Alibaba Dropshipping: An Overview

The word “dropshipping” raises different responses in people. While some believe it’s a great beginners’ approach to ecommerce, others do not consider a viable approach to making money, having heard that it is mostly associated with scam and unrealistic description of products. With all these misconceptions and  misinformation about dropshipping, it is often difficult to know which to believe, hence the reason for this article which is to serve as a compass to navigate the world of dropshipping. 

This is the best guide to dropshipping you’ll find anywhere as it is not written by an individual with half-baked knowledge of dropshipping; rather it is written by someone  who has created large, successful ecommerce businesses from dropshipping. This guide is not written to fan our doubts by telling you what ‘might’ work; rather it is written to clear your doubts and increase your conviction by telling you what has worked and what will work based on real-world experience. This is the most detailed and thorough guide to dropshipping you’ll find anywhere. This guide will teach you everything you need to know to get your own dropshipping business off the ground, especially on Alibaba. It will also discuss the basics of dropshipping  and how deal with some of the problems that arise when dropshipping business booms.  

What is Dropshipping?

Dropshipping is a method used in fulfilling retail such that a store does not necessarily have to keep the products it sells in stock. Rather, it purchases the required item from a third party and ships it directly to the customer when it needs to sell a product. This implies that the merchant, otherwise the seller, never sees or handles the product. Dropshipping differ primarily from the normal retail model in that the selling merchant doesn't stock or own inventory in dropshipping which is a common feature of the standard retail model. 

Advantages and Disadvantages of Dropshipping

Advantages

Easy-to-start

It is an e-commerce business that is easy to run since it doesn’t deal with the physical products.

Dropshipping ensures that one does not need to worry about the usual challenges associated with the standard retail method such as: managing or paying for a warehouse, packing and shipping your orders, tracking inventory for accounting reasons, continually placing order for products and managing stock.

Not Capital-intensive

It is a viable method to start an e-commerce store without having to invest largely in inventory at the beginning at the business. This is because dropshipping does not necessarily require the merchant to purchase a product before making sales. He only purchases a product after he has already made the sale and have received payment from the customer. This makes it not to be capital-intensive.

Not Location-specific

Dropshipping business does not require the usual study on the proposed location of the business. In fact, a dropshipping business can be run from anywhere inasmuch as there is an internet connection. Once your location affords you the opportunity to communicate with suppliers and customers easily, you can run and manage your business from there

Low Overheads

It does not require purchasing inventory or managing a warehouse. This makes it to require minimal overhead expenses. As a matter of fact, many successful dropshipping businesses are run from a home office with a laptop.

Wide Array of Products

You can offer a wide range of products to your potential customers since you don't have to pre-purchase the items you sell.

Easy to Scale

Unlike the traditional business you usually need to do more work if you receive more orders, dropshipping ensures that most of the work to process  that comes with additional orders are borne by the suppliers, affording you to expand with a proportionate increase in stress.

Disadvantages

Low Margins

The biggest downside to dropshipping is low margin. This is because it’s an easy to start business with a considerably low overhead cost. This makes many merchants to set up shop and sell items at ridiculously low prices in an attempt to grow revenue. This gives rise to price comparison among the buyers; and a competitive pricing among the sellers. This increase in intense competition easily destroys the profit margin in dropshipping..

Shipping Complexities

While working with multiple suppliers as most drop shippers do, the products on the website is often sourced through a number of different dropshippers. This complicates your shipping costs. For instance, if a customer places an order for five products which are all available from separate suppliers, the dropshipper will incur three separate shipping charges for sending each item to the customer.

Inventory Issues

It is a lot easier to keep track of the items that are in stock or out of stock if you stock all your own items. This is not true for when you are sourcing from many warehouses, which are also fulfilling orders for other merchants. This causes inventory changes on a daily basis.

Supplier Errors

Sometimes, suppliers make mistakes in fulfilling orders. Even the best dropshipping suppliers make mistakes fulfilling orders. The merchant always have to take responsibility and apologize, even though he is not at fault. Sometimes, low-quality suppliers make it worse by causing frustrations due to cases of missing items, botched shipments and low-quality packing, which can damage your business's reputation.

What is Alibaba?

Since the past 23 years that it was established in 1999, Alibaba has grown into a formidable B2B marketplace platform used by suppliers and buyers around the world to develop and grow their e-commerce businesses. Alibaba is popular because it offers a wide range of services, products, features, and administrations that simplify B2B procurement.

With Alibaba, you can be in direct contact with a good number of reputable global suppliers and buy products at wholesale prices. You do not have to pay anything to create or maintain the account as a buyer on the platform and there are no additional fees.

With over 18 languages, Alibaba has a host of features that make online sourcing easier than ever. It is a significant resource for new and established businesses, and Alibaba dropshipping is extremely popular to trade directly with manufacturers, factories, and international wholesalers.

B2B merchants can sell to dropshipping customers through Alibaba and offer order fulfillment. This means that a wholesaler can stock goods for retailers around the world and fulfill ecommerce orders from specific warehouses.

Is it possible to do Alibaba dropshipping?

Most people may see Alibaba as a B2B website that only receive bulk orders, while this concept need to be turned. For cater to the market, nowadays you can find dropshipping suppliers on Alibaba who are willing to do the fulfillment order and manage the shipping process for you. Researching the suppliers who has affordable prices, reasonable MOQ and plenty of positive reviews may take you a lots of time and patience. While, when you finally determine such reliable suppliers, things will become much easier for you. And it’s definitely possible for you to do Alibaba dropshipping.

Dropshipping on Alibaba

Alibaba is a free marketplace that enables you to browse millions of quality dropshipping products from a huge range of categories, including beauty, fashion, home and garden, electronics, toys, and more, and import them directly into your dropshipping store to start selling right away. You can customize product descriptions, get product photos directly from suppliers, and set up pricing and logistics with just a few clicks.

Even better, you can take advantage of dropshipping suppliers on the platform to source any product you want to sell without a minimum order requirement. This is particularly useful when you want to test out product ideas before committing investment to stock a large local inventory to shorten delivery for your local customers. All sellers on Alibaba dropshipping centers are either top-rated or Verified Suppliers, manufacturers, and factories who are willing to provide online stores with high-quality products and fast shipping.

Many dropshipping suppliers also support Alibaba's Trade Assurance, which helps protect your orders. Trade Assurance fully covers your purchases when suppliers fail to meet the contracted product quality and delivery schedule. Additionally, you get to choose the best deals from factories offering discounts and special promotions.

4-Steps Guide to Dropshipping on Alibaba

Alibaba dropshipping offers an automated and integrated solutions designed specifically to strengthen dropshipping operations. For instance, importing products into your online store and tracking orders or shipments are all automated processes. This makes your sourcing journey less tedious and more efficient.. The following steps will guide you through the process of dropshipping on Alibaba.

Create a Free Buyer Account

Follow these simple steps to create your free dropshipping account on Alibaba.

· Go to the Alibaba login page and click the Join Free button to register your free buyer account.

· Enter your email address, check "Service Agreement" and click "Next."

· Check your mail for the confirmation email and click the registration link.

· Fill out the registration form on Alibaba.

Connect to Your Store

Having created your account, you will need to connect it to your online store. Follow this step to connect your account to your store:

· Go to Alibaba dropshipping center, and click on My Store on the left panel.

· Select where your store is hosted (WooCommerce, Shopify, etc.), and click Add Store to start.

· Input your store URL to proceed (taking Shopify as an example), and then click Add store and you will be redirected to Shopify to finish the connection.

· Click Install app as shown above in your Shopify administration page and the pairing process will be complete. You will then be redirected back to Alibaba dropshipping center.

When you do all these, then you are nearly ready to start leveraging Alibaba. However, you need to first source some products from the Alibaba dropshipping center to sell on your store. This leads us to the next step which is importing products into our store for selling.

Import Products into Your Store for Selling

Step 1: To find products you want to sell, go to the Alibaba dropshipping center, click Search Products on the left panel as on above screenshot, which will take you to the dropshipping marketplace, where you can browse and refine your search for dropshipping products.

Step 2: Import products into your store by clicking on any product and selecting Add to Import List to save it to your import list. You can as well customize the product settings and import in bulk later on.

Step 3: After selecting all your desired products, go to the Import List, where you can customize the product title, description, pricing, fulfillment, and images as needed.

When you have succeeded in setting up your account, you may either push products one by one or buy in bulk to your online store. To do so, just click Push to Store.

This process may take a few seconds depending on how many products you are pushing at one time. Once pushed to your store, the products can be viewed by clicking My Products. When you gain access to your array of products, you can set pricing updates, chat with the suppliers, or delist items from your store.

Settle orders and fulfillment with suppliers

Having completed the above steps, you’re now selling! Orders received on your store will sync in your Alibaba dropshipping account automatically. Simply go to My Orders to manage and track all your orders, shipments, and to settle fulfilments with suppliers.

Under My Orders, you can confirm and pay orders to your supplier, track shipping statuses, confirm deliveries, cancel orders, , request refunds, and, etc.

Because all of the order fulfillments are automatically settled with suppliers on the platform and all the tools to track and manage orders are in one place, order processing and management is a doddle.

The difference between AliExpress Dropshipping and Alibaba Dropshipping

Alibaba dropshipping and AliExpress dropshipping are both popular words in the e-commerce business world, which one should we pick when we are e-commerce startups? Here are the differences between Alibaba dropshipping and AliExpress dropshipping:

Pricing:

Products on Alibaba are usually sold in bulk, cause they’re sold directly from wholesalers or manufacturers. Bulk orders will have better price, that’s one advantage of Alibaba dropshipping compared with Aliexpress. In additionally, on Alibaba, you can negotiate with the suppliers about the price.

MOQs:

A typical character of Aliexpress is no MOQ limitation in common situation. While Alibaba will usually set a MOQ. The MOQ may be 10, 100 or 500, for some small pieces products, the MOQ can be much higher. MOQ can be negotiate, too.

Ratings:

On Alibaba, you can only see the rating of the suppliers, not the product itself. While on Aliexpress, you can see the product ratings which will be easier for you to judge whether the product is high quality or not.

Ease of use:

Aliexpress is a B2C platform, the interaction in Aliexpress with dropshippers are more smooth. Since it’s a B2C platform, the sellers on it do not committed to work with high-volume buyers, you can order everything even if you are a private person.

Customization:

There will  always be a MOQ if you want to customized white-label or private label products. The sellers on Aliexpress can be seen as resellers rather than manufacturers, which means they buy things for the top sellers and resell them on Aliexpress. So it’s difficult for them to customized for you. In this case, Alibaba is better than Aliexpress. Manufacturers on Alibaba producing and selling oneself, they have the ability to meet your requirements for customizing.

Shipping:

There are two types of suppliers on both Alibaba and Aliexpress. One part of them offer shipping service for free but will increase the products’ base price actually. They another part will charge for the shipping directly. 

The benefits of Dropshipping on Alibaba

The following are some of the benefits of dropshipping on Alibaba

1. Real B2B Wholesale Suppliers

Alibaba focuses on B2B selling which allows to sellers to buy straight from manufacturers or factories without an intermediary unlike other retail platforms. This provides buyers with fundamental advantages in terms of pricing, stock capacity, and service reliability. In order to run a thriving dropshipping business, it is essential to work with reliable suppliers over the long-term in a way that benefits you both. Therefore, B2B suppliers stand to benefit the most from dropshipping.

2.  A Wide Array of Products With Low Prices

On the Alibaba dropshipping marketplace, you can find close to 2 million niche products across all major categories that you can sell straight from your online store. That number is constantly growing and most of the products available are priced under US $15 – this is your golden chance to increase sales.

Each year, Alibaba offers two mega promotions that last one month each, one in September and the other in March.

2. No Minimum Order Quantity (MOQ)

Minimum order quantity (MOQ) is the lowest number of units that a wholesale supplier allows buyers to purchase at one time. This concept is often referred to as the "minimum order policy." Suppliers set this limit to avoid wasting time and resources on orders that would yield little profit, and is a common production method among most merchants around the world. In addition, both suppliers and manufacturers set minimum order quantities to ensure that they make a profit on every order.

Often, the more products produced, the less expensive the cost of production in relation to the components required, such as labor, raw materials, and capital.

3. Verified Suppliers or Gold Suppliers

An important point to note is that, in dropshipping, you are responsible for customer service, thus you have to deal with issues that may arise, including everything from processing customer orders, delivery, and refunds. Therefore, customer experience can make or break your business.

In the dropshipping center on Alibaba, all suppliers are rated as either Gold Suppliers or Verified Suppliers to minimize potential negative customer experience. Suppliers are divided into Gold or Verified suppliers during the verification process based on their respective certifications.

4. Fast Delivery

Alibaba boasts its own shipping methods for global destinations, including economy options. The platform also works with major carriers to offer e-Packet, air freight, and other shipping solutions to provide on-time delivery, tracking information, and competitive pricing. Specifically, the trusted suppliers on Alibaba work with numerous shipping companies, such as DHL, UPS, and many more. This ensures that your customers receive their products as quickly as possible. This way, you can keep your customers happy and reduce potential complaints about product delays.

5. Free Dropshipping Tools

In dropshipping, sourcing and listing products can range from a single-click process to a long and arduous slog with endless manual copying and pasting from your source supplier's website. And that's not to mention the effort required to frequently update your new listings. This can eat into your selling time, which is arguably what you should be focusing on the most.

Alibaba dropshipping offers all the tools you need, including searching for a product, customizing a product listing, importing products into your store, and tracking orders and shipments, etc. Best yet, all of these steps are highly automated, saving time and money, and you don’t need to pay a single penny to use the related tools.

Can a China Sourcing Agent Help me with Alibaba Dropshipping?

It's rare to find suppliers who agree to dropship and do the  order fulfillment process for you on Alibaba. It will be more suitable for you to hiring a third-party dropshipping agent based in China to handle all these tedious things for you.

If you plan on using a dropshipping agent for product sourcing, you can send the agent a link to the product you want to sourcing from China. They will handle the job for you and source the similar products with better price and quality.

Ruizhi sourcing is such a China sourcing agent that can handle your sourcing process.

Finding a reliable supplier for your dropshipping needs on Alibaba.com can be challenging, but with this guide and a little product research, it can be a hugely rewarding experience. Just remember to always set your financial goals, research the products, and choose your suppliers with due diligence. Happy dropshipping!