How to Dropship from China?
To increase their product range, reduce inventory, and speed up order cycles, dropshipping from China is becoming a more popular option for entrepreneurs, retailers, distributors, and business owners. Dropshipping is a concept that many people have not heard of. Take a look at the infographic we shared recently, or check out the image below to see a summary.
Drop shipping, which involves sending goods directly from the supplier from the customer, has been around for a while. However it can become more complicated when you source from China if the dropshipping company is not right. Drop shipping can be a great option, but it also gives the supplier the ability to offer customer service. Retailers and distributors are at risk of losing their brand visibility if they don’t have complete order-to-delivery tracking. Dropshipping service companies like Chinavasion can help solve this problem. They have an in-house quality control team and logistics team that can efficiently manage orders. Since it is highly unlikely that customers know that the goods are coming from the supplier instead of the retailer/distributor; close coordination and visibility into the progress of the order is critical.
It is amazing to see how many companies still manage this process using spreadsheets and a smartphone. This method does not give you the ability to recognize exceptions and manage them as they happen. It will not scale with the company’s growth. It doesn’t take long before hundreds of thousands of data points are needed to track each order line item. Data integration with suppliers must be automated to keep up with increasing volumes and allow for more time to spend on value-adding activities. Chinavasion is currently working on an API that will automate the product listing and order processing, so companies can concentrate their resources on sales and marketing. The API will be available in September 2014. Subscribe to our newsletter to stay informed about this topic.
Do you want to start a dropshipping company? Are you having difficulties? These are seven key points to improving your drop-shipping business:
Select your products
Although the supplier may offer a broad range of products, it is up to you to choose whether you are going to offer a specific niche or the entire catalog. It will all depend on how you market and your expertise. You could be seen as an expert in a particular niche while offering many products will give the impression that you are a major player in the market. For example, the market for security products is a highly profitable niche market. Chinavasion has many customers that focus on this product category. Even though the average model sales is low, there are many Chinese customers who do. Drop ship customers also choose to offer a wider range of products, including tablets, phones, TV boxes, and our cool gadgets. No matter what you do, ensure that your offering is consistent with your brand/reputation.
Select milestones that can serve as control points.
Start with the most basic milestones. Although it is common to want to collect as much data possible, most companies have difficulty getting all the information from suppliers and don’t know what to do with it. Drop shipping milestones are:
- Customer order date and delivery time frame
- Order forwarded to Dropship Company Date
- Delivery notice by dropship firm date
- Delivery notice sent to your customer on the date of
- Date of customer’s receipt of order
Use actionable and regular performance reporting.
To control drop-shipping, the organization will use actionable reports. Actionable reporting is focused on critical and exception statuses. Actionable reporting, for example, should track supplier response times and not only milestone details. A supplier should be given a time limit to confirm a customer’s order if it is sent to them. Chinavasion, for example, ships products within one working day. We make sure that all products available online are in stock.
To allow resources to concentrate on the orders that require attention, actionable reporting should be exception-based. Performance reporting takes a longer term view (week/month/year-to-date) to track the supplier’s performance consistency and whether it is trending better or worse.
Make sure that your supplier has an in-house quality control team
Do not assume anything, even for well-respected China websites. Most Chinese dropshippers source their goods and ship out without quality control. Check to see if a Chinese dropship provider is available. There are many factors that affect the quality and performance of dropships. Manufacturers often place greater emphasis on cost-effectiveness than quality of delivery services. The supply chain becomes more complicated to manage when there is a lot of use of third parties. This is not necessarily a bad thing. Do not create separate logistic companies for order processing when you drop ship to China. This will make it more difficult to manage. Instead, look for a company with a well-organized logistics and order processing process. To ensure consistent delivery, you should evaluate the supplier’s product and logistics capabilities.
It is important to immediately share this information with suppliers. This will allow them to understand the value of what they provide. Once you are satisfied with the data’s quality, share it with your customer service team and with customers. Complex goods, especially those with long lead times, are often subject to the “where is my stuff?” question. This can be automated and made into a valuable service that customers will appreciate, rather than a frustration. This can increase productivity in the call center as well as the sales organization.
Use technology for automating and disseminating
Data quality and collection are two of the most difficult challenges. Dropshipping is multi-party and requires a network of logistics professionals to automate this task. A visibility solution should be able to model the supply chain milestones, and allow for flexibility to adapt as more information is gained about drop-ship supply chains. Visibility solutions link order statuses and allow for reporting. Cloud-based solutions are best because they allow for data sharing between parties.
Dropshipping is a great way to increase a distributor’s or retailer’s market reach. But, distributors and retailers are not able to see the statuses of their suppliers and get actionable insights in real-time. This means they are blind to how their supplier’s performance impacts their most valuable asset, their reputation.
How to Manage Chinese Dropshipping Suppliers?
Let’s start with the pros and cons. Then, we’ll move on to the Myth of Dropshipping from China.
Dropshipping from China: The Benefits
High Profits
Chinese suppliers are known for their big numbers strategy, which is a way of trying to make as many sales as possible, even though they have low margins.
This allows us to make more profit by dropping shipping these products on eBay.
We can also use the cashback system of most Chinese suppliers to increase our profit margins by 2-5% in the backend.
It’s easier to be unique – less competition
Drop shippers are afraid of working with Chinese suppliers. Because it is easier to be unique. It’s easier to find products that aren’t as popular, which makes it easier to make more profit margins than regular Online Arbitrage (Amazon, Walmart, eBay …)).
We can see that 63% of traffic to eBay.com comes from the United States.
This means that 37% more visitors are available if we work only with Amazon, Walmart and Homedepot, but without the Global Shipping Program (GSP does not accept all countries).
We often have worldwide shipping options available when we work with Chinese suppliers. This allows us reach more countries and increase sales by displaying our products on more than one market.
Chinese Suppliers Support Dropshipping:
Drop shipping is a favorite of Chinese suppliers. They can supply you with all invoices and contracts you need.
We have a partnership to Banggood. Simply reach out to customer service and we can provide you with a contract. You can also provide the contract to eBay or PayPal for verification.
Let’s now look at the negatives of dropshipping to Chinese suppliers.
Dropshipping from China:
Language:
This is no longer a con. Most Chinese sellers speak English. Even if they don’t, you can still use any translation platform such as google translate to translate anything from Chinese to English.
Customer Service
Many people believe that Chinese suppliers are not able to provide good customer service.
Although the customer service provided by Chinese suppliers isn’t as great as American ones, we are still able to work with them.
We need to verify the rating and feedback of the seller before we can find reliable suppliers. These parameters can give us an idea of what we will experience before dropshipping a product.
Shipping times can take a while
This is true, unfortunately! Dropshipping from China means that shipping and handling times are longer even though ePacket is available.
Complex Returns
Although the returns can be a little more complex, once you are familiar with how it works, it is very simple.
Let’s now move on to the Myth of Dropshipping from Chinese Suppliers.
Myth of dropshipping from Chinese Suppliers
Low-Quality Products:
Many people believe that working with Chinese suppliers will result in low quality products and negative feedback.
This is partially true, but not completely.
Many tools are available to help us sort and find products to dropship from China. You can also check if the seller you’re willing to dropship is active on AliExpress with over 95% positive feedbacks.
You can also check out the reviews to ensure that you are only working with products with at least 3.5 stars.
Dropshipping from Chinese Suppliers will lead to a suspended account
Drop shipping from China is not the reason for account suspension. It is all about quality products that are listed based on market research you have done before listing them.
Even if you work only with American suppliers, your selling account can still be closed.
Buyers won’t buy from you:
Many people believe that buyers won’t buy from you because of dropshipping from China. However, this is false.
Many buyers around the world prefer to wait for products to be delivered at a lower price.
These buyers will be happy if you offer lower prices, but longer shipping times.
Is Dropshipping From China Profitable?
The most common question I am asked is:
“Should i drop my ship from China?”
Drop shipping from China via direct Facebook ads is a topic that seems to be popular in the community.
It’s something that I know people are interested in…
However, it seems that people who have tried it don’t get great results. Drop shipping from China can be a good option for you.
It boils down to two major downfalls. I will cover them AND show you when drop shipping from China is possible for your business.
Drop shipping wholesale products from China is a risky business model. Drop shipping to China with suppliers is not recommended for beginners. Let me tell you why…
I have never attempted to manage an entire business using products shipped from China. Instead, I only had a handful of products in my store. The thing that stood out to me most was the shipping time. The product should reach the customer within two weeks if it is shipped quickly.
Sometimes it can take up to four weeks. It would be fair to assume that products reach your customers within three weeks. Yikes!
This can be a problem if your products aren’t custom-made. Online shoppers demand immediate delivery. This puts you in an awkward position where you have to explain to customers why it will take them longer than a month to get their product.
The thing is that even though you place it prominently on your website, you will still receive emails about it.
You might say something like, “Hey, it’s been a week & a half. Where’s my product?”
This means that you will have to do a lot more customer support work! This can lead to a negative experience for customer service and an unpleasant experience for the customer.
It’s a win-lose situation for everyone involved.
This can lead to long-term strain and will ultimately cost you less. This is why drop shipping providers are the best choice, as they offer faster shipping times. This will result in happier customers and less customer support.
Return Products
This brings us to the second issue of drop shipping from China: returns.
Many products are made in China, however they are often branded. Generic products are more likely to have higher defect rates than branded ones.
China does make great products, but that’s not to say they don’t have good products. Most of the products you can sell from legitimate Drop Ship Suppliers are from China. Dropshipping directly from China will cause problems.
These generic products could lead to defective items. Some items won’t look the same as they appear in your product photos. Customers will want to return the items. What happens next?
The returns will not be going back to the supplier because you are dropping shipping from your home country. These products will most likely return to you, similar to drop shipping via Amazon.
These defective products will cost you extra. This will quickly eat into your profits.
It seems that most people I speak to about this (who are actually doing it!) sell products for around $20. They’re pointing direct ads to Shopify, which is not how I’ve done eCommerce in the past.
It might not work for you, but it is not how I have been successful. Drop Ship Lifestyle doesn’t teach it.
Our success model is based drop shipping high-ticket items. This will allow you to make more sales.
Drop shipping from China isn’t something we considered. We built our drop ship program to work with long-term strategies and work best.
This doesn’t mean that it shouldn’t be used. This just means that you need to follow the instructions first before you can explore.
When is it safe to drop ship products from China?
Drop shipping to China may be possible for tripwire products, but I would not recommend them as your supplier for the main product. Due to the long shipping times and the high cost of returns, I wouldn’t recommend them as a supplier for your main product.
Tripwires are smaller products you can sell your customer to get them excited about your main offer. You want to build trust and establish a relationship before you sell your more expensive product.
However, I believe that this method should not be used if you’re a beginner. Drop shipping from China is not recommended if you are just starting your store. If you already have a successful business, you might consider adding it to your product line.
Drop shipping from China can take longer to deliver to customers. This puts more pressure on customer service. This will result in you having to pay the return shipping costs since all defective products you receive will be yours, and not the suppliers.
It is not something I would recommend for your main offer, and it is not something I would tell a beginner. I wouldn’t recommend low-ticket items unless you’re warming up customers to your main offer. This is how eCommerce works with high-ticket items and profits of $300+
This will be an ongoing conversation so I’d love to hear your experiences with drop shipping from China. As always, I’m available to answer any questions you may have in the comments section.
