How To Do Alibaba Dropshipping The Right Way

How To Do Alibaba Dropshipping The Right Way

Where to get products from in a dropshipping business is a tricky question. A good supplier can make you a fortune, whereas a bad one can burn a hole in your pocket.

Alibaba is one of the most popular dropshipping suppliers in the world. But is it a good option to get your products from?

In this article, we will decipher the above question. Along with that, we will also tell you how to find your winning product and how to import products from Alibaba to your Shopify store.

So let's get started! 

Outline

I. What Is Alibaba?

What is Alibaba

Jack Ma founded Alibaba in 1999. The platform gained popularity in no time and became the world's largest B2B eCommerce marketplace.

Alibaba's net revenue

Source

It's also the most popular destination for online shopping in the world's fastest-growing ecommerce market.

The Alibaba group operates four main sites. All of them are Chinese online marketplaces:

  • Taobao
  • Tmall
  • AliExpress
  • Alibaba.com  

They have an enormous user base and host millions of merchants and businesses. It currently claims 80% of online sales in China and holds an international market cap of $291.05 billion - more than that of eBay & Amazon combined. The company, which started with 18 people, now has over 22,000 employees.

Alibaba is a B2B online marketplace that helps connect exporters in China (or some other country) trade with companies in over 190 countries worldwide. The structure allows ecommerce stores worldwide to find manufacturers around the world and get products manufactured, packed, and shipped all across the globe.

Now, most people consider Alibaba & AliExpress as the same marketplace. But, this isn't the case! Let’s see how.

Alibaba vs. AliExpress - What’s the Difference?

Alibaba & AliExpress are sisters from the same parent company - Alibaba group. However, both offer unique buying and selling experiences. Each has different features for different types of buyers and sellers.

Alibaba vs. Aliexpress

AliExpress dropshipping is a cross-border B2C or retail marketplace that deals with individual customers like Amazon and eBay. It comes along with no order bracket and fixed prices – No negotiations! The platform provides faster delivery than Alibaba dropshipping. It also offers various services to enhance user experience, such as:

  • Automatic translation to 18 languages 
  • Conversion to currencies from 51 countries
  • Support for 38 local payment channels for secure payment and transaction
  • Custom storefronts for sellers
  • Buyer protection
  • AliExpress University offers learning resources for new sellers

On the other hand, Alibaba is a B2B marketplace, which means the potential buyers are other dropshipping businesses. Businesses primarily use it to source products in bulk from manufacturers, wholesalers, or traders. And that's why it has a minimum order cap preventing its most essential feature – Minimum Order Quantity!

Minimum Order Quantity (MOQ) is the fewest number of units a manufacturer or supplier is willing to sell to customers.

Since Alibaba is a B2B marketplace, the minimum order cap allows it to receive bulk orders from other businesses at wholesale prices, rather than attracting individual customers who are more likely to order a single unit.

 Alibaba also provides services such as:

  • International logistics
  • On-boarding support
  • Alibaba trade assurance - free order protection
  • Product inspection and monitoring

Now that you know what Alibaba actually deals in. Let's dive in to understand how you can build a profitable business with Alibaba dropshipping in 2022.

II. How to Dropship with Alibaba in 2022

Alibaba dropshipping is an excellent way to differentiate yourself from the competition. Here, you can find unique products and suppliers that aren't listed elsewhere.

Every dropshipping store’s journey starts with choosing the right product. Here’s how you should pick a product from Alibaba.

01. Choosing the Right Dropshipping Suppliers & Product with Alibaba

With proper product research, you land a better chance to find your winning product and prevent your business from risky situations in the near future.

Here are the 7 factors to consider while cherry-picking the best dropshipping products.

1.1. Product Variety

Product Variety generally consists of two forms of product – Hobbyist products & Business products.

Product variety

As the name suggests, Hobbyist products are the ones based on the hobbies people love. For example, many serious golfers have golf clubs that cost more than their cars, and folks who love to ride bikes might spend a fortune outfitting their bikes.

People love hobbyist products! 

These people don’t care about the money, all they want is a great product to serve their hobby right. So if you target the right hobbyist niche, you can find the best dropshipping products benefiting you. 

Whereas business products are more price-sensitive and have low-profit margins because they are ordered in bulk. Small businesses or corporate firms make these orders, and they are indeed a tough negotiator!

But once you're established and trusted by people, you can make a profitable business with these two types of dropship products.

1.2. Products with Repeat Purchases

Recurring revenue is the best part for any dropshipper!

Products with Repeat Purchases

If you sell reordered products frequently, you can grow as you build a loyal customer base that often returns to purchase. Here are some of the benefits why repeat customers are better than new ones:

  • Returning customers spend 67% more than new customers
  • Person making a repeat purchase is easier to convince - you can advertise a new product to them and see if they buy it
  • Depending on the industry you’re in, it might cost you 5-25% more when signing a new customer when compared to a repeat customer
  • Repeat customers are loyal and do word of mouth marketing for you

1.3. Light Weight / Small Size Products

In the era where free shipping is not limited to a price cap and is a must-have-thing for any ecommerce platform, it can be challenging to sell large, heavy equipment that costs a fortune to be shipped. Unlike large items, smaller items are more accessible to transit cheaply to your customers and often form the best dropshipping products.

So, while choosing a product to sell, try picking the one that’s lightweight and small in size (if your niche allows it).

1.4. Pricing

It's always easy to get stuck on pricing when launching a product. Your pricing should always cover up all your costs with an additional profit margin left for yourself.

Product Pricing

If you plan to set up your own online store for high-ticket dropshipping, make sure you can offer personalized customer service - pre-sale support, post-sale service, etc. But if you want to open a normal dropshipping store, the $50 to $300 price range is a sweet spot to maximize revenue without providing extensive pre-sale support.

1.5. Get Products You Can Upsell & Cross-Sell

Selling a product with additional accessories is a fantastic way to increase profit margin.

Suppose you are purchasing a smartphone from a retail store. You would preferably enquire in a number of online stores to find the best deal, right?

But, will you do the same to purchase a mobile cover? No, you won’t. Instead, you'll purchase the case from the same store without a second thought. That's human psychology in play!

When it comes to profitability, upselling and cross-selling are the two most important aspects of any dropshipping store. So much so that Amazon has reported that 35% of its revenue comes from upselling and cross-selling.

1.6. Sell a Product that’s Hard to Find 

Selling a product that's hard to find in retail stores often proves to be among the best dropshipping products. Most people needing a garden sprinkler would simply run down to the local hardware store. But where would you buy a 90's costume or a horse halter? You'll probably dive into Google and start searching.

If you target products that are “less known” but in demand, you can earn some serious money!

1.7. MAP Pricing

MAP refers to the Minimum Advertised Price manufacturers set for their dropshipping products. The MAP acts as a price-flooring and allows resellers to price their products at or above it.

This price flooring prevents frequent price wars, especially for dropshipping products and helps ensure that merchants can make a reasonable profit by carrying a manufacturer's product.

If you can identify a niche where manufacturers impose MAP pricing, it's a win-win situation, especially if you plan on building a highly engaging and information-rich site.

02. Integrating Alibaba with Shopify: A Step-by-Step Guide

Until now, we have understood how to cherry-pick winning products from Alibaba.com. 

Now what? Wouldn't it be great if you could integrate your Shopify store with Alibaba dropshipping? The supplier will automatically receive the receipt copy of the products ordered and start the dispatch process. All you have to do is sit tight and monitor things.

Here’s a step-by-step guide from finding the best Alibaba suppliers to importing products into your Shopify store, everything in one place. Let’s dive in.

Step 1: Visit Alibaba.com

Visit the Alibaba store and Signup / Sign in with your account.

Sign up or sign in alibaba

Step 2: Start Your Search for Suppliers

Type in the product name or the keyword in the search bar to find products you want to sell. You can then choose among the options in the left sidebar to hone in on a suitable supplier.

Start your search for suppliers

It's a good idea to filter out suppliers based on:

  • Verified mark
  • Trade assurance
  • Ready-to-ship inventory
  • Fast dispatch

Suppliers who fulfill these criteria are the good ones.

Step 3: Compile a List of Potential Suppliers

Finding the right suppliers is a hell of a job! You may not find the perfect supplier at one go. For example, some might:

  • Be unable to meet your verification requirements
  • Lack inventory or capacity to take on bulk orders
  • Have unacceptable terms or deny to negotiate

So, it’s best to compile a list of potential suppliers who comply with your business requirements. A good supplier is the one who:

  • Sells the product you want
  • Offers a minimum order quantity of 1
  • Offers affordable pricing
  • Provides trade assurance
  • Is Open for negotiations
  • Has good reviews

Step 4: Contact Suppliers

Once you have 5-10 suppliers on your list, it's time to contact them. You can either send your inquiry by clicking on the Contact supplier button, as shown in the below image.

Contact Suppliers

Or, scroll down to the bottom and send a personalized message to your supplier from the message box as shown.

Send message to contact supplier

Here's a message template that you can use to connect with suppliers and inquire about the products

Hi,

We’re looking for a great supplier who can supply us [product name]. Our dropshipping store is based in the US, and we target the US market.

I’m [name], [your designation] of XYZ company.

Here are some questions I’d like you to answer:

  • What is your minimum order quantity (MOQ)?
  • What is the cost per unit you can provide if we order [X] units?
  • The shipping costs and time you’d take?
  • What payment method do you use?
  • Do I get trade assurance with your products?

We can kick things off with a sample order. Do let me know how much it will that cost to ship it to [your address]

Cheers!

Mathew

XYZ Company

[Website]

[Number]

Step 5: Payment Methods Agreement

Alibaba use 4 payments methods:

  • Bank Transfer: T/T payments made to Chinese banks
  • Alibaba Trade Assurance (ESCROW): Pays the supplier only when the buyer confirms satisfactory delivery of the product
  • Credit / Debit Card: Includes all the major processors like MasterCard, Visa, and American Express
  • PayPal: Not all, but some dropshipping suppliers accept payments via Paypal

Step 6: Import Products from Alibaba to Your Shopify Store with Importify

Importify is a dropshipping app that allows you to find a variety of products from various wholesale marketplace and manufacturers globally, add them to your Shopify store, and sell them online.

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It saves you ample time and lets you focus on making more sales and managing your business. Here’s how you can integrate Importify with your Shopify store.

Visit the Shopify App store, search for Importify and click on ‘Add app’ to add it to your store.

Import products from Alibaba to your Shopify store

Install the Importify app and subscribe to the best-suited plan as per your business requirements.

Pro tip: Importify premium plan is the most recommended plan to begin your dropshipping business.

Step 7: Select Products to Import

Head back to Alibaba.com and select a product you would like to add to your store.

Suppose you want to sell electric bicycles. Search for Electric Bicycles on Alibaba and Click on the product you want to sell.

Select Products to Import

As the product page appears, click on the ADD tag on the top left-hand side of the page.

Add product to store

The Importify editor will open up, as shown below. You can change the title, description, or product price as per your business requirements.

Link product to a specific collection

You can also link the product to a specific collection in your Shopify store.

Step 8: Add Product to Your Shopify

Once you’re done customizing the product description, scroll down and click on Add to Your Shopify button to add the product to your store.

Add Product to your Shopify

Step 9: Customize Your Product Details

Since now the products are imported to your Shopify store, make sure to customize them as per your business requirements. Change the title, pricing, description, MOQ, and more.

Customize your product details

And with that, your Shopify store is successfully integrated with Alibaba.

Repeat the process to keep adding high quality products to your store.

III. Pros & Cons of Using Alibaba

Many businesses have achieved success with Alibaba dropshipping. However, like any other platform, there are advantages and downsides you should be mindful of.

01. Pros

  • Low Manufacturing Cost: Manufacturing costs in Asia are competitively low, giving you a good chance to find a product for your ecommerce store with a high-profit margin
  • Product Varieties: It’s hard to not find a product on Alibaba that comes to mind while dropshipping
  • Verified Suppliers: An extensive database of verified suppliers from around the world to fulfill your order requirements without getting stuck
  • Negotiable Prices: Unlike other dropshipping platforms, Alibaba allows you to negotiate product prices with suppliers and find the best deal
  • Trade Assurance Protection: If there is a conflict of interest between you and your supplier, Alibaba acts as a mediator to resolve the issue in the best way possible

02. Cons

  • Longer Shipping Time: It can take longer to ship products via Alibaba as compared to other dropshipping platforms
  • Complicated Return Process: Despite the trade assurance provided by Alibaba, it also has a lengthy return process which might take months and a lot of documentation to resolve

IV. Is It Safe to Use Alibaba?

When it comes to dropshipping, the platform is completely safe and secure.

Yes, there are some cons attached to the platform, but the same can be said for every other online platform. After all, perfection is a myth!

Alibaba dropshipping provides a cost-effective way to find products to sell online. You can find almost every product idea you have in there.

However, one needs to be cautious and do business with trusted suppliers. Rest assured, Alibaba has got your back. 

V. Ready to Start Your Dropshipping Business with Alibaba?

Sourcing products for your dropshipping business from Alibaba can be challenging and time-consuming. But, once mastered, it can facilitate you with fantastic deals on bulk B2B purchases.

You need to make sure to verify the legitimacy of any dropshipping supplier before placing orders. If things don't feel right, move on to the next best supplier - with Alibaba, there's always a way to find a product quality your audience will love.

So put your foot on the gas and start a successful dropshipping business with Alibaba today!

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