Aliexpress Dropshipping: Pros & Cons
Aliexpress is a B2C eCommerce platform linking Chinese manufacturers with international consumers that has rapidly become one of the most popular portals for use in the dropshipping industry. Since 2014, it has become a leading eCommerce platform in terms of traffic in both Brazil and Russia. Below, we will go over more about Aliexpress and the advantages and disadvantages of using the platform for your dropshipping venture.
What is Aliexpress?
Aliexpress is a subsidiary of the Alibaba Group. Launched in 2010, it has become the destination one of the fastest growing eCommerce platforms for users outside of China.
Unlike its sister platform named Taobao, which focuses primarily on the Chinese domestic market, Aliexpress caters moreso to the international market and is available in English and 15 other languages. In addition, this platform differentiates itself from the B2B platform Alibaba by selling items in smaller quantities as opposed to selling in bulk.
This makes it a popular portal for dropshippers to sell to consumers in their own respective markets.
Dropshipping from Aliexpress
Aliexpress acts as a marketplace for sellers, consumers and resellers. Resellers use this site to list products from Aliexpress sellers to their own website. In this way, each product that the reseller lists on their own website is being marked up by a percentage from the original wholesale cost. Chinese-made products hold a significant price advantage in the market, so therefore, the price markup can become a very profitable motive to source products from Aliexpress and similar marketplace platforms.
Aliexpress is not a true dropship supplier. This platform, as well as other sites such as banggood.com and focalprice.com, do what is called online retail arbitrage – in which the reseller sources a product from a publicly available website and marks up that product to sell on a different platform or sales channel. Aliexpress has hundreds of sellers that can all vary in their quality of products and service – it is a marketplace of sellers who list goods from direct suppliers to sell to consumers or other resellers. If you are looking to stay in the dropship industry for the long term, solely relying on Aliexpress dropshipping and other retail arbitrage for your business may not be the most sustainable option.
With a true dropship supplier, you are sourcing from a direct supplier without the price markup on their products. The key difference between true dropshipping and retail arbitrage, is that in true dropshipping, you have a direct business relationship with your supplier – in which you or your company would receive a discounted price on products that is otherwise not available to the general public.
Advantages of Dropshipping from Aliexpress
Buy Products For Cheap
Many of the items on Aliexpress are sold and shipped directly from China. Aliexpress sellers also have the option to provide free shipping worldwide – so you do not have to calculate the cost of shipping into the price markup of your listed product, or have it calculated during the checkout process.
This could really a positive effect on your profit margin as your cost per item is significantly more competitive than if you were to source products from other local suppliers with various shipping rates based on region.
Disadvantages of Dropshipping from Aliexpress
There are many different suppliers that sell a variety of products for competitive prices – although sometimes, these products do not match the customer’s quality and size expectations (i.e., the pictures on their store do not match those of the actual product). There is very limited information on how stores are verified on this platform. Jack Zhou, the Senior Director at Aliexpress, mentions that there are a few things you can do to ensure that the seller you source your product from is reputable and reliable:
- Check the store’s Seller Feedback for a positive rating.
- Check the Product Feedback of the specific product you are looking to purchase, and take a look at the reviews.
- Ensure that the seller offers Aliexpress Buyer Protection in the case of order disputes.
In short, you will have to do your due diligence in researching different stores through the Aliexpress platform to ensure that you are sourcing good quality products. Failure to do this could result in sourcing products that do not fit the expectations or your customer base, and therefore, can negatively impact your eCommerce business.
Much Longer Shipping Times
While some sellers on Aliexpress may provide free shipping, the turnaround time very much varies anywhere from 1 week to 30 days, or even 60 days, to have the order shipped to your customer. All products on Aliexpress are sourced and shipped from manufacturers in China.
Turnaround time for orders is truly a large factor to serving your customers through the eCommerce space, and what Aliexpress makes up in price, they certainly do not make up for in faster shipping times.
Returns or Exchanges Become a Hassle For the Buyer
Since all products on Aliexpress are sourced and shipped from China, it becomes a real hassle to return your customer’s order to the original seller. The original seller may offer a small refund for the customer to keep the product – as taking the return and shipping the product would be more costly and take too much time.
If you cannot resolve the issue directly with the seller, you could escalate the dispute by filing a claim with Aliexpress. Depending on the product, Aliexpress may be able to offer a refund.
Take Advantage, But Take Caution
Aliexpress is a great place to source products from if you have connections with reliable suppliers that sell products of good and expected quality. It is a platform that will continue to grow in the eCommerce space as more of the world embraces the price advantages that online shopping brings to consumers.
With these advantages, come disadvantages. As a reseller, you will need to take caution with which suppliers on Aliexpress that you decide to source products from. Keep in mind, that Aliexpress is also not a true dropship supplier, so there are long-term dealer specials and discounts that would not be offered for your dropshipping business through this channel. All of these factors are worth taking into account as you move forward with growing your business in the dropshipping industry.