Ecommerce Business Models are a broad topic, but I am going to do my best…
In this article, I tackle all you need to know on how Dropshipping Works For Dummies and Wholesalers. Starting an eCommerce business from scratch and without the hassles of such things as packaging and shipping commodities and tracking an inventory may sound like a novelty.
As a matter of fact, many may view the very same idea of running a thriving online store without setting up a warehouse space as a far-fetched idea. I mean, that’s what the entire modern-day drop shipping business entails, though it must include AliExpress and Oberlo software!
With drop shipping, shrewd store owners sell and drop ship items to different clients without practically touching them. Basically, you as the Shopify store owner market someone else’s product without having to buy it in the first place. And once the buyer expresses interest in it and eventually makes a purchase, you only buy it before organizing that it is shipped straight to them.
It can be a boon to internet entrepreneurs, especially when you choose a lucrative niche on AliExpress. In a nutshell, you will not have to create an inventory, set up a warehouse, and physically deal with anything practical like repackaging it and anything else. On the downside, such aspects as returns and refunds serve a huge detriment. That’s why you ought to understand everything before marshaling your entire arsenal into the business of drop shipping.
A Brief History of Drop Shipping
Drop shipping may sound like one of those newly invented business ideas, but it isn’t. Zappos used to drop ship consumer products back in 1999 before Amazon and Sears joined in and helped popularize the whole art. Today, up to 33% of the entire e-commerce sector depends on drop shipping as its primary inventory management technique.
At the moment, perhaps the largest player in drop shipping is AliExpress, and that’s because its fame is due to the rise of many cheaper Chinese exports entering the US.
Thousands of Chinese suppliers take advantage of the whole idea to sell their assortment in the western world. However, do understand that you aren’t restricted to using AliExpress for drop shipping only.
But to make everything clear regarding how drop shipping happens, let’s look at the whole thing in a broader perspective.
Alibaba and AliExpress
Though drop shipping has been around since it is AliExpress that significantly contributed to its prominence. It results from the founder of Alibaba, Jack Ma, who wanted to create a perfect platform where the western world could buy items from China. It works pretty much like Amazon, only that it is based in China. It’s worth mentioning that neither Alibaba nor AliExpress holds inventory as they are reputable marketplaces.
How AliExpress Works
There’s not much difference between how traditional drop shipping is done and how AliExpress conducts it. With a Shopify store and Oberlo software, you can start your business today and make profits without virtually paying a thing. All you will do is identify the right products through this comprehensive guide to drop shipping.
The process is a bit intricate as highlighted by the Definitive Guide to AliExpress Drop Shipping to A Shopify Site but comes with multiple advantages. On the customer’s side, drop shipping has no different from the quintessential online retail transactions. The only difference is the inclusion of you, as an independent store manager, who ensures that the process is seamless and the buyer gets the superior quality and legitimate products with ease.
It is a 3-step process that starts with the customer placing an order and you, the seller organizing that the item is shipped. Once you get a buyer and sell an item from your Shopify store, you go right ahead and buy it from the AliExpress marketplace. The seller will supply it directly and without involving you in any way.
Why Choose AliExpress and not the regular drop shipping alternatives
AliExpress, as aforementioned, is a Chinese platform that aims at channeling cheaper and high-quality products to the western world. It is perhaps the largest in the region and continues to grow, although it doesn’t mean it is the only marketplace.
- All transactions are protected and certified as safe
Drop shipping via AliExpress, Oberlo software and Shopify has multiple benefits. Straight off, everything is protected by AliExpress, including all purchases and shipments. So, you can never worry about such aspects as if the item will be shipped or not.
- You can be a drop shipper using AliExpress and Shopify without capital
Possibly the most fascinating thing about being a drop shipper with AliExpress and Shopify is that you can take advantage of trial periods before going on fully as a professional. Oberlo software offers a 30-day trial period while Shopify offers a 14-day trial period.
- You can add products to your store almost instantly
Without having to worry about inventory, re-stocking is breezy. That is to say; you have unlimited potential of being rich as a drop shipper using AliExpress.
- You will never have to deal with leftovers
Moreover, with no inventory, you should be happy that you will never have to deal with leftovers. Even if what you have been selling suddenly becomes outdated, you’ll be glad that it isn’t filling all the space in your warehouse. You can only imagine the amounts of losses if you had a traditional brick-and-mortar store filled with what you’ve been offering and selling!
In addition to these drop shipping advantages, AliExpress makes the whole model extremely easy to try, safe, and profitable.
- All drop shippers have complete control of their own profit margins – they are free to decide the retail prices without having to stick to the suggested retail prices.
- Armed with the right amount of drop shipping information, including having a Shopify account and Oberlo plugin, one may start drop-shipping immediately. In fact, you can start importing the items to sell without seeking the permission of the supplier.
- It is a virtually unlimited space where even newbies and those who aren’t established can enter and make a kill. Both the seasoned drop shipper and those starting up aren’t deterred from earning a key to everything is what you choose and how you market it.
- The guaranteed access to a pool of items sold at the marketplace is equally glamorous. It presents a perfect chance to only deal in what you deem lucrative for your target group.
- The main reason to go for AliExpress and not the other marketplaces isn’t that Chinese items are cheaper than those outside Asia. Suppliers in China are smart and watch the trends before manufacturing their products.
Is Drop Shipping profitable?
For someone looking to launch and manage a successful eCommerce shop, being a drop shipper shouldn’t be an enormous and overwhelming business idea. Sure, other less hectic and perhaps more profitable ideas can offer better returns in the long run. But truth be said, drop shipping via AliExpress is slowly becoming the best form of online business, especially when the store owner does the marketing part well.
When you choose to look at drop shipping on the profitability part, margins of the product and conversion rates play a huge factor. Margins are fundamentally the profits made from what the drop shipper pays for it and what the customer paid initially. Conversion rates, of course, stand for the real rates of people who paid for a product from those who merely visited the store.
Statistically speaking, a profit margin of 20% or above is acceptable, pretty much like a conversion rate that’s anything above 2%. To estimate your benefit, you should be able to use the figures from the two factors.
Besides doing brilliant marketing of the items in your Shopify store, you should be smart enough to focus on increasing the conversion rate. Product descriptions play a critical role in boosting conversion, and you shouldn’t dwell on the supplier’s descriptions. Another simple way is free shipping of the item purchased.
Onto The Nitty-Gritty Now – Common Faqs about Drop Shipping
- What makes drop shipping via AliExpress a perfect venture for budding entrepreneurs?
Drop shipping can be an incredible business for young entrepreneurs who have never engaged in any form of e-commerce before. It requires no significant sum of capital and information regarding how it runs is freely available online. Again, it is virtually risk-free and seemingly favors the young, smart and creative minds whose marketing skills appeal to their target population.
- How straightforward is the whole process of Dropshipping using AliExpress?
Quite honestly, to be a drop shipper, you don’t need any special training. It is a win-win situation given that the supplier sells the product, the buyer gets a top-quality item, and you register a profit.
That’s how simple and straightforward the whole process is. Special software like Oberlo makes the whole process a lot easy. However, you can get a better and more detailed review of Oberlo so that you understand how it works.
- Will the buyer know if the product was drop shipped?
Practically speaking, nothing will show them that the item was drop shipped. That’s because as mentioned in the Definitive Guide to AliExpress Drop Shipping to A Shopify Site, you should include a short message to the supplier. If you are making huge sales, a custom package would still come in handy
- Why should a buyer buy from my Shopify if the same item is available elsewhere?
Well, it is pretty simple – because you are better and unique!
Your uniqueness emanates from the fact that you have a better marketing plan that probably attracted the eyes of the customer. Once your store earns the trust of online shoppers, you’ll experience little difficulty explaining why you are the best go-to shop.
But as you strive to show every visitor why your store is the best to buy from, don’t dwell on petty issues such as price competition and using silly marketing gimmicks. Instead, be yourself and focus on giving the sellers a lasting solution.
- What if Alibaba shipping takes too long and customers visiting my store can’t wait?
There was a time when AliExpress made over $14 billion in sales on a single day. Of course, all the customers were not bothered by the long delivery terms. So, your primary task as a drop shipper using Oberlo is to offer the products and more importantly define your shipping policy. A customer who is comfortable with it will readily proceed to order.
Furthermore, no single AliExpress package is delivered by sea anymore, which is great news to those who used to dislike the 60-day shipping period. There’s the commonly popular ePacket delivery choice that takes between a week and two to reach the US.
Smart suppliers have gone ahead and opened warehouses in the US for quicker delivery. So, essentially, speedy deliveries are very possible. However, the best thing to do is to choose the best supplier so that you don’t bring in inconveniences.
- What about the quality of the product and copyright infringements?
You may have heard the most bizarre stories depicting Chinese goods as inferior. Unfortunately, some of the stories are true, pretty much like in every part of the world, including Europe and the US. Amazon, eBay, and all those other online marketplaces host thousands of scammers.
In the end, you should be cautious with who your drop shipping supplier is because any inferior item can damage the reputation of your Shopify store. Once again, do go through the ultimate guideline before enlisting the product for purchase in your store.
AliExpress is a reputable marketplace that advocates for sanity only. As such, some of the best ways of taming scamming suppliers is the $1,500 surety that must be deposited for the store to run. The company also takes buyer safety seriously. There’s an extensive consumer safety program that includes having thousands of employees who check each listing and ensure that it doesn’t infringe on any copyright.
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Summary on Dropshipping Works For Dummies And Wholesalers
Drop shipping depicted here is primarily founded on my experiences using AliExpress and to some extent, Oberlo software. The whole business is far from perfect, although it seemingly favors smart and energetic web entrepreneurs. To be inept at using AliExpress, one must obstinately spend time using it.
It is totally awesome in making a few bucks in the comfort of your home, especially when you understand the art of digital marketing. But despite the challenges that include getting visitors and selling, dropshipping is still beneficial. Low capital investment, little or no risks, and huge profits when everything eventually begins to roll indeed make it a worthy venture.
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