Starting Dropshipping with AliExpress

There are some questions that I am asked regularly, so I decided to create some kind of FAQ about dropshipping with AliExpress and post it here.

1. First, what exactly is drop shipping?
Drop ship, “pack and ship”, “direct fulfillment” – they all mean the same thing. A supplier will ship the item to your customer for you, and you never have to handle the product. Drop shipping allows the reseller to focus on marketing the business and eliminate the hassle, time, and cost of dealing with the actual products they are selling.

AliExpress dropshipping works the same way as the traditional dropshipping business model. You copy the product from AliExpress to your own store, set your own prices/markups, and after you sell a product, you purchase it from AliExpress and have it shipped directly to your customer.

2. How exactly does the buying and selling process work?
Once you have your website up and running and filled with products from your chosen suppliers, it is time for business. When a customer buys a product from you, you will accept payment for the product for your retail price and shipping costs. Once you have received the funds, you place the order directly with the seller from AliExpress.com. This is typically a usual online order at AliExpress.com. The seller will then charge you for the cost of the item and ship the item directly to your buyer. That’s it! You have just sold an item at your set retail price and processed the order for your customer.

3. Why should I decide to go with my own site instead of using eBay and Amazon?
When you have your own webstore you are not sticked to any rules and requirements of other marketplaces. Besides owing your site gives you more opportunities for promotion and marketing strategies. Furthermore, building your own site is a wise investment, because you can easily sell this business one day. Such established dropshipping websites are always a very marketable product.

Here is an example of a site that I sold on Flippa: https://flippa.com/5838845-goprostuffmarket-com

4. What kind of profit margins are there with dropshipping?
It much depends on what kind of products you are selling. It’s often a good idea to stick to low price with a high margin potential. Such products usually cost within a $1-$20 price range and these products generally can be priced at $20-$50 or more.

I recommend having a profit margin of 40%-70%. You can also try this formula that works well for my own Dropshipping projects:

$0<Supplier Price<$1=Your Price: $7.95

$2<Supplier Price<$5=Your Price: $9.95

$5<Supplier Price<$30=Your Price: Supplier Price x 2

$30<Supplier Price<$50=Your Price: Supplier Price x 1.75

$50<Supplier Price<$100=Your Price: Supplier Price x 1.5

Supplier Price>$100=Your Price: Supplier Price x 1.35

5. I am concerned about the long shipping times from AliExpress
There were complaints about AliExpress regarding its delivery time before. But it should be noted that AliExpress has improved delivery time for the last year seriously and continue working on this signing agreements with major local and international postal service companies, including in US. Besides you can always use the strategy of selling not very expensive products and with free shipping option only (there are loads of such products at AliExpress). In this case customers are more willing to wait longer.

ePacket delivery:

When possible, try to only resell products that offer ePacket shipping that’s free or very cheap. Because a majority of products on AliExpress come from China or Hong Kong, ePacket delivery is not only the most economical, but one of the quickest for small goods to get to the United States, as well as other countries.

y7WGCGQ.png


6. When my customer receives the package, does it have any reciepts or AliExpress signs?
Sometimes sellers from AliExpress include their business cards in the package. Anyway you can always send a comment with your order asking your seller not to include anything. The sellers on AliExpress have a clear idea about a dropshipping business model and will be happy to assist you. As for other signs on packages like price, address, etc. I have never got any complaints from my customers. So, I think there is nothing to worry here.

7. How will I handle refunds?
AliExpress has a good protection system with full money back guarantee. So, if your customer is not satisfied with a product and asking for refund you should dispute the purchase with AliExpress seller. If you are selling not expensive products your AliExpress suppliers usually refund you quickly without having to return the items because they don’t want the headache of disputes and receiving returns for relatively low value items. This enables you to give a full or partial refund to your customer through PayPal without them having returns either. The reputation of the wholesaler is rather exposed and they are willing to do anything to maintain their feedback rating.
 


Once again your have killed it Mike . This is clear, simple and great explanation which helps to clarify aspects of dropshipping that can be confusing at times.

I do have 2 questions for you and would appreciate your comments -
1) Does ePacket provides any kind of tracking so that I would know when the item was delivered and received by the customer? I doubt that there would be tracking id, specially when the item is being shipped from Asia, but I want to know your take on it.
2) Once I know that product(s) is/are selling well, then wouldn't it be a good idea to get the product(s) shipped (in bulk like 50/100/whatever number) to myself and then ship them to the customers from there on. I understand this is going completely against the dropship model (which is not to hold any inventory) but I'm wondering at what stage switching to self-fulfillment would be more effective.

Thanks again for all the rocking stuff you share Mike.
 
sharpalien said:
Once again your have killed it Mike . This is clear, simple and great explanation which helps to clarify aspects of dropshipping that can be confusing at times.

I do have 2 questions for you and would appreciate your comments -
1) Does ePacket provides any kind of tracking so that I would know when the item was delivered and received by the customer? I doubt that there would be tracking id, specially when the item is being shipped from Asia, but I want to know your take on it.
2) Once I know that product(s) is/are selling well, then wouldn't it be a good idea to get the product(s) shipped (in bulk like 50/100/whatever number) to myself and then ship them to the customers from there on. I understand this is going completely against the dropship model (which is not to hold any inventory) but I'm wondering at what stage switching to self-fulfillment would be more effective.

Thanks again for all the rocking stuff you share Mike.
Click to expand...

I am quick to answer your questions!

1. e-packet is a really good shipping service and always provides tracking information.

2. That's a good idea and I would also prefer this way but I think you need successfully run your dropshipping business at least one year before switching to your own stock. You need to feel confident with your traffic sources and best-selling list of products.
 
MikeAus said:
I am quick to answer your questions!

1. e-packet is a really good shipping service and always provides tracking information.

2. That's a good idea and I would also prefer this way but I think you need successfully run your dropshipping business at least one year before switching to your own stock. You need to feel confident with your traffic sources and best-selling list of products.
Click to expand...
Mike you are right, it makes sense to dropship for sometime before I start self-stocking.

I have done some research (based on the approach you suggested) and have narrowed it down to 3 products that I want to dropship. Now I want to reach out to suppliers on AliExpress. What are the things that I should pay attention to when I reach out these suppliers and how do I communicate with the in terms of "choice of words" to weed out the not so good ones? I'm currently using the following strategy to narrow down the supplier list to connect with -

1) should have at least a dozen or more feedbacks,
2) feedback score of 4 diamonds and up - this one is confusing and probably not a very reliable marker because a supplier can have a high score in 15000+ with 4 diamonds even though they have sold 4-5 items
3) must be top-rated seller - I couldn't find anything about what it means to be a top-rated seller
4) should ship via ePacket (there is no easy way to filter for this option and I've to check each and every supplier, there should be a adv filter for shipping I think) - any tips for how to do this?

Mike I would very much appreciate any suggestions and tips, at your convenience. Also can't wait to hear the news for the plugin launch.

Thanks.
 
sharpalien said:
Mike you are right, it makes sense to dropship for sometime before I start self-stocking.

I have done some research (based on the approach you suggested) and have narrowed it down to 3 products that I want to dropship. Now I want to reach out to suppliers on AliExpress. What are the things that I should pay attention to when I reach out these suppliers and how do I communicate with the in terms of "choice of words" to weed out the not so good ones? I'm currently using the following strategy to narrow down the supplier list to connect with -

1) should have at least a dozen or more feedbacks,
2) feedback score of 4 diamonds and up - this one is confusing and probably not a very reliable marker because a supplier can have a high score in 15000+ with 4 diamonds even though they have sold 4-5 items
3) must be top-rated seller - I couldn't find anything about what it means to be a top-rated seller
4) should ship via ePacket (there is no easy way to filter for this option and I've to check each and every supplier, there should be a adv filter for shipping I think) - any tips for how to do this?

Mike I would very much appreciate any suggestions and tips, at your convenience. Also can't wait to hear the news for the plugin launch.

Thanks.
Click to expand...

Actually I am sticking to the same strategy choosing suppliers focusing mostly on the purchase volume for the last month and customer reviews for the product.
 
MikeAus, I have to say I'm pretty impressed with the journey thread that you've created.

It's a nice breakdown of what you've been working on and you've also been sharing tips along the way for other people looking to try something similar.

I'm curious, it looks like you invested a fair amount of time into this project, have you calculated out roughly how much money you'll have to make to break even in terms of labor?
 
A Cop said:
MikeAus, I have to say I'm pretty impressed with the journey thread that you've created.

It's a nice breakdown of what you've been working on and you've also been sharing tips along the way for other people looking to try something similar.

I'm curious, it looks like you invested a fair amount of time into this project, have you calculated out roughly how much money you'll have to make to break even in terms of labor?
Click to expand...

Actually, I have already got a good return with my own dropshipping sites (around $8000 per month) and with developing such stores for others.
 
BETA-TESTERS NEEDED

The development process is finally coming to the end, however there are still some things to be fixed and improved. And I would like to ask for your help. I need some beta-testers to test the Plugin and give a feedback.

Main requirements:

- You need to have a domain name and hosting. (The Plugin works with built-in themes only, so you need a blank domain).

- Your hosting provider must support PHP 5.6 and Zend Loader.

- You should have experience working with WordPress.

What you get (FREE):

- Plugin
- Theme
- Your personal license key (valid for one domain)
- Help with installation and full support
- Future Plugin updates

If you are interested in beta-testing, please pm me!
 
Having a phone number on your site does bring peace of mind to your consumers and people you do business with. It gives your visitors more trust and removes any fear they may have before a purchase.

Even if you don’t want to answer calls and speak with your clients, we recommend registering a Skype number with a voicemail option. In this case your customers will have a possibility to see and call a real number and leave messages that you can get directly on your email.

1. Sign in to your Skype account. Select Skype Number in the Manage features section and click Get a Skype Number.

TYexQOL.png


2. Select a country and location (city/state) this phone number will belong to. For example, if the majority of your clients are from US, then there is a sense to get a US number. Then choose one of the numbers available and make a purchase. The cost of a Skype Number subscription varies depending on which country you want the Skype Number for and how long the subscription lasts (3 or 12 months).

3. Go to Voice Messages in the Manage features section and Enable voice messaging. Activate email Alerts and set your email address to get voice message.

KKHmsTe.png


4. Finally go to Skype Preferences -> Calls. Set Incoming Calls to Send to voice message.

skype3.png


Here you can also setup voice messaging. You can record your own one or order a professional voice-over from Fiverr.

Here is a sample script you can use:

”Thank you for calling our webstore. No one is available to answer your call right now. Please leave your contact information and we’ll get back to you as soon as possible”.
 
Finally, I have registered my own LLC (Limited Liability Company) in US to help me run my dropshipping business.

May be some information below will be useful for those who want to establish a company in US from overseas.

Why do I need it?

I think, running your dropshipping business under a US company has many advantages.

If you or your business are based not in US, you are limited with a choice of payment gateways you can use on your store. in my case I was not able to integrate Stripe, Authorize, PayU and other systems to start accepting credit cards on my sites. Actually there are many other solutions of course, but they all did not meet my needs. For example, in Russia I can easily connect local payment processors, but the problem is that according to Russian law you can show your clients only Rubbles on checkout page (not US Dollars or any other currency). So, this fact makes all these systems absolutely useless for me.

Another advantage is that you can choose any State for registration (no-sales-tax state or a state that suits your business better). And you don't need to present any documents, only information. You also don't need to be present in the U.S. to register a company. All filings can be done remotely, electronically.

Other important thing that as a foreigner you are not required to have Social Security Number to open your company and obtain EIN (company tax ID). You also don’t need to have a U.S. address or phone number, however if you like it’s possible to obtain them from specializing vendors.

How much does it cost?

I paid $634 for LLC and + $299 for U.S. Business and mailing address. It took around a month to complete everything.

What about opening US bank account?

After 9/11 and with the passing of the Patriot Act it became really hard for foreigners to open U.S. bank accounts. Only a trip to the US would present you with the best opportunity to open a bank account.

But in most cases what you need is not a bank account, but the functions provided by a traditional bank account. For this purpose you can use a reloadable prepaid debit card from companies like NetSpend, Payoneer, Payza. What you get is an internationally recognised debit card and an account number with routing and ABA numbers that you can connect to your 2checkout, Stripe, etc. accounts. As for me I successfully connected my Payoneer card to Stripe.
 
I am really satisfied with the rapid growth of my Facebook pages recently. The more subscribers you have the more fast your Facebook page is growing and that's cool!

Foe example, look at my Harry Potter page.

almost +30K fans in July!

bKFmeub.png
 
This month I have a new leader in my collection! HokageStore.com

Almost $1500 of net profit after the first week of this month (a bit more than WorldofHarry). However, i spent $89 on Instagram shoutouts.

btw I found a group in Instagram that has 2mln. subscribers and the owner of it allows shoutouts for $180. It seemed expensive to me but after I realised that it is only $9 for 100,000 I found it as a good deal. I will try it soon and let you know about my results.
 
 
Great thread! Thanks a lot. I run a brick and mortar business with employees and I have quite a few hours of free time in my office each day. I've been kicking around starting some kind of e-commerce play and this post has given me the ammo to really get going.
 
i ve checked your website and it is really cool! Harry Potter items in one place- all you can dream about! love it. if you need your site monetization- please PM me :) thank you
 
Here is a simple instruction about how to negotiate with Instagram group owners about launching Instagram Shoutouts for your dropshipping webstore.

Once you have selected the preferred accounts (the more the better) where you want to launch Shoutouts with your ads, you need to contact the owners of these accounts through Instagram Direct. Please note that unfortunately this function is not available on PC – on Instagram you can only send direct messages from your mobile phone or tablet.

Log in to your Instagram account and search for the chosen accounts using the search bar, then simply proceed to contact the owners of these accounts.

Step 1: Acquaintance

You: Hello! My name is ….. Your account is really great! I would like to ask if you are interested in paid shoutouts on your account? In case you are, please contact me via private message or through e-mail myaddress@gmail.com to discuss details. I can create shoutouts for you on my account as well. Thank you in advance!

Account Owner: Hello! Shoutout is $25. Shoutout is live for 24 hours.

Step 2: PayPal account and posting time

You: Please send me your PayPal account details so that I can make payment. What time is it now in your country?

Account Owner: My PayPal is ……@gmail.com. It’s 4.13 am now. I only accept payments as friends/family because of the PayPal fees. Please send money as a friend or family if you want to start the shoutout.

*NOTE: The question about time zone is relevant because you will probably target customers living in some specific region, so the timing will matter. To check time zones, you can use this time converter: EST to UTC Converter - Convert Eastern Time to Universal Time - World Time Buddy. You can choose the most convenient time for you and ask an account owner about the opportunity of posting at this exact time. Besides, you can also ask the account owner about their professional opinion on the most suitable time for posting. They usually track the subscribers’ activity in their accounts and can give you good recommendations. It is also important to ask an account owner not to post anything after your shoutout in next 7-8 hours.

You: Could you start the shoutout today at 1pm EDT?

Account owner: Yes, I can.

You: Great! I will send you money and information in the next 30 minutes.

Step 3: Sending money and information

You: I’ve sent you the payment. Could you check it please? Post this information at 2 pm EDT.

*NOTE: It’s better to send a print screen of your payment. It will help the account owner to check information quickly.

You: [Image]

33.png


You: [Caption]

Stainless Steel Fried Egg Mold for only $9.99 (FREE shipping worldwide!) Isn’t it cool? Check out @ksort_kitchen or Ksort.com for more deals like that!

*NOTE: You can also ask an account owner to place a link to your product in his profile BIO.

You: Please post the link in your bio: Egg Yolk Separator (Egg Divider) - free shipping worldwide Tag me on the photo when you post. Thank you!

Step 4. Checking

Account owner: Ok! I’ve got the payment. I will post at 2 pm EDT. Thank you.

*NOTE: Check your Shoutout right after posting. If the account owner did not tag you in the photo or wrote something wrong, you can ask him or her to make the necessary changes.

Regarding the price for a shoutout I would recommend paying around $10 per 100,000 subscribers for one Shoutout (for example, if a group has 300,000 followers, a $30 price for one Shoutout is fine). You can pay more or less of course, but in general you can stick to this amount.

To learn more about Instagram shoutout strategies, check this article: https://alidropship.com/how-to-increase-drophipping-stores-sales-with-instagram-shoutouts/
 
You must log in or register to reply here.
Top Bottom
Back