The Difficulties and Disasters Hiding in Dropshipping through Aliexpress
A nearly zero startup cost, easy money business…what’s not to like?
A good question, and one that enticed many people to try their luck at retaining entrepreneurship. Set up a business for a few dollars a month. Take an order for an item. Have Chinese suppliers fulfill the orders and ship the item to your customers at a low rate. Electronically deposit the amount of the sale in your bank account using the Oberlo app on your smartphone. Repeat.
Sounds marvelous, doesn’t it? And, yes, there have been success stories. But there have been far more tales of woe than tales of dreamed-of financial success. And more than a few outright disasters. Because Aliexpress is an E-commerce platform with mostly Chinese sellers, and China’s manufacturing sector is massive, the hazards are everywhere.
For example, take sourcing. If there are 20 or 25 factories making an item, and only 2 are producing a quality version of it, how do you connect specifically with one of those 2 factories? Now, factor in the many third-party sellers who are selling this item by posing as factories, looking to make a quick buck with no regard to quality control. It gets tricky on Aliexpress. And fast.
This article will examine the difficulties that many entrepreneurs encountered from the very beginning when drop shipping through Aliexpress. It will also look at one big way the rules about drop shipping from China are changing for the worse. Right now, in 2019.
Common problems of Aliexpress dropshipping
Selling Chinese-made goods via dropshipping has always been rife with potential issues. Right from the start. From delivery times of 6 weeks or more to lawsuits over copyright infringement, from copycat undersellers to quality control problems, the snares and headaches were—and are—numerous. And, for many dropship business owners, they offset the advantages of Aliexpress: escrow, customer service, and tracking.
The problems that new dropship business owners selling through Aliexpress frequently found themselves dealing with from the very beginning include:
- Copycats who use software to identify hot-selling items, and undersell you;
- Lower profit margins—usually around 20%;
- Extremely long shipping times;
- Scams, including shady suppliers who claim ‘lost in transit’ but in fact never ship at all;
- Lawsuits due to poor intellectual property rights enforcement in China (this happens far more frequently than you think);
- Difficulties in finding the few reliable and/or consistent suppliers;
- Terrible or flat-out nonexistent quality control;
- Third-party sellers masquerade as factories, offer high-quality items at a premium, but fulfill with lower quality items;
- Rating headaches due to stock issues or shipping issues;
- You and your suppliers are thousands of miles apart, making oversight all but impossible.
Aliexpress does their best to provide oversight and customer support—and they do a pretty good job of it—but the nature of Chinese manufacturing and remote dropshipping means these problems aren’t going away anytime soon.
The current outlook is dark…but it reveals new, more attractive dropship options
Dropshipping using Chinese order fulfillers through Aliexpress is getting harder, there are no two ways about it. Increasing competition, the ever-present possibility of a scam, quality control issues, and an increasingly savvy Western buyer all make making a buck as an Aliexpress drop shipper a tough proposition.
Setting up a drop shipping business through Aliexpress no longer offers fledgling online retailers the attractively viable business model it once offered, either. The rising cost of ePacket shipping—which had largely sustained this business model, and made it possible for small retail business startups outside China to establish themselves with very little capital—may be sounding the death knell for drop shipping via Aliexpress.
ePacket pricing—cheap China-U.S. shipping of up to ~4.5 pounds, subsidized by the U.S. Postal Service—may soon be ending. The fact that 7-day airmail shipping from China to the United States could be accomplished for a few dollars or less has largely been the driving force of the dropship-through-Aliexpress profit potential. If the cost to ship airmail from China to the U.S. increases to rival the cost of shipping airmail from the U.S. to China, the dramatically decreased profit margin will make your dropship business model untenable, or drive you out of business altogether.
The news isn’t all bad, though. For one thing, drop shipping through Aliexpress was never as easy as it seemed to be. If it was a simple matter to set up a highly profitable drop shipping business through that E-commerce platform and move from a Toyota to a BMW in 9 months or less, there would be a lot more BMWs on the road.
For another thing, there are better ways to set up a dropshipping business, ways that will be more sustainable in the long run. One way is partnering with a company in China who specializes in keeping your business on-track and optimized.
You knew we’d get around to it, didn’t you!
What Dropship Pro does is to head off these problems, and ensure long-term business viability. We’re in it for the long haul, and we’re looking ahead to the next twenty years of business. And we want new, vibrant entrepreneurs to partner with us, so we can all grow.
What we do is simple:
- We ensure short shipping times, and positive inventory. We do this by maintaining warehouse space in the U.S., Western Europe, and Australia.
- We find the best shipping option for each order—best for speed, and best for value. We maintain relationships with many carriers.
- We ensure proper quality control, giving your businesses the consistency that builds customer loyalty.
- We select the best factories to deal with and inspect them regularly.
- We ensure that potential copyright and intellectual property rights issues are resolved ahead of time.
- We hand-pick select items for resale, taking the guesswork out of sourcing.
- And, we source for you, if you have an idea of what you think might sell, but you don’t know where to look for it.
Dropship Pro China is an exciting company for all these reasons. Contact us. Let’s talk about a better way than Aliexpress, one that will take your dropshipping business to the next level.