Ok, let me guess, you’ve watched some YouTube videos on Drop Shipping…50k in a week on setting up the Shopify store!
2.5 Million within 1 month on Shopify!
I’m sorry to break the bubble, and excuse my french…but it’s bollucks.
I bet they’re piping on about AliExpress too?
The reality is this. These ‘Gurus’ are making money OFF YOU, NOT their stores.
Understand this, if you’re seeing $50k numbers within the first week…with a profit margin of around 15%, they would be forking out around $35k upfront for the products.
If you’re new to Shopify, well you don’t receive the funds immediately through Stripe (unless you take only PayPal payments)…therefore you cannot ‘dropship’ with the customers money.
This is not a zero-sum business...YOU NEED MONEY UP FRONT!
Apologies, that’s the reality out the way…let’s press on.
What should you be Drop Shipping?
Yes, it’s true, I did use AliExpress and I’m not completely against it but there is a few things you need to understand before going ahead.
The issue I see is the confusion around what Drop Shipping actually is.
Drop Shipping isn’t unique to Shopify, nor Ali Express. Drop Shipping is the business model of product arbitrage.
Buying a product from a website and charging someone else a higher cost. It’s called being a middleman.
This can be done with ANY website. You could sell the promise of Ikea furniture for double the price, then go ahead and buy straight from Ikea and get them to send to the customer, while you pocket the difference.
Now you understand what Drop Shipping actually is, I hope you realise you can literally use any supplier.
AliExpress is an easy option, it interfaces in with software such as Oberlo and it’s ‘cheaper’…but don’t underestimate these cheaper costs inevitably costing on your business.
Why is Ali Express, not so great? Let’s go through some of the negatives…
Even the quickest shipping method takes between 10-40 days to arrive to your customer. Want to build a SUSTAINABLE business? In the long run this waiting period is not going to suffice, you will lack repeat customers, which is integral to any business and you’ll be dealing with a hell-of-alot of customer queries and complaints!
Communication isn’t the greatest, therefore handling returns or being able to just pick up the phone and deal with someone is very hard.
Quality is not assured!
Customs can cause issues and your customer may never receive their product!
In general, when dealing with AliExpress you always have that nagging feeling in the back of your head like…”is this actually morally right”.
What do I advise?
Seek out a supplier close to your native home! What I mean by this is if you live in England, source a UK supplier or at best a European supplier that has a European fulfilment centre.
Believe it or not, a lot of suppliers provide drop shipping. This should be the ‘mature’ level of business you should be aspiring to.
Unfortunately there isn’t any slick interface like Oberlo that streamlines the order process, suppliers will mostly be manual process of ordering.
However some do take CSV’s (Spreadsheets downloadable by Shopify of your orders) and will take a bulk order payment. Add this into your processing time and you only have to deal with this job once a week!
The benefit of using national or close-to-home suppliers is the customer experience is increased ten-fold, but also delivery is far quicker, quality is much higher and any returns can be easily handled nationally - rather trying to deal with overseas shipping and determining whether the Chinese factory received the return.
Sending a return to China, you are trusting the supplier of their word whether they have or haven’t received your return. In most cases, they will deny to keep their expenses low and there is nothing you can do otherwise…besides jump on a plane to China!
The point I’m making is, it pays to do your research.
Determine your niche, then find forums and national directories of suppliers around the products you want to sell. Just keep following the rabbit hole!
I’m not saying do not use AliExpress though! Just in moderation haha. It’s ok to have some products, but you need to make sure the return probability is very low and also communicate clearly delivery times and everything else that goes with AliExpress to your customer. Trust me, you’ll feel like a better human for it.