AliExpress – does the name sound familiar? I’m sure it does, if you’re already into electronics accessories business or exploring about it. Besides, if you’re a gadget freak and the ultimate latest gadgets that you’re looking for aren’t available in India, then you might have researched and found them on AliExpress.
People who’re exploring new business ideas must have come across something called “dropshipping”. Go to YouTube and search for this word and you’ll find hundreds of videos teaching you how to make hundreds of Dollars by dropshipping to the US from AliExpress. There are even people showing their flashy Ferrari car and huge bunglows they could afford out of the money they earned from dropshipping business. That too from the comfort of your home, without travelling anywhere. Dropshipping means you don’t stock the items, you take the order from the customer and forward it to the actual seller who then ships it directly to the customer on your behalf.
Then naturally the questions that come to the mind are “is dropshipping from AliExpress really that profitable?” or “what is this article about if everything is available on YouTube?”. The answer is “This article is from my own experience, I’ve been there done that.”. Let’s do the rest of the article in a QnA manner.
Question #1: Is dropshipping business from AliExpress really that profitable?
Answer #1: Well, YES and NO.
YES, it can be profitable if you have a great dropshipping website that gets lot of visitors who then convert into customers. You have the skills of digital marketing, product selection etc. yourself, or can hire someone to do that for you. Also you already have a steady income and hence can sustain quite some time even if you don’t make any profits from the dropshipping business for months. How to get all these things done is out of scope for this post, that’s too broad a topic to cover here.
NO, if you don’t get visitors at all to your website or those who visit don’t convert into customers. In short if the items listed on your dropshipping site don’t sell. You are looking for making profit immediately after starting the business.
Question #2: Are the items on AliExpress really good?
Answer #2: Some of them are good for the price they’re being sold at and the features they offer. But one has to trial and error. Always check the reviews, ratings and the number of times the product has been ordered. That’s possibly the best you can do to ensure quality. Sometimes, after receiving the items you do realize that they really are of cheap quality. Do your own research, be ready to have bad experience a few times too. But as said earlier, lots of products are available there and if you can ensure quality, then it’s really good.
Question #3: Are the items really very low priced?
Answer #3: Yes, they’re very low priced and they offer features that’s unbelievable at that price. However, check with wholesellers/suppliers in India and quite possible that you’ll find the same product at similar prices within India itself. This is because the wholesellers buy them directly from the manufacturers in China in huge quantities and hence at highly discounted prices. The only downside is that they bring only selective items and not all the varieties available.
Question #4: Is the overall experience with AliExpress good?
Answer #4: Depends. If you talk about the process of dropshipping, then you can use tools like Shopify & Oberlo and automate the entire thing except selecting and adding products to your shopify store. If you are shipping to only the US and from the US based warehouses only, then I don’t see any issues with logistic either. But if you are shipping to India, they mostly ship via China Post who then hands the consignment over to India Post, and there the problem starts. The postman sometimes delivers the products flawlessly. But if you’re not available to receive at the delivery address when he comes to deliver, then whether he comes again or not is upto him. The best you can do is to visit the local post office and get the parcel.
The other issue is with customs. E.g. You place 3 orders with different sellers on AliExpress, 2 would get delivered well before the promised time but the last one may be charged a few thousand rupees as customs duty. No idea why that happens with just some of the shipments. Now you’re in a twist, if you pay the duty and get it the product price goes up which may not appeal to customers. If you don’t pay and forget about it then you lose the money you paid to the seller. I didn’t find any solution so far except buying from local wholesellers/suppliers who’re already stocking the products.
Question #5: Are there any alternatives to AliExpress?
Answer #5: Yes, there are alternatives, like Bangood, DHgate etc. but again, they are all Chinese companies so you may face the same issues as with AliExpress. The good news is that there is an Indian alternative named Indiamart. It’s basically an online B2B platform that engages bulk buyers with with wholesellers. The wholesellers would have chinese products bulk imported at much lower price and hence can wholesell at great prices even after keeping their profit margins. This is good, but again, you don’t get as many varieties as on AliExpress, Bangood or DHgate.
Question #6: Any other risks that needs to be aware of?
Answer #6: The biggest problem could be “Returns”. You dropshipped something from AliExpress/Oberlo to a customer in the US; you’re based in India; the customer received the product but didn’t like it or it was damaged in transit. The customer knows only you, he/she doesn’t know AliExpress. You need to decide here based on various criteria how to handle this situation; there are several articles & videos available on the internet about this. You may go through them and see what could be good for you. My suggestions given below.
- Frame your return/refund policy in such a way that the customer would try to return only for genuine reasons like manufacturing defects or damaged in transit. It should protect your interests but shouldn’t make your customers stay away. Make sure you have published your policy on your website.
- Prefer not to sell products that have various sizes, because that’s one reason where lot of returns happen due to nobody’s fault.
- If it’s a genuine case and products if of low value, then better ask the customer to keep it and do send him a new one too.
- If the case is genuine and the product is expensive, provide your address to the customer to ship it back. Because the seller on AliExpress most likely won’t accept it if shipped directly to them.
Conclusion: Dropshipping may work if you have the time, money, knowledge and patience and that too if your business targets customers in the US or Europe. That’s because AliExpress has its warehouses in the US and Europian countries too and hence the customers in those countries wouldn’t have to wait for weeks to get the product after ordering. But I’m not very hopeful if you plan to sell in India. Because Indian customers are acquainted with very fast delivery times by Amazon, Flipkart and the likes and hence will never wait for the long time AliExpress takes. They have faster delivery options but they are expensive and adds to the cost of the product. If you plan to sell in India, then dropshipping may not work. You’ll have to purchase and stock the products yourself from manufacturers and wholesellers, and then ship when you sell them. There are few dropshipping service providers I did find in India but either they don’t have nice items or the prices are too high for you to earn any margin. Also technologically their services are no as seamless as AliExpress/Shopify/Oberlo.
Do dropshipping business if you want to:
- Target US and Europe
- You have other sources of sustainable income.
- You have the patience to wait for months or year for your first sale.
- You’re willing to pay for your online website even thought you’re not making any sales for months.
- Have a plan to handle returns/refunds.
- You have the expertise in digital marketing and product selection or can hire someone with those skills.