makes it very difficult to compete.
The cons of dropshipping worldwide
Now that you’ve seen the pros of dropshipping worldwide, let’s continue with the cons.
Yes, not everyone out there covers these cons, but at Do Dropshipping, we think it’s important that you know everything about the business model.
This brings me to my first con; a high fraud rate:
1. High fraud rate
Many countries have developed a reputation for having a high fraud rate.
For example, according to Internet Retailer, Indonesia leads the world in ecommerce fraud, with as many as 35% of all transactions from Indonesia identified as probable fraud. Venezuela comes in at a close second, followed by South Africa in third place.
Even with fraud challenges, Southeast Asia there is massive anticipated ecommerce growth expected, providing a great opportunity for dropshippers if we can put safeguards in place.
When starting out, however, we want to avoid countries with low buying power and a high rate of credit card fraud.
Countries that have developed a reputation for ecommerce fraud are largely those with low economic conditions and inadequate internet access.
We’ve summarized the countries that have the highest ecommerce fraud cases to help you safely establish your global ecommerce penetration:
- South Africa
2. Low adoption of ecommerce
Generally, more economically advanced countries can afford to spend more on luxury or non-essential items since their basic needs have been taken care of.
In less developed countries, social network penetration may be low, which means you may reach fewer people with your advertising.
3. Worldwide dropshipping creates payment gateway problems
Payment options and payment gateways may cause you to run into problems with order processing. You may pay for advertising in countries where the sale is ultimately not made because payment gateways are problematic, and worse, where fraud is high.
Test different countries, by all means, but separate your campaigns per country so that you can easily analyze your results. Unusual cart abandonment in a particular country should be an obvious indicator of a payment gateway problem.
Things to consider if you want to do dropshipping worldwide
Dropshipping worldwide is a great opportunity for dropshippers to extend their reach overseas, capture a wealth of new customers, and increase profitability.
If a product is doing well in your home country, and you are keen to achieve the same results in other countries, these factors are worth considering:
If you are targeting countries that are not English speaking, like Germany and France for example, and you are using Facebook ads, set the language to “English All” to target English Speakers.
If you’re interested in learning more about using Facebook Ads for dropshipping, then don’t forget to check out our complete beginner’s guide here.
Eventually, as your store grows and expands to non-English speaking countries, you may also wish to consider setting up a multi-language store. You want to make it as easy as possible for the consumer to understand your product description so that they buy from you.
The best way for you to look professional and trustworthy is to engage the services of a translator to ensure your message and product information is accurate.
As an example, take a look at H&M!
Successful dropshippers are sure to tailor their approach to the cultural and economic specifics of a foreign market.
Each country has different pockets of people with different beliefs and habits. A product could do well in one pocket but not in another. The same applies per country.
An example of this was Dutch clothing retailer, C&A who eventually closed their operation in the UK in 2000 because they were not willing to change their style to suit British consumer taste preferences.
In some countries like the US and Australia for example, brand loyalty is less important and consumers shop at a variety of retailers.
For this reason, a loyalty program would not be that effective. In countries like Portugal, Mexico, and Turkey, on the other hand, people tend to value a brand’s long-term reputation and loyalty cards, therefore, do really well.
The overall takeaway is that we should analyze several aspects of a country’s culture, ensuring that we are flexible in our marketing approach instead of using a one-size-fits-all strategy.
Currency and payment options
Payment methods can be a stumbling block for dropshippers looking to extend their reach. Consumers have different payment preferences in different countries and we need to ensure we cater to these.
Before looking to dropship worldwide, it pays to find out which payment method your new consumer prefers to ensure that you have optimized your store check-out process accordingly.
According to the Baymard Institute research, 7% of online shopping carts are abandoned because the preferred payment option is not offered.
Paypal is a provider with a strong global reputation for security and according to Statista, cross-border transactions account for almost a fifth of its transactions.
And let’s not forget the importance of currency conversion. Your customer is unlikely to spend time converting your price to their currency.
If you clearly state the price in their currency, you will increase loyalty and reduce abandoned checkouts. You can do this by using a currency converter app.
First of all, ask yourself if your product is low or high-ticket.
This will help you understand which country to target. You would be better off targeting the “top five” or ePacket countries for high ticket products (above $100). Consumers here will have more disposable income.
People in lower income countries like:
- Parts of Asia
- Parts of Europe
- or South America.
May not be able to afford a high-ticket product.
On the other hand, if your product is low-ticket, it is less risky to broaden your list to other countries.
Does your supplier ship to that country?
Be very careful with this. There is absolutely no point in making sales in a country that your supplier can’t ship to or where the delivery time is unacceptable. This is a sure way to kill your Facebook Customer Feedback score!
You’ll find this in your Account Quality dashboard setting in your Business Manager.
Look, achieving decent shipping times is one of the biggest challenges for dropshippers and the pandemic has amplified this.
You would have heard about ePacket – a shipping method offered by merchants in China and Hong Kong. It allows for the faster delivery of products from China and Hong Kong to many countries by air.
Unfortunately, shipping times and costs during a time of pandemic means ePacket is no longer an attractive shipping method for dropshippers.
To read more about the current state of ePacket and its alternatives, check out this article here.
Pricing & shipping
The price of a product in one country may be slightly different from the price in another country. A major reason for this price variation is shipping fees, which increase or decrease depending on the proximity of the customer’s country to the supplier’s warehouse.
We recommend checking the shipping costs per country to help you decide where to focus on your ads. If you use a supplier platform like HyperSKU below, select your country, and you will be able to research this accurately:
For the majority of the sales you are making outside your country of residence, you don’t need to worry about this until you are more established.
Paying your income tax is a given. When it comes to sales to UK customers, as a result of Brexit, you need to have registered for VAT effective January 2021. Shopify may monitor this in the future.
As your volumes increase, it will be important to study how taxes in different target markets affect your pricing and how much you will have to charge.
For more information about taxes, check out this beginner’s guide here.
If it is winter in the US, it is summer elsewhere. Watch your targeting if you are selling seasonal products.
Google Trends will help you identify these seasonal trends. For example, February in the US may be too early to launch your Gardening store, but it will gain good traction in April or May.
Perhaps research countries in other hemispheres where February is the perfect time to get into the garden.
What are the best countries to target as a dropshipper?
If, after reading all of this, you have decided not to dropship worldwide, let’s cover the best countries you should be targeting.
The best dropshipping countries are the so-called “top five” (US, UK, Canada, Australia, New Zealand) or ePacket countries.
These countries are English speaking, have the highest buying power, the lowest fraud risk, and reliable shipping. They are thus likely to get you the best results.
The chart below shows us the top 10 biggest economies in the world:
You may also like to consider selling to the following dropshipping countries in 2021:
- United Arab Emirates
Avoid targeting “Europe” as a whole as it may include countries where English is not spoken or where potential customers have low spending power.
We strongly suggest testing broader audiences. Try it for five days. Your results will depend on the product and you may acquire customers more profitably.
If you’re interested in learning more about these countries, then check out this great article here!
Which countries should dropshippers avoid?
The worst dropshipping countries have consumers who rarely use credit cards, have a high fraud rate, low earning power, don’t speak English, and have a slow adoption of ecommerce.
Most dropshippers avoid dropshipping to:
- South Africa
- and India
If you’re interested in learning more about why it’s better to avoid these countries, then you can check out this article here.
You should now have enough information to decide whether it is a good idea for you to dropship worldwide!
Rather than selecting worldwide dropshipping, you may wish to target the “top five” countries or ePacket countries.
We don’t want to limit ourselves to a specific country, as in one country the product may have great uptake but in another, it doesn’t sell at all.
And we certainly don’t want to miss opportunities! Broaden your country targeting list with cautious testing and careful research to ensure your supplier ships to the selected country.
The bottom line is that careful planning and testing give you the most bang out of your buck.
Good luck with your dropshipping store!
Getting Started with Dropshipping in 2021
So, are you ready to get started with dropshipping? Or maybe you have already started, but you’re looking to get some inspiration?
If so, then I suggest reading this complete Shopify dropshipping guide.
It’s a huge article, but it contains everything that you need to know to create your own Shopify dropshipping store in 2021. It’s like a dropshipping course, but then for free!
Reading this article will surely help you to get started and to stay motivated while beginning and continuing your dropshipping journey.
Just don’t forget that success takes time. Keep improving each and every day!
And here are the articles I suggest you read next:
- Can You Do Dropshipping With Suppliers Outside China?
- Unique Dropshipping Store: 11 Amazing Tips to Create One
- Dropshipping Startup Checklist: 10 Things to Do Before Starting