A quick note:
This article is written for our Singapore blog, but the same principles apply wherever you are in the world, read on. We've got some great advice in store for you.
As a dropshipper, you’ll be marketing and selling your chosen products online, to customers who could be anywhere in the world. Once you make a sale, your supplier can ship directly to the buyer - meaning you don’t need to deal with the logistics, or worry about holding inventory yourself. It’s a smart business model for people looking to get into ecommerce - and for experienced entrepreneurs can be a great way to make a full time living.
If you’re thinking of getting into dropshipping, you need a place to find the perfect products for your customers.
AliExpress is an online marketplace which allows you to connect with a broad range of suppliers you can partner with to build your dropshipping business. This guide walks through some key points about dropshipping with AliExpress - and also introduces Wise Business as a great way to protect your profits when working with suppliers and customers based overseas.
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AliExpress is a marketplace platform where customers can buy a broad range of goods - many of which have been produced in China - from a large number of small retailers. Like other marketplaces sites, AliExpress offers customers buyer protections which mean you can get a refund if the items you buy don’t turn up, or turn out to be fake.¹
AliExpress is the customer facing side of popular Chinese site Alibaba. While Alibaba deals with business to business sales - which are usually wholesale quantities - AliExpress is for regular retail sales. That means there are no minimum quantities when you order.
AliExpress had over 460 million hits in the 6 months to October 2020 - and is still seeing a steady rise in user numbers². Many of AliExpress’ users come from China - but there are also growing numbers of people based outside China who use the platform. Some 8.5% of users are in Russia, with 7.4% of customers in Spain, and 6.75% in the US.
Although many AliExpress users will be buying for personal use only, it’s also a popular place for dropshippers. More on that coming right up.
In the dropship model of ecommerce, the dropshipper does not handle the goods sold at all. Instead, as a dropship entrepreneur you’ll focus on marketing - finding the right products for your customers, and creating sales. Once a sale is made, you’ll then work with your preselected suppliers to have them pick, pack and ship the items directly to your customers.
So, dropshipping on AliExpress means you can sell items through your own online store or another marketplace platform, and have a AliExpress retailer fulfil the customer order directly. AliExpress suppliers are predominantly based in China and East Asia, leading to relatively low product costs - which can mean a healthy profit if you’re smart about the products selected.
When a customer makes a purchase you take payment, and then simply enter the order on AliExpress³, using the customer’s address for shipping. That means you receive whatever retail price you’ve set for your items, while paying the supplier their online price, keeping the difference as profit.
AliExpress also has membership programs, loyalty discounts and promotions which may give a further boost to your income.⁴
Dropshipping is a popular business model for many because it requires little to no upfront investment. You’ll need to be able to set up an online store, and pay for hosting, but there are few upfront costs aside from that.
This ease of entry means it’s also competitive - so you’ll need to make sure your products and your marketing really stand out from the crowd. It’s also worth really spending some time considering what products will work well for you. You’ll need items which are simple and fast to ship, not too heavy, and not too fragile. Margins are tight, so you’ll also want to find items which can be sold for a good markup in your chosen market.
Finding the right products and suppliers is crucial to building a successful dropshipping business. Luckily, AliExpress has an online dropshipping centre which has tools for ecommerce entrepreneurs who want to use a dropship model.
You’ll first need to create an AliExpress account by following the steps and prompts on the AliExpress homepage⁵.
Once you have an account you can log into the dropshipping centre to search for suppliers using a great selection of filters. For example, you can search by niche, by trending item, by supplier location or shipping time.
Depending on what’s important to your business at the time, this can be really helpful to secure the right products and suppliers, and keep your customers happy.
To get started with AliExpress dropshipping you’ll need your own ecommerce store or a marketplace platform which allows this form of dropshipping.
Some marketplaces do not accept dropshipping through AliExpress, so you’ll need to find the right route for your business model.
One great option is to build your own store with the AliExpress dropship plugin⁶. You do need to pay a one off fee for this service, but will then be able to import products from AliExpress directly to your site.
You’ll also get a really helpful range of tools which can allow greater automation of the selling process - and cut your admin time significantly. The plugin is fully compatible with Woocommerce, so you can get the best of both tools for your own site.
One of the great things about dropshipping is that you can be based in Singapore, but connect with customers and suppliers all over the world. So you may decide to stock products sourced in China, but target your marketing at customers who are based in Europe, the US or Australia for example.
If you’re working across countries, you’ll also need a smart way to work across currencies. That’s where a service such as Wise comes in.
Wise is a specialist in international payments, offering currency conversion which uses the mid-market exchange rate with no markups or hidden fees. With the Wise account you’ll be able to get paid in pounds, euros, US dollars - or dozens of other currencies - and switch back to SGD whenever you need to, using the real exchange rate and for just a low fee.
This can work out to be significantly better value than using a marketplace platform’s own currency exchange, or relying on your normal bank. And of course cutting your costs means you can offer a better price to the customer, while still making a healthy profit.
With Wise you can also get local account details for major regions like the US , UK, Australia and the euro area.
That means you can receive payments just like with a local bank account in these regions, and use these personal details to get set up when marketplace platforms require a local bank account to get started.
AliExpress has buyer protections in place which means that you’ll receive a refund if your item does not arrive or is not acceptable when it does.
This may be the case if you buy items which are guaranteed to be a genuine brand and they turn out to be fakes for example. You’ll need to open a dispute through your AliExpress account, to start the refund process, showing what the problem was, and why the refund is required.
Getting a refund will usually take between 3 - 20 days, depending on the banks involved⁷.
It’s important to know that you may lose out due to currency conversion if you’re paying your supplier in one currency, and being refunded in another⁸.
Either banks may charge currency exchange fees, or the rate may change between buying the item and getting the refund. Use your Wise Business multi-currency account to buy and receive refunds in the same currency, to avoid this issue.
eBay does not allow dropshipping from AliExpress. This is because eBay has policies in place which prevent users dropshipping from other marketplace sites - although you can technically dropship in eBay through a wholesale supplier.⁹
It used to be easier to dropship with eBay but the new policies and rules were brought in as a result of customer complaints following bad experiences with dropshippers.
While this is not characteristic of all entrepreneurs working in dropshipping, marketplace sites are now wary of allowing dropshippers to sell at all - resulting in restrictive seller policies which all dropship business owners need to deal with.
Breaching eBay’s seller policies means your listings will be demoted or removed, and your account can be suspended. You’ll still have to pay any fees you owe, too. Learn more about dropshipping on eBay here.
Amazon also has rules in place about what dropshipping is and is not allowed - although these rules may vary between regions. You’ll need to double check the policies which are in place in the markets you intend to sell to, to see if you can dropship on Amazon from AliExpress.
How feasible this is may also depend on the suppliers you can find.
For example, to dropship on Amazon in the US, you must find a supplier which will list you as the seller on all packing slips and invoices, and include a return label which allows you to personally deal with returns and customer aftercare¹⁰.
Learn more about dropshipping with Amazon, here.
Dropshipping isn’t easy, but the low barriers to entry make it a great business model for people who are new to ecommerce, as well as more experienced entrepreneurs.
Here are a few handy tips to make sure your AliExpress dropshipping journey gets off to a good start:
- Take time to research your customer, and choose your niche - as a dropshipper you can invest most of your time in marketing and really getting to know the people you sell to
- Use AliExpress’ dropship tools to find suppliers which can give you exactly what you need - looking at the products available, price and quality, as well as reviews from previous customers
- Make sure your product listings really stand out with clear descriptions and photos, and accurate sizing and other product information
- Check delivery times before you choose a supplier, and be clear with customers about the expected shipping
- Ask suppliers to avoid putting shipping notes into the packet, so it’s not obvious that you’re using a dropship model
- Keep on top of customer care - your reputation is everything and you want customers to return, and leave great product reviews
- Create a long term marketing strategy to make sure your business develops and grows - using a blog, Instagram, YouTube and other social media channels can keep the conversation with your customers moving
Dropshipping can be a great option, but it’s important to put in time to research the products you sell and the customers you’re looking to connect with.
By finding the perfect products for your chosen customer base, and using trusted suppliers, you can build a profitable business over time.
However, dropshipping is not a high margin game. That means that cutting unnecessary costs is essential if you want to grow your business. One good way to do this is to use Wise Business when working with customers and suppliers overseas. Don’t waste money on currency exchange with poor conversion rates and high fees. Instead, offer customers the chance to pay in whatever currency suits them - and receive your payments to your Wise account. You’ll be able to switch your balance back to SGD using the mid-market exchange rate whenever you want to, avoiding excessive fees, and boosting your profits.
- AliExpress - AliExpress Buyer Protection Overview
- Similarweb - Aliexpress traffic overview
- AliExpress Help Center
- AliExpress Help Center - Aliexpress coupons
- AliExpress Help Center - How do I register
- AliExpress Dropshipping Plugin For WordPress
- AliExpress Help Center
- AliExpress Help Center - Why is the received amount less than the refund amount on order page
- eBay - Drop shipping and product sourcing
- Amazon - Drop Shipping Policy
All sources checked 16 November 2020
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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