Creating an online store sounds tempting to many people. Indeed, this type of business opens many growth opportunities and yet allows to save on retail space and staff. However, an online store still requires investments in purchasing goods, renting a warehouse, setting up logistics, and marketing.
If you have ever thought of cutting costs when planning an online store business with little start-up capital, you have definitely come across dropshipping. Even though this approach to online sales simplifies a lot for the seller, there are still many details to consider to be successful. Worry not, we are here to tell you all about it! Check out our A to Z instruction to build a thriving business online with minimal costs.
What Is AliExpress?
AliExpress is a marketplace, not exactly an online store, as many may think. It is a platform where sellers trade with buyers, while the site’s administration acts as an assistant and guarantor. But what makes AliExpress attractive for thousands of buyers from all over the world?
AliExpress is a platform where it is easy to find, choose, and buy goods. It offers a fast registration procedure, a simple interface, straightforward navigation, and reliable customer support.
Besides, AliExpress encourages users to leave reviews after shopping, which provides rather trustworthy feedback to the items and facilitates the selection process.
2. Easy Payment
AliExpress has a wide variety of payment methods available for customers, including:
- Credit or debit card
- Western Union
- Wire transfer
- American Express
3. Customer Protection Policies
If the order does not arrive on time, the customer can open a dispute and receive a full refund.
Also, there may be cases when the client receives defective items or products that do not match the seller’s description. In this case, the customer can file a fault report by submitting clear photos and the issue’s clarification through the dispute section.
This way, the user can claim a partial or full refund, or have a special arrangement with the seller. If the buyer and seller cannot agree, the AliExpress support service interferes to perform the mediator’s role.
4. Wide Selection of Goods
The AliExpress platform is bursting with the selection of products to match every taste and wallet. The site hosts sellers trading items from over 30 categories. Besides, the buyer has the right to chose from a variety of shipping methods.
5. Discounts and Special Offers
Nearly every seller on AliExpress has a special offer for their clients. Also, many stores on AliExpress provide discount coupons which enable returning customers to save up even more!
What Is Dropshipping?
Dropshipping is an excellent way to start a business without having to worry about inventory or delivery. The idea is simple and consists of several steps:
- You choose a supplier and make a contract with him.
- You select products from the supplier and set a higher price on them in your online store.
- The customer places an order in your dropshipping store.
- You forward the order data to the supplier.
- The supplier sends the order directly to the customer.
- You transfer the difference between the purchase and retail prices to the supplier.
Great news! You do not need to manufacture goods or own a warehouse – open an online store and start earning as a dropshipper. The supplier will be dealing with the logistics and storage of goods, while your task is to attract customers, take care of payments, B2B relationships, and website updates.
Pros of Dropshipping
Dropshipping sounds extremely promising, doesn’t it? Take a look at its main advantages.
1. Small Start-Up Capital
You do not need to purchase goods in bulk, and you can pay for it after the buyer transfers money to you. Also, there is no need to invest money in production, which means that you do not risk setting it up incorrectly and losing a part of your capital.
2. No Warehouse Needed
There is no need to spend time looking for a warehouse. It is the supplier’s job to take care of providing suitable conditions for the goods’ storage.
3. Less Time-Consuming
You do not deal with the design, packaging, and delivery of goods – the supplier does it for you. A laptop and Internet connection is enough to redirect the time and energy saved on storage worries to brand promotion.
4. Work on the Move
With dropshipping, you do not need to work from an office – you can manage your store from anywhere in the world.
5. Opportunities for Growth
You can cooperate with several suppliers at once if your contract does not prohibit it. It will help you to expand your business and serve larger numbers of customers.
Cons of Dropshipping
No business model is flawless, and dropshipping is no exception to the rule. Before deciding to launch this type of business, make sure you are aware of its potential downsides.
1. You Do Not Control Everything
When it comes to dropshipping, you cannot control all the processes involved in the customer experience. For instance, you do not directly influence prices, the availability of goods, and their quality – they depend on the supplier.
2. Store Reputation at Risk
Be ready that in the event of dissatisfaction, the client will address claims to you. Such issues may include:
- non-compliance with the delivery time
- damaged goods
- poor packaging
3. Revenue Depends on Marketing
Dropshipping is an extremely low-risk business. However, your revenue may be lower than you expect. To get high profits with this type of business model, you will need to sell goods in large quantities. That is where knowledge in marketing comes in handy.
Despite its downsides, dropshipping is an excellent business for aspiring entrepreneurs with little start-up capital. When one decides to implement the dropshipping method, the first step is to find suppliers. Read on to find out how to use AliExpress as a platform to find the best deals!
Why AliExpress for Dropshipping?
One of the biggest challenges of dropshipping is finding a reliable supplier. Luckily, nowadays, there is a fantastic platform that makes it more accessible. Thanks to AliExpress, dropshippers can find products to sell in their online stores at wholesale prices without having to browse through numerous scattered sources.
AliExpress is a marketplace with a large selection of products that you can resell in your online store as a dropshipping business owner. Reselling is a common practice on AliExpress, so most sellers are willing to reach a dropshipping agreement.
You do not have to purchase products on AliExpress in advance, to test different goods on your site without any financial cost. Thus, you can do dropshipping with AliExpress with minimal investments.
How to Choose Products to Sell
An online store owner’s task is to offer products that will spark the interest of potential customers. To convert website visitors into clients and generate profit, the selection of goods in your store should be thought-through.
Step 1. Define Your Target Customers
Do you know who your potential client is? Knowing your target groups will bring clarity when defining your niche and choosing products for sale at a local online store.
Make sure you have a clear vision of your customer’s portrait. It is a general image of your client, which includes characteristics that can tell almost everything about him, namely:
- place of residence
- marital status, number of children
- the sphere of employment and the level of wages
- position, related problems
- needs, desires, phobias
When you have your target audience in mind, you can understand what products to offer. Besides, knowing these parameters will give you an idea about your potential marketing campaigns.
Step 2. Select a Niche
The next crucial step in setting up your online store is to define your niche. If you’re not sure where to start, take a look at what product categories AliExpress offers and make a list of what interests you. Pay attention to such factors as:
- target audience
- local competitors
- marketing potential
If you plan to be working towards a stable income through dropshipping, it is advisable to avoid seasonal items.
Suppose you have decided on the choice of a niche. Now your task is to check its relevance. How to do it? With the help of software, such as Google Trends, you can find out the frequency of a search query in different countries and languages.
Remember that not everyone finds the perfect niche right on. It may happen that the chosen dropshipping niche does not bring enough revenue. However, you can switch to another niche at any time, and that’s okay.
Step 3. Choosing the Products
Products that are trending are great options for an online store. If you find it challenging to decide which products are suitable for dropshipping, try to analyze which products are currently popular. If you can get such products for your store before they hit the mainstream sales channels, you can take advantage of them and establish your brand as a local leader in the field.
If you are interested in finding products that are currently trending or products that are likely to be popular in the future, you can check out sources, such as Kickstarter.com, Amazon Search, and Google Trends. Also, pay attention to social media channels, such as Instagram and Pinterest. When analyzing these sites, note if you find any popular products that interest you and could work for your store.
Also, think about the products you are interested in buying yourself and are likely to order online. You may be surprised by how many valuable ideas you have!
When picking any product for your store, think about how you will advertise and sell those products to your audience. Besides, it is essential to keep a systematic record of your ideas.
Here are some ideas of trending products that can be excellent for your dropshipping business:
- Reusable straws. Times are changing, and single-use plastic is no longer a thing. It is partly because many countries implemented bans on disposable plastic products in 2019, and many more countries are joining this movement in 2020. For a dropshipper, this means an incredible business opportunity with an eco-friendly mission behind it.
- Neck phone holder. Mobile phone accessories are always in high demand. In fact, this lucrative market is projected to be worth $107.3 billion by 2022. You can try to catch the trend in this niche with neck phone holders. These convenient products eliminate the need to hold onto your smartphone while watching videos or making video calls – just slide the clip around your neck and relax. You can even bend the clip into a phone stand or use it as a selfie stick.
- Pet accessories. The market for pet products is huge – especially for dogs. In the US alone, more than 60 million homes have a dog. These numbers are great news for dropshippers. Besides, 35 percent of pet owners are millennials, and more than half of them buy gifts for their pets once a month. According to Forbes, one of the most popular pet gifts is clothing. It is both cute and practical, which provides excellent marketing opportunities.
Three Main Beginner Mistakes in Dropshipping
Have you ever heard someone say “dropshipping doesn’t work” or “dropshipping is a scam?” If you dig deeper into the failure’s core among many dropshippers, you will usually find common mistakes that make them lose significant revenues.
Let’s take a look at three frequent reasons that result in people failing to dropship from Aliexpress and how you can avoid them.
1. Not Testing Enough Products
Many beginners in dropshipping usually only test 1-2 products before they decide the business model is not working. The truth is, it often takes a lot more tests to find the perfect niche and products for your business. On average, it may take up to 20 test-products to find one item that will be selling great. It may sound daunting, but this one winning product will pay off the time and effort you spent on testing other products and take your revenues to a new level, so it’s worth finding it.
Unfortunately, when most people fail when testing their first few products, they are more likely to blame the business model or their lack of skills, rather than agreeing that they just need to try more items. Like with any other business approach, dropship does not guarantee instant profit and has its ups and downs.
2. Not Focusing on Product Description
When you create product descriptions for your online store, do not try to save your effort. Many beginner dropshippers think it is enough to copy images and product features from AliExpress, as they get sold there anyway. However, the way your products appear on the website is a crucial element of converting a visitor into a customer.
If you need the inspiration to create your product descriptions, it is a good idea to check trending items on Amazon. Typically, product descriptions of successful sellers include:
- At least five high-quality photos of the product from different angles.
- A detailed description, featuring a bullet list with the main product specifications.
- If applicable, a comprehensive table of sizes and/or measurements.
3. Lack of Remarketing and Follow-Up Campaigns
One of the highest ROI a dropshipper can get from paid advertising is remarketing. Remarketing is all about targeting people viewing your site using the tracking pixel. With its help, you can receive data from your online store and use it for advertising goods on other sites, such as Facebook, Google, and YouTube.
Typically, you will advertise the same item that the potential customer looked at earlier. The reason remarketing has such a high ROI is because it creates hot traffic. People browse your web store because they already have a certain degree of interest in the product. Enabling the item to reappear for them in an ad makes it easier to draw attention and conduct the sale.
Unfortunately, many new dropshippers working with Aliexpress are so focused on the first ads that they ignore the opportunity of setting up a remarketing ad.
Besides, keep your returning customers in mind. If you are not running marketing campaigns to bring shoppers back to your store, you miss out on a huge revenue stream. Existing clients already trust you, so it is easier to convince them to buy from you again. Try not to focus solely on initial sales.
The simplest way to bring customers back to your store is to send them emails promoting new products or special offers. In most cases, dropshippers from Aliexpress and similar sites do not create email campaigns, and therefore they ignore significant profit opportunities.
How to Select Trustworthy Suppliers
Choosing suppliers is a vital step every dropshipping business must take. Even if you already know what products you want to sell and are confident that they will make your business profitable, it is only half of the deal. To succeed, you need to make sure you find dropshipping suppliers who can provide high-quality goods and services.
The process of finding reliable suppliers usually implies several stages.
Once you have decided on the products you would like to sell, find out which dropshipping suppliers exist and best suit your needs. To do this, browse through AliExpress and compare prices, user reviews, and shipment options. You can do it manually or use a software, such as Alitools, to assist you and make the process faster and smoother.
2. Contact Supplier
Talk to a provider that meets your needs and establish a relationship with them. Direct contact allows you to ask questions about the services they provide, inquire about special offers, and develop effective B2B communication.
Maintaining good relationships with your suppliers means that you will already have some trust when you start doing business together. It raises the chances of receiving quick replies to queries and better networking conditions.
3. Order Samples
Once you’ve selected several great suppliers to cooperate with, order the samples for yourself. Check their quality of service, delivery times, packaging, and ask any other questions you may have so that you are completely satisfied with the choice you make.
Ordering samples from a dropshipping supplier is an integral part of partner selection as it allows you to experience firsthand how your customers will perceive your store.
4. Order from a Competitor
If one of your competitors uses the same supplier as you, you can find out how the supplier packages their products and offers their services, such as custom labeling. If your competitor uses other suppliers, you can order from them to get an idea of the level of service you need to provide to keep up with the competition.
5. Pay Attention to Details
When you choose suppliers, many may seem great if you look at the products they offer and their reviews. However, once you get into the business, they may not suit your audience. It could have something to do with the raw materials they use, how they do business, or how they deal with returns.
It is crucial to collect as much information as possible, as while you can opt out of using a supplier after a problem occurs, your brand may already be damaged.
6. Know Which Suppliers to Avoid
It is challenging to know which suppliers to choose. Nevertheless, some signs point out sellers that should be avoided at all costs. Aside from negative reviews and low product quality, other factors can pinpoint a poor dropshipping partner.
For instance, if a supplier insists on a monthly or recurring payment, it is a bad sign. Also, try to avoid suppliers that take too much time to reply.
Supplier’s Refund and Return Policy
Most sellers on AliExpress do not offer return options. Therefore, you will have to take control of the process of returning goods or funds. Problems may arise because the package did not reach the recipient or your client was not satisfied with the purchase.
If the parcel did not arrive on time, you need to deal with the supplier on AliExpress. You can either contact the seller directly or open a dispute through the buyer’s protection system.
If your client is not happy with the purchase, offering a refund can compensate for the issue. If the product is damaged, ask the customer to take photos of the defect. Then, send them to the seller on AliExpress, and solve the problem with him.
How Can Alitools Help?
Although AliExpress dropshipping implies a relatively simple business model, it still requires a lot of effort in the primary stages. That is why you do not have to be dealing with this alone. Alitools will be your reliable assistant in finding the best deals, reliable suppliers, and trustworthy reviews.
As your AliExpress dropshipping business develops and grows, you will appreciate the following functions of Alitools:
- View customer feedback with images
- Track product price changes over the last six months
- Compare similar items of different suppliers
- Search items using images
- Check the sellers’ reliability
- Track items right on AliExpress