Did you know that 27 per cent of online retailers now use dropshipping for their primary eCommerce method.
Dropshipping is still a craze. Many people are beginning to dropship because of its low start costs.
This guide will teach you how to start an Amazon dropshipping company from scratch. It consists of 10 parts. Let’s get to it.
Dropshipping: What is it?
Dropshipping can be understood and distinguished from standard eCommerce models. Let’s start by reviewing the standard eCommerce model.
- A product can be purchased in bulk (100 units).
- It can be stored at your warehouse
- It can be listed on Amazon
- Customer makes a purchase
- You ship the product to the customer from your warehouse
Dropshipping is a way to avoid investing in stocks upfront. Here’s how it works instead:
- AliExpress allows you to search for a product
- You can list the product directly on Amazon without having to buy stock. However, you will list it at a lower price than AliExpress.
- You collect money from a customer who makes a purchase
- AliExpress allows you to order the product and pay the AliExpress lower price
- AliExpress delivers the product to you.
- The price difference is your profit.
You are the middleman between the supplier, the customer, and dropshipper. While you don’t need to handle shipping and storage, you can still make money.
It sounds like a win-win situation, doesn’t you think?
Why Dropshipping?
Dropshipping is a great way to save money and is very popular. Dropshipping can be a great way to jumpstart a small business.
You also run the risk that you won’t be able to sell all your product and lose money if you order it in bulk. What happens if 20% of your stock is not sold?
You will not only lose your initial investment but also lose money on storage fees. You will pay more for storage fees if you store products in a warehouse.
It is difficult to predict how well a product sells. Dropshipping allows you to test the product’s viability and you can always purchase it in bulk later, if it does well.
Where to source and sell your products
There are many places where you can sell your products. You also have the option to source products from a variety of sources. This article will be about selling on Amazon and AliExpress as a source.
Amazon is the largest eCommerce marketplace in the globe, and you can sell on Amazon to hundreds or millions of buyers.
AliExpress is an excellent place to source products because they are affordable and plentiful. There are many choices.
Let’s now discuss what dropshipping is and how it benefits you. Then let’s look at the steps to become a successful Amazon dropshipper.
Researching And Finding A Niche
Dropshipping is not like any other business. It is important to research the market and develop a strategy before you start dropshipping.
It all starts with finding a niche. You will be working in a niche product category.
Examples include:
- Men’s clothing
- Clothing for women
- Beauty and health
- Accessory for fashion
- Baby toys
- Pet products
A sub-niche can be used to narrow your niche.
- Men’s eyeglasses
- Leggings for women
- Acne care
- Beard care
- Dog food
AliExpress offers a variety of niche options.
It is important to do thorough research on your niche. You should look at the following five things when choosing a product category:
- High turnover rates
- Low competition
- Evergreen
- Low return rate
- There is a low chance of something going wrong
These two criteria are easy to understand. High turnover rates are a good sign and can bring in consistent income. Niches that have low competition will be easier to enter.
Products should be able to be used year-round, so that you don’t have to buy Halloween costumes or Christmas ornaments.
You don’t want products with high returns rates or negative reviews. Dropshipping is dangerous because you don’t have control over the product, its shipping and handling.
It is likely that you don’t have any physical offices or warehouses, making it more difficult to process returns (which we will discuss later).
Avoid products with high returns rates. Clothing is one example. It often has to be returned because it is not fitting properly.
Electronics are more susceptible to being damaged or stopped working after a few days. It’s best to avoid these products.
However, this doesn’t mean you can’t become a dropshipper and sell electronics and clothing.
This simply means that niches can be risky. If you decide to go into them, be aware of the risks and be prepared to handle any problems.
You can use a tool such as Jungle Scout to check if a niche or product is selling well on Amazon.
Jungle Scout allows you to research new markets and niches, and determine which products will be most profitable.
You don’t have to pay for a premium tool such as Jungle Scout. Instead, search Amazon’s top sellers to find out what is selling well. Also, check how many reviews the product has and what the competition is doing.
This can be done in conjunction with Keywordtool.io, a free Amazon keyword tool.
AliExpress – Find Products
Once you’ve identified your niche and the products you wish to sell on Amazon it is time to go to AliExpress to search for products you can sell.
You don’t have to choose the first product listings you see in your search. This is what everyone does, but AliExpress filters and sorting options will help you narrow your search results.
Let’s first go over the sorting options.
- The Best Match
- Orders
- Latest
- Price
The Orders filter can help you identify products that have been proven to sell. These are top-selling and well-received products.
The Newest filter can be used to help you find products that no one else is selling on Amazon. But, be careful! It is impossible to predict if a product like this will be a hit or if it will be a high-quality item.
The Price filter can be used to find the lowest priced products. However, it is important not to sacrifice quality for price.
I recommend the Orders filter. You will see listings that are highly sought-after for a reason.
To make sure that Amazon doesn’t have too many listings for that product, I recommend that you also check Amazon. It will be a lot of work but well worth it.
Let’s now look at the filter options.
- Shipping Fast
- Shipping Free
- Returns are free
- 4-stars and higher
- Price range: Min/Max
- Origin of shipping country
For your first order, I recommend the 4-star and higher fast shipping and no return filters.
It’s not as important as you think. You can list an item on Amazon with free shipping, and then add the shipping costs to the base price.
If a product is $2 on AliExpress + $2 Shipping, it can be sold for $10 with free shipping.
It is important to concentrate on quick shipping. Dropshipping from AliExpress can be difficult because of slow shipping.
Shipping can take several weeks because most products are made in China. It can sometimes take several months.
This is not ideal. Customers want to get their products as soon possible.
You can also choose products that ship from the United States, which is even better than using the quick shipping filter.
Although many products are advertised as “fast shipping”, they still arrive very slowly. Products that ship from China can take up to three weeks. If you sell on Amazon US, products shipped from the US will arrive much faster.
Shipping from the US can sometimes prove too costly. It is important to select products that ship from the US at a low rate.
Many sellers have warehouses in both China and the US, so you may be able to choose from a variety of products.
The sunglasses are shown in the screenshot. Shipping from China takes approximately a month (as of June 2nd), and costs $2.32.
Shipping from the United States is quick and easy, taking just 1-5 days. It costs $3.15.
It is easy to choose to ship to the US, and then add a dollar to the product’s price to cover this extra cost.
Most Amazon customers don’t see much difference between $17.99 sunglasses and $18.99 sunglasses. However, it is significant that there is a big difference between 1-5 day shipping and 30 days shipping.
Customers might begin to email you after 1-2 weeks asking for their sunglasses. They won’t be pleased to hear that it may take 2-3 weeks for them to receive their sunglasses.
Let’s sum it up: Look for products that are high-sellers and have fast shipping times.
But that’s just one part. It is important to ensure that the product you order is high-quality and that it arrives on time.
It is easy to ensure that your product meets customer expectations by choosing products with great reviews.
You’ll already filter out products with a star rating less than 4. But the higher the score, the better.
But don’t look at just the rating. You can read through reviews and find out what other people think. Were they satisfied with the product? Do you have any particular issues?
Are they claiming that they received the product quickly or complaining about how long it took to arrive?
Next, look at the supplier information. It will be located on the left-hand corner of the product listing page. You’ll also see the overall satisfaction rating of the seller. Some sellers may be designated as “Top Brands.”
Click on “Visit Store” for more information. Check out how long they’ve been in business. The longer they’ve been in business, the more reliable they will be.
You can hover your mouse over the section that states how long they have been in business (as seen in the screenshot below). This will show you more information such as their address, business license and customer ratings for each of the following qualities:
- Item as described
- Communication
- Shipping speed
You should ensure that the seller has excellent ratings in each of these qualities. You might not receive the product you ordered, or you may have difficulty contacting the seller to return it.
The following screenshot shows that this seller has below average ratings in all three areas. Avoid this seller as it will cause you headaches.
You may see dropshippers mentioned in the seller’s profile and product descriptions. Although this is not necessary, it is a good indicator.
The following screenshot shows that the seller will not include any marketing materials or price bills in the box. Customers won’t be able to tell it wasn’t from them.
We haven’t mentioned it yet, but it is something we should talk about: ordering paid samples.
Dropshippers may not wish to order samples because they want to keep their costs down. However, ordering samples can be a great way for you to check the product’s quality and shipping speed.
Create Your Amazon Listing
Once you’ve chosen your products, it is time to list them on Amazon. Do not make the same mistake as other dropshippers and copy the AliExpress listing to Amazon.
This strategy is bad for many reasons.
- Google doesn’t like duplicates.
- This is bad for Amazon SEO. Another dropshipper could be listing the exact same product on Amazon, and may have copied the listing. Amazon doesn’t like duplicate content either
- Customers will know: A listing could have spelling and grammar errors. Customers will also be able tell if you lazy copied it.
- It may not work. It could be a poorly-written listing. It won’t work: What works on AliExpress might not work on Amazon.
To create your unique Amazon listing, you can use the AliExpress listing information. You can create a listing from the sample you received if you have it.
Keywordtool.io is a keyword tool that helps you find high-volume keywords for your title and description.
When possible, use size charts from AliExpress in your listing.
AliExpress allows you to upload images. This strategy has one problem: if another dropshipper lists the product, your product images may look identical.
This can be avoided by not using the AliExpress first image as your primary image. Instead, choose the second or third Amazon image to be your default image.
You can also use additional images in your listing description on Amazon to replace the AliExpress default images.
Another option is to create partial images that are unique. This is an example of how the AliExpress image might look.
AliExpress listings that include a product video are even better. You can take screenshots of the video.
If you have ordered samples, it is a good idea to take pictures. You can create unique product images as long as your smartphone has a good camera and you have the right lighting.
Images are important but not as important as a catchy title and a list with features and benefits. It’s worth the effort and it will pay off.
Fulfillment of Orders
You have now placed your listing. Congratulations!
You must fulfill the order quickly so the customer does not experience delays in shipping or receive their shipping confirmation.
Just take the name and address of the customer that you entered on Amazon, and then enter them when ordering AliExpress. Double-check your order to ensure there aren’t any typos.
You can choose the right size and color.
After the product has been shipped, and you have received a tracking code for it, give that code to your customer to track the shipment.
Get Reviews and More Sales
Customers should be encouraged to leave reviews. Positive reviews will increase your listing’s visibility on Amazon, and help you convert more customers.
Positive reviews can be earned by being proactive and will prevent occasional negative reviews from being overlooked.
After your product arrives, send emails asking for feedback. Ask them to leave reviews if they are happy. Send your customers emails if you have a new product that you think they’ll like.
Handling returns and negative reviews
It is inevitable: Customers will not be satisfied with their purchases and will return it or request a refund.
This can cause headaches so sellers may have a no-return/refund policy. While this will make your life easier, it can cause customers to be disgruntled or leave negative reviews.
If you are willing to accept returns, reduce the AliExpress return period by a few days (e.g., 12 days instead 15 days). This will allow you to take some time in processing the return.
AliExpress allows you to request a return when a return is required. Send the AliExpress return label to the seller.
It’s a smart idea to use AliExpress’ “free returns” filter if you intend to allow returns. Not all products allow returns or exchanges. Sellers may not pay for returns.
Sometimes the product is so inexpensive that the customer will not be able to return it. Instead, they may opt to send a new one free of charge and allow them to keep their old one. This will save you time and lead to positive reviews.
If a product is $2 on AliExpress, but you sell it for $8 on Amazon — you still make $4.
Amazon FBA
This guide is not about dropshipping. However, it is worth spending some time discussing Amazon FBA or Fulfillment by Amazon. Here’s how FBA works.
- You can purchase a product in small quantities or bulk
- Instead of shipping the product to your warehouse, you can send it to Amazon
- Amazon ships and handles the product
Dropshipping is similar to dropshipping except that you don’t need to manage the product. You will need to purchase stock and store it.
FBA offers many benefits. Amazon will ship the goods quickly and Prime customers can get two-day shipping. Amazon will also take care of returns.
Dropshipping an item is one option. Once you are satisfied with its sales and high turnover, you can then order in bulk via Amazon FBA. Dropshipping can also be used to finance bulk purchases.
Wrap it up
Here it is, our AliExpress dropshipping guide. You won’t see success overnight. There will be some trial and error along the way to determine which products are selling and which ones don’t.
Dropshipping is possible with no upfront investment. As long as you are patient and willing to be consistent, it will be possible to become a successful dropshipper.
