An informative article for the business men and women of today!
What is Aliexpress?
Aliexpress is a subsidiary of the Alibaba Group. Launched in 2010, it has become the destination one of the fastest growing eCommerce platforms for users outside of China.
Unlike its sister platform named Taobao, which focuses primarily on the Chinese domestic market, Aliexpress caters moreso to the international market and is available in English and 15 other languages. This makes it a popular portal for dropshippers to sell to consumers in their own respective markets.
Aliexpress acts as a marketplace for sellers, consumers and resellers. Resellers use this site to list products from Aliexpress sellers to their own website. In this way, each product that the reseller lists on their own website is being marked up by a percentage from the original wholesale cost. Chinese-made products hold a significant price advantage in the market, so therefore, the price markup can become a very profitable motive to source products from Aliexpress and similar marketplace platforms.
Sounds good, but what's the catch?
Well, to get things started Aliexpress is not a true dropshipping supplier. Aliexpress does what is called online retail arbitrage – in which the reseller sources a product from a publicly available website and marks up that product to sell on a different platform or sales channel. Aliexpress has hundreds of sellers that can all vary in their quality of products and service – it is a marketplace of sellers who list goods from direct suppliers to sell to consumers or other resellers. If you are looking to stay in the dropship industry for the long term, solely relying on Aliexpress and other retail arbitrage outlets for your dropshipping business may not be the most sustainable option.
With a true dropship supplier, you are sourcing from a direct supplier without the price markup on their products. The key difference between true dropshipping and retail arbitrage, is that in true dropshipping, you have a direct business relationship with your supplier – in which you or your company would receive a discounted price on products that is otherwise not available to the general public.
The real downside to Aliexpress!
Aliexpress is simply not sustainable. Packages far too often get lost in transit during the lengthy journey from China. Word of mouth is powerful and it is crucial as a business that you are on the right side of it. What do I mean by this? Consumers can caution one another to steer clear of your business just as easily as they can sing your praise and recommend you to others. That is why using a U.S. fulfillment service like VVSFulfillment is so important - we guarantee 2-3 business day delivery on all domestic orders (Alaska and Hawaii excluded - 4 business day shipping). As any dropshipper actively using AliExpress can attest to, the chargeback rate from 15-30 day shipping is brutal. Customers leave poor reviews, reverse payments, and cause a customer service nightmare just because dropshipping store owners are too stubborn to realize shipping times that can exceed a month are simply unfit for the consumer of today.
Inconsistent and prolonged shipping times, increased chargeback rates, unsatisfied customers; just some of the things you can expect if you are using AliExpress to source your products and plan on scaling. That being said if you are doing ~1000 orders per month I am sure you are starting to experience this. At VVSFulfillment we can supply almost product for any niche with 2-3 day shipping. We do this buy manufacturing in bulk and storing in our U.S. based fulfillment center. We are able to offer competitive pricing typically matching Aliexpress while also offering unique options like custom packaging and promotional cards. Please reach out to Michael@VVSFulfillment.com if you are doing 750+ orders per month and are interesting in a pricing quote for your products.