The Ultimate Guide to Dropshipping on Alibaba The AliExpress Way
Alibaba is without doubt the biggest online ecommerce platform for global B2B sales. It also owns Taobao and AliExpress, its retain B2C divisions, extending its reach to 240 countries and 50 million users. Alibaba is a great platform to source products in bulk from China and other countries and sell to buyers in other countries. The process does involve purchasing from a supplier, receiving the goods, storing them in your warehouse and then reselling and dispatching these items to buyers you find on Alibaba. This entails additional expenses that you can avoid simply by resorting to dropshipping.
What is dropshipping?
Let us illustrate this with an example.
Jinhua is a manufacturer/seller on Alibaba. Tradex is a seller and buyer on Alibaba. He has a customer Jimtrade who wishes to buy a certain product that Tradex can source and supply. Jimtrade places an order on Tradex and Tradex passes it on to Jinhua with instructions to pack and ship the product directly to Jimtrade. This way Tradex avoids the expenses of shipping and importing to their warehouse and then repackaging and shipping it again to Jimtrade. Tradex does not need to hold inventory. This means that Tradex must make prior agreements with Jinhua about this arrangement. Jinhua ships. You invoice Jimtrade, receive payment and make payment to Jinhua, taking your cut in the process.
Advantages of dropshipping
You register on Alibaba as a buyer and seller of products. Another way is to source products from Alibaba and then display them on Aliexpress, its retail division and enjoy benefits of dropshipping arrangements with the original manufacturer or supplier you have found on Alibaba.
(1.) When you go the dropshipping route you need not invest money in products or in warehouse facilities. You just need to be established on Alibaba and AliExpress and set up your ecommerce store here.
(2.) It is easy and costs less to get started in dropshipping rather than the regular way in which you would have to invest time, money and effort in buying and then reselling.
(3.) End buyer gets the products faster since the intermediate steps of buying, getting it shipped to your warehouse, customs clearance and then again reshipping are avoided.
(4.) You reduce the chances of damages in transit and storage.
(5.) You can buy from a tested and tried source whose products carry a warranty.
(6.) You can operate from a small office and save on overhead costs and thus be more competitive.
(7.) You are not limited by capital investment in purchase and warehousing. You can, therefore, expand sales.
There are disadvantages too in that you cannot build your own brand. It is the original seller whose brand is propagated. You also have no way of knowing about the quality of products shipped and it will become difficult to settle claims of the end buyer since you have to rely on the original seller to rectify the complaints. The original seller may charge a higher price for the product and may even charge you for shipping or miscellaneous services. There is intense competition in the dropshipping space which means your profit margins could be low. You also face the prospect of your supplier refusing to engage in dropshipping.
Rather than dropship directly through Alibaba it is better to do it through AliExpress since AliExpress allows dropshipping facilities. You can have arrangements with a seller on Alibaba and display their products on Alibaba or your own ecommerce site. You can just as well source from a seller on AliExpress, display products on your site at a higher price and get the AliExpress seller to dropship to your buyer using the AliExpress Dropshipping Center.
How to dropship through AliExpress
(1.) The first step to ecommerce sales and global business is to own your own ecommerce store. You can do this with the help of Digitalcommerce, ecommerce facilitators based in Delhi.
(2.) Next, you set up accounts at AliExpress and Alibaba. You then search and shortlist suppliers in the product category in which you wish to do business and initiate arrangements with them, with the emphasis on getting them to do dropshipping. AliExpress is a better option to get suppliers ready to dropship through AliExpress Dropship Center.
(3.) You get prices and images of products that you can then display on your own ecommerce site.
(4.) When you get an order you pass it on to the Aliexpress based supplier with instructions to dropship to the customer's address. The dropship facility helps you to deliver product shipping and tracking details to your end buyer. You receive payment from your buyer and you make payment to the dropshipper supplier on AliExpress.
(5.) Be particular about advising your supplier/shipper on Aliexpress not to include labels or invoices that carry their company name.
(6.) While shipping is always extra, it is a good idea to offer free shipping, factoring in shipping costs in your product pricing. Always use ePacket delivery option to assure fast delivery.
This, in a nutshell, is how it works. It might take time to set up arrangements. If you are not familiar with the process you can get an ecommerce expert to help you out and manage it for you.
AliExpress does offer a few options for dropshipping. In case of large consignments the preferred route is sea shipment. For small and mid size packages you may prefer air courier. One good way is to opt for AliExpress Premium shipping also known as ePacket shipping. This guarantees delivery within 30 days on a door to door basis with a tracking code.
Things to keep in mind when you dropship through AliExpress
Your buyer will expect quality products and will hold you responsible. Therefore, make sure that the product is as specified and supplies are consistent with no cause for complaints about damages, missing items or poor quality.
The best thing is to not go by price alone. Pick from a supplier whose prices are in the middle. Then, purchase a few samples of each item you are selling on your ecommerce site. This way you can evaluate the product first hand. You can also sell a few items as sample pieces to the end buyer.
Always evaluate the supplier before you commit. One way to check credentials is to check for feedbacks and ratings on AliExpress. The feedback score is an important metric. Look for a 90% or higher score. Check for how long they have been operating on AliExpress.
Avoid popular well known brand products
AliExpress is also known to have suppliers who sell counterfeit renowned brand products. It is best to avoid such items since they are most likely to be fake, especially in fashion and lifestyle products. However, in the case of mobiles and electronics you can usually expect a product to be genuine but even then there are cheap knockoffs from China. Choose niche products or products that can have least complaints since you do not want to face issues of rejections and demands for refunds/replacement. Jewelry, clothing and books are good categories.
AliExpress is great but the biggest drawback for buyers here is that sellers usually never offer refunds or replacements. You will have to make solid arrangements with your seller to address any issues related to products, refunds or replacements. You must also define your refund/replacement policy for your buyer.
It sounds easy but a lot is involved in getting established as a dropshipper. Get Digitalcommerce to assist you with everything that needs to be done to assure success.
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