Aliexpress Dropshipping: Pros & Cons

Aliexpress Dropshipping

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 one of the fastest growing ecommerce platforms for users outside of China.

Unlike its sister platform Taobao, which focuses primarily on the Chinese domestic market, Aliexpress caters more so 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

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Aliexpress acts as a marketplace for sellers, consumers, and resellers. Resellers use this site to list products from Aliexpress sellers to their own websites. In this way, each product that the reseller lists on their own website is marked up by a percentage of 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 services – 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 are 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 have 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.

Wide Product Selection

AliExpress dropshipping offers access to a vast range of products from numerous suppliers, allowing dropshippers to easily find products that suit their niche or target market.

No Inventory Management

AliExpress dropshipping eliminates the need for inventory management, storage, and fulfillment. Dropshippers can focus on marketing and sales, while suppliers handle inventory and shipping logistics.

International Shipping

AliExpress suppliers often offer international shipping, allowing dropshippers to reach customers worldwide. This expands the potential customer base and market reach for dropshipping businesses.

Flexible Pricing

Dropshippers can set their own prices for products sourced from AliExpress, allowing for flexibility in pricing strategies and the potential for higher profit margins.

Disadvantages of Dropshipping from Aliexpress

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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 of 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 in 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.

Limited Branding Opportunities

With AliExpress dropshipping, it’s challenging to establish a strong brand identity since products often come with generic packaging and branding. This can make it difficult to differentiate your store from competitors and build customer loyalty.

High Competition

AliExpress dropshipping is a popular model, resulting in high competition among sellers. With countless other sellers offering similar products at competitive prices, it can be challenging to stand out and attract customers to your store.

Communication Challenges

Communication with AliExpress suppliers, many of whom are based in China, can be challenging due to language barriers and time zone differences. This can lead to delays in responses, misunderstandings, and difficulties in resolving issues related to orders or product quality.

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 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.

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