If you've just gotten into dropshipping, you've most likely learned that many dropshippers will opt to do so from China. This article will discuss why people dropship from China, go through a few pros and cons, and even give you a few pointers to start doing so.
Not sure what dropshipping is yet? Feel free to check out our introduction to dropshipping.
Why dropship from China?
The main reason is profitability; products sold in China are incredibly cheap due to their low production costs.
In addition, people dropshipping from China is so common that the two largest ecommerce platforms, Shopify and WooCommerce, have great automation applications that integrate with Chinese sales platforms, such as AliExpress.
These apps help you import products and their images directly to your store in a matter of just a few clicks.
One of the major perks of doing business with Chinese companies is that they will rarely turn away business and usually facilitate dropshipping.
Additionally, AliExpress also has a free dedicated platform for dropshippers called the AliExpress Dropshipping Center, where you can look for hot, up-and-coming products.
The Pros of Dropshipping from China
So, now that you know why thousands of dropshippers are turning to China to source their products, let's look at a few pros and cons.
1. Low costing products
This is the main reason why many dropshippers choose to do so from China. The product cost is far cheaper than anywhere in the western world. This is largely due to China's cheap labor costs and their access to an abundance of resources.
You can often find products, such as the above, listed for almost half of the price from a supplier in China than Amazon.
The reason for this is you are buying further up the supply chain when buying from China. So it's very likely that the product from this Amazon retailer had passed hands several times before it got to them.
2. Very little capital needed
This one is more for dropshipping in general, but it still is one of the largest benefits of dropshipping.
Very little capital is needed to get started as you will be only paying for products once a customer has purchased them from you. All you essentially have to worry about is paying for hosting and advertising, should you have very little disposable income to start with.
Check out my monthly, three-part blog on a €300 Dropship Experience; you will be surprised how little money is needed to get started.
3. You don't hold inventory
That's right; you don't hold any inventory as your suppliers are shipping directly to your customers. You are simply the middle person when dropshipping.
Not holding inventory is a great benefit for those wanting to test the waters, so to speak.
This is because, as with many businesses, when starting up, there's a high chance it just may not work out. What could be worse than holding $1,000's in inventory that you have never sold?
4. Little financial risk
You will not be holding any inventory, nor will you pay rent, wages, and numerous other annoying overheads that the typical business would.
However, it's also quite easy to budget yourself into a 3-month trial run with a new dropshipping idea, run a few ads, and even learn a little along the way.
When dropshipping from China, most suppliers will only need you to pay for a product before they ship it to your customer, and with AliExpress, there is no minimum order quantity (MOQ).
Of course, if you start selling lots of products, you can move further up the supply chain for a better cost per unit; however, this requires a commitment to a MOQ.
Also, if you don't have a Shopify store yet (the world-leading ecommerce platform), sign up by clicking this link to get a free 3-day trial + pay $1/month for the first 3 months.
5. Incredible scalability
The worst thing that could happen to a dropshipper is not being able to land any sales. However, the second-worst thing would be getting the sales and then running out of inventory when peaking.
A great benefit to dropshipping from China is the incredible scalability. The sheer amount of inventory your suppliers will have access to is almost without limit.
Your supplier may not necessarily be the manufacturer, but this doesn't mean that they won't be able to get hold of more inventory fairly quickly in the unlikely event of them running out.
The Cons of Dropshipping from China
It would be biased if we didn't also look at the drawbacks of dropshipping from China, and believe me, when things go wrong, they can go very wrong.
1. Slow delivery times
This is by far the biggest obstacle for dropshippers; delivery times can be a real stone in your shoe. Delivering a product from China to most western countries is always going to be a great feat.
Furthermore, both the global pandemic and changes in US trade agreements with China put dropshippers in a tough place last year for delivery times.
Combined, these challenges just about killed off the favored choice of shipment, ePacket, by bringing both the cost of the shipment and delivery times up.
We also have an article on this matter: Can You Still Use ePacket for Dropshipping in 2023?
2. Poor quality products
Chinese-made products get a bad rap largely due to retailers fixating on the bottom line and not necessarily on the product quality.
Yes, you can easily find inferior quality Chinese-made products online, and the low cost can seem attractive at face value, but it will cost you dearly on returns.
Wondering how to deal with returns when dropshipping from China? Then don't forget to check out our other article here as well!
The solution to this is simple: always ask for samples first, and then you can start dropshipping using your chosen supplier.
It's also good practice to order the same product occasionally to spot-check them for consistency as some suppliers can try the old bait and switch.
3. A lot of competition
If you think that you may have just found the ‘winning' product, likely, you're already too late to the party. This is because the dropshipping business is ultra-competitive.
If you are the first or one of them, it won't be too long before the competitors come along, undercut your sale price, and drive up the Cost-Per-Click (CPC) on advertising.
In another article, we learned that the number of users on Shopify, the most favored platform for dropshipping, surged over the last few years.
Last year, especially due to COVID-19, many people were looking for extra income.
There's very little that you can do about competitors other than being better than them. So offer faster delivery, better prices, or cooler branding – whatever it is, try to stand out.
4. Counterfeit products
Products made and sold from China can be quite problematic with counterfeits, requiring quite an attention to detail.
Some are less obvious, which is another reason to be ordering samples before you start selling them to your customers. This really is the only line of defense you have against this type of problem.
5. Copyright issues
This problem partially folds into the prior but can also be a separate problem of its own.
I personally ran into this issue when dropshipping reusable coffee pods; some models were patented in the biggest country in the world for ecommerce, the US. This ultimately cornered me into a small market in the EU.
My suppliers didn't mention this; either they didn't care or didn't know. I suspect it was the latter. This is because China has near non-existent copyright laws. In this case, I should have done my due diligence.
As a retailer operating within a country that adheres to copyright laws, you also must. If it falls into a legal grey area, seek legal advice before starting.
Who are the top dropshipping suppliers from China?
Now that we've gone through the pros and cons, let's also look at China's most popular dropshipping suppliers.
And yes, before you're wondering, you can also do dropshipping with suppliers outside China.
If you've just started learning about dropshipping, it's very likely that you've already come across this supplier. Many dropshipping tutorials use AliExpress as an example; the reason for this is AliExpress is very well suited for dropshipping.
With AliExpress, you have a choice of millions of products and thousands of suppliers. A large degree of these suppliers will facilitate dropshipping. However, it's good practice not to assume all suppliers do, so check first!
Logistically, AliExpress standard shipping is one of the best and is progressively getting better. This has become the perfect alternative to the ePacket shipping method, which has really struggled over the last year.
Alibaba can be looked at as the ‘big brother' to AliExpress, a retail branch to the Alibaba umbrella.
The main difference between the two is Alibaba is more suited for businesses as opposed to individuals. (For a more detailed comparison, check out our other article here.)
Consequently, you will find better prices on Alibaba than on AliExpress.
Even fewer Alibaba suppliers will facilitate dropshipping than on AliExpress, so always ask them first and foremost.
As mentioned earlier, these suppliers will likely have a minimum order quantity (MOQ). These MOQ's can be negotiated down, and most suppliers are very supportive of newer businesses.
If you're interested in learning more about how to dropship with Alibaba, then check out this great article here.
Plus, there's also an Alibaba Dropshipping Center now!
This platform is designed exclusively for dropshippers and costs nothing to use.
CJdropshipping is a platform integrated with product sourcing, order processing, and shipping fulfillment. This means that once you add your product to your store, the rest is pretty much automated.
Whilst AliExpress has over 100 million products listed, CJdropshipping currently only has around 400 thousand, meaning finding ultra-niche products may be difficult on this platform.
What CJdropshipping lacks in choice makes up for in logistics. They now have warehouses dotted all over the world and are shipping more locally. When shipping to the US, for example, the shipping offered is UPS, which will only take 2-3 days.
Finally, CJdropshipping offers amazing integration into your favorite ecommerce platforms such as Shopify and WooCommerce.
For more information about CJdropshipping, check out this article here.
Here we have another platform built for dropshippers. Zendrop offers similar levels of choice and integration to that of CJdropshipping.
Besides China, Zendrop only has warehouses in the US, which isn't a huge problem if that's where your customers are. They also claim to be able to ship to your customers outside of the US within 14 days.
They also facilitate customized packaging and branding; however, this is part of their Pro plan, which will set you back $49 a month. Additionally, you will need the Pro plan once you pass 50 orders a month with them.
Banggood is quite similar to AliExpress; even their website has a very similar feel. The difference between the two is that Bangood is one company rather than numerous retailers.
This means their customer service is naturally much better than AliExpress, which will typically have you wait up to 90 days before they refund you on a lost order. It also promotes consistency in shipping as you are not using numerous suppliers using varied shipping methods.
The drawback to using Banggood is that they don't have nearly as much choice as the other platforms mentioned; this is because one company cannot hold that much inventory.
If you're interested in dropshipping with Banggood, then take a look at AutoDS.
Tip: Want to see more Chinese dropshipping suppliers that have fast shipping? Check out this article here with a great list!
Pointers to get started with dropshipping from China
So, let's now go through a few points before you get started with dropshipping from China.
Choosing your suppliers
Speaking to suppliers first is very important; this is your first line of defense in sorting the good from the bad.
Ask questions, and then ask some more; if you don't understand their response, ask again. Language barriers can be problematic, to be frank.
If you don't understand the supplier the second time, this will likely be a persistent problem if you choose them.
If it sounds too good to be true, then it probably is. Some suppliers will tell you exactly what you want to hear just to get you through the door. There's also nothing wrong with asking them to verify such claims.
As mentioned before, if your supplier claims to be able to get the orders to your customers way faster than the others, they should expect to back up such claims.
Asking them for tracking numbers on recent deliveries to selected countries is a good way to verify this; this is not an unusual request. It's also worth finding out how the supplier will handle late deliveries at this time.
Once you are satisfied with the timeframes, you can then write this into your shipping policy.
Buy samples first
All of the suppliers, even those with a MOQ, should provide samples. Perhaps not for free, but samples should always be factored into your start-up costs.
This allows you to ensure the product is both of good quality and delivered in a timely fashion. What is also important is the state of the packaging and the quality of any branding that you may have paid extra for.
As you are not holding or shipping the product yourself, you are gauging your customers' overall experience should they buy from you.
Handling the automation
Many of the mentioned suppliers handle this part beautifully, either with their own application or a plugin to connect to your ecommerce platform with relative ease.
Most of these applications will import the product and images to your store in a matter of just a few clicks. Once an order has been placed, you can then fulfill this order using the same application.
An additional perk is these apps will typically link the tracking numbers once shipped by the supplier.
For more information on how to connect your supplier to your online store, check out this article here!
Once you have got your sample product, try it out yourself and have a friend do it also. You should now know your product well enough to write your own product descriptions.
Product descriptions should be clear, concise, and engaging. It would be best if you also avoided bullet-pointing the specifications like so many dropshippers do. What problem does your product provide a solution for?
Whatever you do, NEVER import the product description from your suppliers' product page. These are poorly worded and riddled with spelling mistakes; you really don't want this in your store.
Firstly, having an order tracking page will reduce the number of queries you get dramatically.
When customers do reach out to you, try your best to reply promptly. As your competitors may well be selling the same products as yourself, make sure your level of customer service sets you apart.
As shown above, more than half of customers who have had a poor customer service experience will tell their friends and family about it. In the long term, this can be detrimental to the business as a bad reputation is hard to shake off.
For more information on providing great customer service when dropshipping, check out this complete guide here.
This can also come under customer service, but it also deserves a mention. Do not lead your customer down the garden path by misleading them on product or delivery times.
Customers may get annoyed after waiting a couple of weeks for their order, and they may demand a refund at this point.
This type of situation can be avoided by being transparent from the get-go.
Covering yourself legally
Once your ecommerce store is up and running, you should consider your legal obligations.
An example for considering this is if you sell a product that can harm the customer. Then, should they decide to take legal action, they can come after you personally if you haven't formed a business to limit your liability.
Some countries/states may have different trade laws that may not require you to form a business to trade; however, this doesn't mean that you shouldn't think about doing so.
We have two great guides to get you started, but if you're in doubt, always seek legal counsel!
- Dropshipping Taxes: Everything You Need to Know as Beginner
- 6 Tips to Not Get Sued When Dropshipping in 2023 (Must Read)
Scaling your dropshipping store
If you are in the fortunate position of getting several sales on your new ecommerce store when dropshipping from China, then the next obvious step is scaling your store's growth.
Scaling your store is where dropshipping from China truly shines. As mentioned earlier, you have an almost limitless amount of inventory at your disposal, and your suppliers will normally have quick access to a great deal more if needed.
Naturally, logistics will become more problematic as you start shipping more. As late deliveries are always expected when dropshipping, you should expect to see more if you don't adjust your methods.
Scaling your shipping/fulfillment methods along with your sales should be your next natural progression. This can either be negotiated with your supplier, or you can have a dropshipping agent handle this for you, for a cost, of course.
So, is dropshipping from China for you?
In this article, we have looked at why so many dropshippers prefer to do so from China; we also looked at the pros and cons of doing so.
We also went through the most popular Chinese dropshipper suppliers and what sets them apart from one another.
Fun fact: Did you know that you can dropship the other way around as well? This is called reverse dropshipping. You can learn more about this here!
As with dropshipping in general, it comes with its risks.
This risk is increased when dropshipping from China due to long delivery times, poor quality products, and a language barrier with the suppliers. This could indeed spell trouble if not managed correctly.
Fortunately for you, we looked at numerous ways of preempting and handling each of these problems. As a result, you can now enjoy low-cost products, ease of access to a market, with minimal financial risks.
So, go ahead and tell us in the comments, is dropshipping from China for you?
How do you get started with dropshipping in 2023?
If, after reading this article, you're ready to start dropshipping, then I have a great article for you below!
Keep in mind that you don't need to be dropshipping from China if you're not interested in that anymore after reading this article; you can also do dropshipping with suppliers outside China.
So, if you're ready, check out this step-by-step dropshipping guide by clicking here or below:
Good luck with everything!