How to Start a Dropshipping Business through AliExpress – Pros and Cons
Dropshipping is an e-business model that for years, has helped entrepreneurs find new business opportunities..
When you start a business, you're typically unsure what customers will want or how you can satisfy them. Specifically in regards to products, you can't keep everything in inventory to satisfy your customer, so dropshipping is the best solution to provide your customers with anything they need- without paying the stock’s cost. Plus with dropshipping, you can introduce many new products on your online website, which will help add diversity to your e-business.
To simplify the concept of dropshipping, imagine you have a website such as an online store, and your product links are tied between the wholesaler (or the manufacturer) and the customer. When a customer or consumer orders something, you contact the retailer, and the retailer will provide the product to the customer while the customer pays you. This way, you don't have to pay the manufacturer before you’ve made the sale. So- dropshipping helps you form a steady supply chain and allows you to run a business through your online website without the worry of packing, shipping, or the cost of storage.
How do I start dropshipping?
Dropshipping is indeed a simple business model, but because it's a relatively new concept, it can get confusing, but this article will help you start your own dropshipping business. If this venture is to be taken seriously; you will have to invest, primarily, time. The investment of money, however, depends on if you can manage an online store on your own or if you need specialists such as programmers/marketers who may require a handsome amount of money.
Dropshipping is like any other business; you need a license and a business credit card because, as I said before, it is an actual business, so you need everything required by a legally running operation. You will have to decide the type of business structure, either you want to be the sole owner of your online store or if you want to have partners or if you want to take it to the next level and form a company. Whatever you decide, you have to commit to it fully.
How does dropshipping work? - Process of dropshipping
Dropshipping is a simple process that starts with a customer finding a product on your online store they want and then placing an order. When the visitor places the order and payment are processed, you contact the wholesaler or third-party supplier (usually automatically). You then pay the wholesale price, which means you are keeping the profits to yourself.
When the third-party suppliers have the customer's order information, they will pack the order and ship it to the customer’s location. Now a question arises here; if the wholesaler is processing the order, do they have their logo or brand name on the package? For example, if you are a dropshipper and supplier is AliExpress, AliExpress might have their packaging on the product; however, you can establish these SOPs with your wholesaler to ship all orders with your store name and logo. It’s just like they ordered from your store and your store delivered. The interaction regarding the delivery of the product will be between you and the customer, not the third-party supplier.
Capital/Investment needed for dropshipping
For this business model, what you have to invest is your time and money. Time is the crucial requirement, although you can save more money in dropshipping than any other type of business model, you will have to invest some of it if you want your business to flourish. As it is pretty much apparent that the cost of dropshipping is much less than any other online store. The major investments in dropshipping are:
Buying a domain:
To have a legit online store, you need to buy a domain to start your business website. You will have to choose a domain name for your business website, and the cost mostly depends on the domain name you want, but if you are a beginner, you shouldn't be spending a lot of money on the domain name. Buying a domain starts from 10$ and goes up to thousands of dollars.
Any business requires a great marketing strategy. Especially in an online store, when you have a lot of competition, you need a marketing strategy that makes you stand out. Marketing starts with creating a logo and a compelling website for your customer to present your products while subtly telling them the benefits of said products. If you believe that you can do the marketing of your website and invest time and creativity, you don't need to hire a marketer. Still, marketing requires an investment one way or another.
Return and refund:
Customer satisfaction always comes first. Although the third-party is delivering the product, you are handling the transactions with the customer, so the refund and return policy may cost you some money.
To sum it up, your dropshipping business does require investment, but be careful in investing money. Make a proper budget for your business; don't mix your personal finances with business finances, and remember to keep an eye on your expenses.
What is AliExpress?
AliExpress is a huge online store where you can find almost any product you need. It is one of the most significant and prominent sources for dropshippers. AliExpress gives people opportunities to display their products on their online store, and these people are mostly manufacturers or sellers. The products are available at wholesale prices. AliExpress can help you find any product you want to display in your online store.
AliExpress can prove to be a great source for your online business as they have a complete description of the product, and they can also provide you with pictures of the product that you need to display on your website.
When you find a product on AliExpress, you see its description and images and then post it on your site with just a few clicks. You can learn more about the product and write a description with more details and add the price, including your profit margin. When the customer sees this product in your store, they order it. Then you can go to AliExpress to place your order and buy the product at wholesale price AliExpress offers. AliExpress ships the product directly to the customer when you provide them their shipping details.
Pros and Cons of AliExpress dropshipping:
AliExpress dropshipping is very easy, secure, and reliable. Beginners in dropshipping mostly use AliExpress as a source of their business. Still, have a look at these pros and cons to decide if AliExpress is the right solution for you.
Pros of AliExpress dropshipping:
- AliExpress does not have high startup costs. The most you need is to invest in the domain name and Shopify plan. That is why entrepreneurs who don't have a lot of investment, choose this platform for starting their dropshipping business.
- In dropshipping, risk is minimal as the inventory cost is AliExpress’s responsibility, not yours, so it is much more reliable. If any of your products don’t sell, you can add another without incurring losses.
Cons of AliExpress dropshipping:
- As dropshipping is a relatively simple business model, the competition is increasing day by day, which can be a problem, but branding can help here.
- In dropshipping with AliExpress, you will have less control over the shipping and delivery process.
- AliExpress is trustworthy, but you are not too sure about the suppliers, so you will have to take the blame for any damages.
- There can also be a problem in shipping time as AliExpress takes from a week to 2 months to deliver products, so you might have to ask them for a speedy delivery.
Is AliExpress safe and reliable?
Yes, AliExpress is safe and reliable. Many people, not just dropshippers, trust AliExpress for wholesale products. AliExpress usually provides the best quality products, so you don't have to worry much about customer satisfaction. But why should buyers prefer your store over buying from AliExpress directly? For this, you will have to plan an effective marketing strategy and provide customers with the best products from AliExpress to fulfill their wishlists. A satisfied customer always returns for another purchase.
The bottom line
Dropshipping has become a great business opportunity for online vendors. You can start a dropshipping business with only one product line on many products according to your goals and capital. All you have to do is invest your time and triumph in the competitive market. Dropshipping continues proving to be a beneficial source of income.
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