Dropshipping aggregators to start working with. What is Dropshipping: Detailed scheme for creating a business

Last update: 02/14/2020

Reading time: 17 min. | Views: 16789

Hello, dear readers of the business magazine “site”! In this article we will talk in detail about dropshipping: what it is, what is the working principle of dropshipping cooperation in sales, how to find dropshipping suppliers for an online store.

After reading this material you will learn:

• What is dropshipping and how does it differ from related areas of online business;
• What advantages does this sales system have and what significant disadvantages should you pay attention to;
• What are the features of working on this system, what needs to be taken into account at the beginning and throughout the entire work;
• How and where to look for dropshipping suppliers for online stores in Russia and abroad;

Here you will also receive clear step by step instructions on starting a dropshipping business for beginners + detailed description of all popular dropshipping companies.

So here we go!

What is dropshipping and where to start dropshipping cooperation, which suppliers work in Russia and the world using this system, what goods they supply and under what conditions - this publication is devoted to all this

This term came into our speech from in English. In the original the word consists of two parts: drop And shipping, which literally means "direct delivery" .

This type of business can be implemented on the Internet by a novice entrepreneur without large financial investments. We have already talked about this in one of the previous articles.

Dropshipping is a trading system, the basis of which is sales through an online store, but the owner of the trading platform does not purchase the goods, but orders them directly from the manufacturer for the client’s money.

Dropshipping- this is not a strange foreign word that hides some kind of deception, this is a proven model of earning money good money, which can subsequently be reinvested (invested) in your own business and ultimately organize an extensive and extremely profitable business.

To do this, you will have to study the possibilities of marketing and understand various types of Internet resources, and perhaps even be deceived (and more than once), fail or catch it by the tail before you succeed, but it will bring a truly decent level of income and the desired lifestyle.

Don’t be afraid and don’t leave it for later – get to work soon!

Dear readers of the “site” magazine, if you have thoughts (opinions and comments) on the topic of publication or experience in running a business using the dropshipping system, then leave your comments and feedback on the article below. Thank you in advance!

Dropshipping (or resale of goods) is great way start your business without worrying about inventory or shipping. The scheme is quite simple: you put the product up for sale on your website and, having received the order, write to the supplier so that he sends the product to the buyer on your behalf. We will look at this scheme in more detail in our (slightly expanded) translation of an article from the Shopify blog.

The most difficult thing when doing dropshipping is finding a reliable supplier. But there is a great one for this trading platform.

With AliExpress, you can easily find items to sell in your store without worrying about inventory or shipping. You can pay for goods at wholesale prices, and the seller will send them directly to your customers.

Why AliExpress is suitable for dropshipping

AliExpress is a huge marketplace with a large selection of products that you can sell in your store. Due to the fact that most sellers on AliExpress are foreign manufacturers, they offer their products at quite competitive prices.

Although AliExpress positions itself as an online retail marketplace, most sellers on AliExpress understand that the majority of their buyers are resellers, so they are interested in dropshipping.

Plus, dropshipping with AliExpress is very easy.

You don't have to purchase products in advance, so you can test different products on your site without incurring any financial costs. You can start dropshipping with AliExpress today without investing a penny.

Most sellers on AliExpress load great photos products that you can use on your site, and also provide detailed descriptions, thanks to which you can describe the product in your store.

And finally, the dropshipping scheme is very simple - having received an order on your website, you place an order on AliExpress and indicate the client’s address for delivery.

Below we will describe this process in more detail, and also tell you what to look for when choosing a product and seller, as well as how to set yourself up for success. In general, everything is not so difficult.

Why would someone buy a product from your store if they can buy it themselves on AliExpress?

When doing dropshipping with AliExpress, your competitive advantage will not be the price or uniqueness of the products offered. After all, this is arbitrage trading.

Your competitive advantage can be good marketing and proactive customer search. Branding, creating content, and providing excellent support can also help you increase the value of your business in the eyes of your customers.

Creating a store

Now that you understand how dropshipping with AliExpress works and what you should focus on on your site, you need to launch the site. For this you can use the platform Shopify , this is one of the simplest and most popular platforms for creating online stores. Or you can look for alternative and less expensive options that offer a free plan, such as Tilda, Shop-Script etc. But don’t rush, first think about what exactly you are going to sell. Then you can choose a design that matches your chosen niche.

Choosing a niche and products

First and important step in creating your store is to decide on a niche. If you don't know where to start, look at what product categories AliExpress has and decide what you're most interested in and what you'd be most interested in selling.

Once you've decided on a niche, it's time to start choosing the products you want to resell in your store. In our example, we chose sneakers as a niche.

AliExpress sells a lot of products, too many. To avoid headaches, choose quality products from a reliable supplier.

We have compiled a small list of criteria for choosing the right product. These criteria are not backed by research and are based only on our experience, but they may help you find reliable sellers. Here's what you need to pay attention to:

No brands, fakes or imitations. It is better to refuse branded items so as not to resell fakes and imitations. Choose unbranded products. If a product has a logo, then it is better to refuse it, even if this logo is real. There is no need to take any risks since you are not an official representative of the brand and you cannot be sure whether the product will be genuine. This can greatly reduce the selection of items for resale, so it's best to choose a niche where the brand doesn't matter - such as electronic accessories or clothing.

Free shipping with tracking capabilities. Whenever possible, choose products from sellers who provide free shipping with the ability to track the parcel all the way. Read the product description - sometimes the delivery method varies depending on the order amount, and cheap parcels are tracked only in China. It is best when the seller provides delivery by ePacket - it is not only cheap, but also very fast.

More than 300 orders. If a product has a lot of orders, this indicates several things. Firstly, this product is in demand. Secondly, the supplier of this product is most likely reliable, since some of these orders may be repeat orders. When searching for new products, you can sometimes sort products by number of orders.

For the latter, you can use the Chrome extension - AliExpress Assistant . It is also available for Firefox, Opera and Yandex browser. This extension shows a more detailed seller rating.

Low price and the possibility of a potentially high markup. Depending on the goods that you plan to resell, choose goods worth 1-20 dollars (approximately 60-1200 rubles at today's exchange rate). Thanks to this, you risk less if the product turns out to be poor quality and you will lose money, and you can also make a large markup on such goods and sell them for 20-50 dollars (1200-2800 rubles). For example, on AliExpress you can find sneakers for $20 and sell them for $50. This way you will get 60% net profit.

A lot of good photos products without logo. Just in case, check that the photos are actually provided by the manufacturer and not stolen from another seller. You can do a Google image search to see if the photos were taken by the seller themselves or were taken from the manufacturer.

Sociable and helpful seller. Don't be afraid to ask the seller questions before placing an order. A good, reliable seller will quickly answer all your questions. Sometimes you can even get a discount. If the seller does not respond to messages, this is clearly an alarm bell.

Adding products to your store

Now you have decided on a niche and products, and launched a website. Now it's time to add products. Don't just copy images and product descriptions from AliExpress. If you want to succeed, take adding products more seriously.

Add your own product descriptions. Descriptions for most products on AliExpress are not written by copywriters, and the description usually does not fully reveal the benefits of the product. In addition, current descriptions are usually only available on English language, and Russian machine translation in most cases turns out to be indigestible. Creating unique content will serve you well in the long run (Google ignores copied content) and will allow you to create product pages that sell.

Please indicate expected delivery time. It's a good idea to indicate on the product page (or somewhere else on your site) that the customer will have to wait at least 20 days to receive their order (depending on the supplier). Most suppliers are located in China and delivery times range from two weeks to several months, depending on the shipping method. Besides, we all know how Russian Post can work :)

Use an app or widget to track your order. Since the delivery speed with dropshipping is faster than in regular online stores, your customers will most likely often ask you where their order is. So that your customers can see the order status, you can use a special application for Shopify , or you can add a special tracking widget to your site postal items, For example, Post-Tracker.ru or Post2Go.

Offer free shipping. This can become your competitive advantage. Most sellers on AliExpress ship for free or at low cost, so we recommend offering free shipping to your customers.

Please indicate appropriate prices. It is best to indicate a price approximately twice the original price. 50% of net profit will make your business viable and will also cover your marketing costs.

Add products to your store using apps. There are special applications that will greatly facilitate and speed up the process of adding products from AliExpress to your store. For example:

• Oberlo - app for Shopify
• Expressfy - extension for Chrome

How to Use AliExpress for Dropshipping

It's quite simple - when you receive your order, buy the desired product on AliExpress and enter your buyer's name and address. The AliExpress seller will take care of the rest.

It's a good idea to create a spreadsheet in Excel or Google Docs with a list of all the products in your store, your price, the seller's price, and a link to the product on AliExpress. This way, once you receive an order, it will be easier for you to find the right supplier on AliExpress, as well as monitor price changes.

Instead of a table, you can use special applications. For example, the Oberlo app for Shopify that we mentioned above will help you more easily place orders on AliExpress and monitor price changes. Price changes can also be tracked through the extension AliExpress Assistant.

When placing an order on AliExpress, it’s a good idea to let the seller know that you are doing dropshipping. Then the seller will not include any receipts or coupons in the package for your client.

On the checkout page, you can add a message to the seller. We recommend writing a message like: “We’re dropshipping. No promotions & invoices, please!” It is better to write the message in English, since most sellers do not speak Russian.

After placing your order, you will soon receive a message that your order has been shipped. The speed of preparing goods for shipment depends on the seller.

After this, you can change the order status on your website and allow the customer to track the package using the method you previously selected.

Ready! All you have to do is wait until your client receives the order. When the package is delivered, AliExpress will send you an email asking you to confirm receipt of your order. It’s worth taking a little time with this - make sure that the client has received the parcel and that everything is in order with the goods. If something is wrong, you can write to the seller or open a dispute on AliExpress to resolve the problem.

What about returning goods or funds?

Most sellers on AliExpress do not provide return options. Therefore, you will need to deal with the return of goods or funds in several ways. Problems when ordering through your store can most often arise due to the fact that the package did not reach the recipient or your customer was dissatisfied with the purchase.

If the package did not arrive on time, you need to deal with the seller on AliExpress. You can either contact the seller directly or open a dispute through the buyer protection system.

If your client is simply dissatisfied with the purchase, we offer to return his money. If the product is damaged, ask the customer to take photos and send them to the seller on AliExpress, and solve the problem with him.

Growing your business

Once you've completed a few orders, it's time to start looking for ways to grow your business and make more money.

Over time, you will learn to separate reliable sellers who supply quality products from unreliable ones. It's worth thinking about building business relationship with reliable sellers. This way you can get more low prices and priority in order processing.

Most sellers on AliExpress use Skype. If you find yourself ordering from the same seller often, it's a good idea to ask for their Skype contact information and build a business relationship. Show the seller what you can bring him big number orders. Then some sellers may allow you to place your logo on the goods, and also include custom invoices/receipts or inserts with your logo in the package.

Start dropshipping

One of the benefits of dropshipping with AliExpress is the ability to quickly test and evaluate ideas and products. Not sure if it will sell specific product? Add it to the site and see if there are orders. No orders? Just remove the product from the catalog and try something else.

Because you don't have to pre-purchase items and regularly check stock availability, you take almost no risk. Create a website and start growing your business. And add it to the site to promptly respond to customer questions or complaints.

Don't miss the next post. We write rarely, but aptly, about online support and marketing

The dropshipping scheme is considered as one of the options for organizing a business without investment. In essence, this is a type of mediation between the producer and the consumer. The dropshipper’s task is to find a buyer, take payment for the product from him and redirect the client to a large manufacturing company (or supplier), which will send the paid item.

Not only “small” but also serious companies operate using the dropshipping system. Initially, dropshipping was discovered by enterprising people who paid attention to the attractive range of Chinese, American and other foreign suppliers. Due to ignorance and language barrier their websites were inaccessible to Russian consumers, and intermediaries organized a business on cheap imported products. By creating a Russian-language page on the Internet with an interface that is understandable and familiar to Russians, dropshippers found customers, collected orders and forwarded them to foreign suppliers - they sent the item of sale to the end consumer.

Dropshipping is also called a dropshipping business (from English drop shipping), since the products come to the buyer directly from the manufacturer or wholesaler. Similar view business is the division of costs for promoting a product: the manufacturer (supplier) has no time to engage in promotion, dropshippers do it for him. If a person has the entrepreneurial gift of finding cheap and high-quality things online at ridiculous prices and convincing other people of his integrity, he will turn out to be a successful dropshipper.

Pros and cons of dropshipping

The scheme looks simple, but it has some nuances: making money on it is more difficult than we would like. First of all, it is difficult to find a manufacturer (supplier) who always has the goods. Difficulties arise with delivery if the buyer and seller live in different regions (or states). If you don’t like the quality, claims will be filed with the intermediary. The downside is that the dropshipper finds clients, invests money in marketing and promotion, but cannot store client base in secret.

Worth remembering! The main disadvantage of working through the “direct supply” system is that the seller is responsible for all the “jambs” (after all, he took the money), and gratitude (and customer loyalty) goes to the manufacturer.

However, the scheme would not have become so popular if it did not have its advantages. The main advantage of dropshipping is its economy, because they start a business from scratch: to earn money, you don’t need to find borrowed funds, start-up capital.

Today, dropshipping is a method of direct delivery, when an online store takes on the function of a seller, but all other manipulations with the product - production, logistics and others - remain with the supplier - it is completely changing. All the problems behind dropshipping should be solved in 2015. How to become partners, learn to control the sales process on both sides and satisfy the needs of the end buyer - we will talk about this in the article.

Commerce Hub, a specialist dropshipping company, says: “The lack of integration between companies is a big problem in the dropshipping model. Record keeping and the ability to track orders becomes essential as thousands of orders go through hundreds of suppliers!

This is not sending one order for a thousand items of one line to just a few warehouses. Everything is much more complicated here.”

Sellers are struggling with a loss of control as they must now rely on their suppliers to ship products in a timely and professional manner.

If a supplier fails to fulfill an order properly, it becomes a nightmare for the seller's customer service team! There are delayed orders, complex processes for processing returns, problems with packaging and invoices.

And suppliers have their own difficulties. Select, pack and ship your order to a retail buyer- this is not the same as delivering the goods to the seller or to distribution center on pallets or in boxes.

Cooperation on the dropshipping system will require updating the warehouse, placing an order, maintaining an invoicing system: a lot of different processes need to be controlled in order to deliver the goods. In addition, the greatest degree of risk that the inventory will become worthless also falls on the supplier.

One of the most difficult challenges faced by both sellers and suppliers is integration. Channel partners must integrate their systems to make dropshipping automated. And another stumbling block is the lack of a single standard that will help implement and support this integration.

To sum up a little, we can say that the situation with dropshipping seems very difficult - it is almost impossible to implement. But there is one key that will lead to the success of dropshipping and make it a great supply chain management method for online retailers. And that key is relationships.

Relationships: from business relationships to integration

In dropshipping, you must replace the business discussion, where the seller negotiates with the supplier to purchase goods at wholesale prices for resale, with an integration negotiation.

During such negotiations, both parties must understand the virtual part of the relationship and begin to work together. This will help allocate resources that will help manage business processes and meet new technology requirements. Such coordination requires a consensual relationship.

This approach to negotiation is the only key that will ensure the success of dropshipping or ensure that if it fails, everything will go smoothly and painlessly. Having the same expectations between supplier and seller is a prerequisite.

It is necessary to become partners, not buyers and sellers

Traditional supply chain relationships, as well as outdated business processes, do not fit into the new economic world. When a seller decides to enter into a dropshipping system or adopt a model in which their warehouse obligations will be much lower, they must take several significant factors into account.

The first thing a seller must recognize is that dropshipping is not just another order fulfillment model. As the financial formula changes, relationships also change.

While the ability to avoid making actual purchases is a financial advantage for the seller, it also limits the amount of leverage he has over the supplier's behavior.

Moreover, in exchange for the opportunity to sell more products through the retail channel, the supplier assumes all financial risks without having much financial security.

In a dropshipping scheme, negotiations are more complex than with traditional relationships: wholesale order of goods - sale to a retail buyer. Because the seller will ask the supplier to spend time and money working with the buyer in exchange for a promise of profit, the supplier will resist additional technical requirements.

These factors make it difficult for sellers to manage supplier performance. Dropshipping is a strategy where everyone is a partner and consistency is required.

Success Factors

The process of identifying partners in dropshipping differs from the traditional order fulfillment method. Since the seller has no obligation to make a purchase, he potentially has a greater choice of supplier partners.

However, in turn, this lack of financial incentive may influence the supplier's willingness to spend their time and money on meeting the supplier's needs.

Finally, due to the distributive nature of dropshipping, some components of the electronic data exchange process may not be entirely voluntary for the supplier.

The following two main factors need to be taken into account:

Logistics capabilities

When selecting a supplier to operate an online dropshipping store, sellers must ensure that the supplier can handle single order fulfillment and that its ability to do this work matches the needs of the seller, i.e. delivery times and express delivery options.

A supplier's ability to select a single item from a warehouse or fulfillment center is a prerequisite to participating in dropshipping. Sellers can appreciate this ability if the supplier offers direct order fulfillment through their own online store site.

Many suppliers underestimate the costs that will inevitably arise when moving to a new order fulfillment model, be wary of those who promise to switch to new system, but at your expense.

Technology options

Since both parties will spend time and resources to participate in dropshipping, with neither party making any commitment to specific numbers profits, it is very important to minimize the number of technical excuses for refusing to participate.

It is necessary to create technologies that will help exchange data with minimal costs or without them. This will allow partners to be divided into those with very little technical capabilities and those with a developed and functional e-commerce infrastructure. The usual communication options are as follows:

• self-service portal. (Don't discount handmade. More advanced technologies are attractive, but not always practical);
• non-integrated process batch processing;
• automatic integration based on the file system;
• web services (API, XML), automatic options.

The main thing is the consumer

We want to make you happy. Among all the problems and challenges, there is one common element - the buyer. Over the past five years, many brands and suppliers have begun selling directly to consumers. This equates the “delivery” part of the formula with the “sales” part of the same formula, in that the customer experience drives everything.

Consumers want descriptive product data, they want a seamless and clear ordering process, and they demand single-item order-level logistics that can be tracked and returned.

In short, the world of sales has turned consumer-centric, and this is leading to the development of new partnerships in the supply chain, especially relationships between those who would like to be on one side or the other of the dropshipping model in order to achieve success and prosperity.