Alibaba dropshipping guide for online sellers
Last updated: 09.10.2024
Read our in-depth guide on Alibaba dropshipping to expand your e-commerce business
Key takeaways
- Alibaba allows dropshipping. There’s a dedicated dropshipping page on Alibaba’s website to find reliable suppliers
- Look for popular, small-sized items with competitive pricing and a good profit margin
- Connect your Alibaba dashboard to your Shopify or WooCommerce store for automated order management
- Use the World Account to pay suppliers in China or collect payments from Chinese customers
Introduction
Alibaba is one of the biggest wholesale B2B marketplaces in China with 200 million products listed by over 200,000 suppliers.
Alibaba dropshipping is a popular fulfilment model that allows online sellers to outsource the complete handling and shipping of products. Sellers forward customer orders to their supplier, who is then responsible for shipping products directly to the customers.
You bypass the headaches of inventory management and hefty setup costs, but your margins also decrease significantly. So, there is definitely a trade-off.
Let’s take a look at everything you need to know about Alibaba dropshipping
Table of Contents
Does Alibaba allow dropshipping?
The short answer is, yes. Alibaba does allow dropshipping. There is a separate section on the Alibaba website that is dedicated to suppliers who can help you dropship products. Alibaba also lets you import the product list and other data automatically to your online store.
As compared to AliExpress which is a B2C platform, Alibaba offers wholesale prices. However Alibaba sellers usually require you to commit to a minimum order quantity (MOQ).
→ Take a look at our guide to AliExpress dropshipping and our head-to-head Alibaba vs AliExpress comparison.
How to dropship from Alibaba
Here are the steps to dropship from Alibaba:
Sign up on Alibaba
You can sign up on Alibaba through your email address and check Alibaba’s dropshipping page to find reliable suppliers. Signing up allows you to contact suppliers directly and import product information to your online store.
Find products
The first and most important step of a successful dropshipping model is to find the right products.
Here are some of the factors to consider when picking products for dropshipping:
Popular products with repeat potential: If you already have an online store, look into the most reordered products and find Alibaba suppliers who can offer a better price for those products. A customer making a repeat purchase is easier to convert than a new customer who has never bought anything from your store.
Small-sized products: Lightweight and smaller products are easier to ship and have lower shipping costs compared to heavy products, which can drastically reduce profit margins.
Pricing: Before you decide on a product, look into its average price on other retail marketplaces like Amazon. The online market is very competitive. For customers, pricing is just as important of a factor as product quality. If your prices are too high, you may struggle to get any orders, at all. Look for products on Alibaba that can give you a good 10-20% profit margin even after accounting for other dropshipping costs like supplier fees, marketplace fees, shipping, marketing, taxes and currency conversion.
Vet and finalise suppliers
When you know what products you want to dropship and at what budget, it’s time to look for suppliers who can accommodate your budget and offer high-quality products.
Here are a few tips to vet suppliers on Alibaba
- Look for verified sellers that offer Alibaba Trade Assurance (It is Alibaba’s in-house payment protection program that safeguards buyers by setting up escrows. When you place an order on Alibaba and make a purchase, the amount is held in an escrow and it is only released after you confirm that you have received the order)
- Ask sellers for documentation like business licence, factory inspection reports, factory images and compliance certificates
- Verify the business address and contact number of the seller
- Look for reviews on the supplier’s page
- Buy sample products to check for quality since you won’t get the chance to inspect products that will be shipped to customers
When you have found the right supplier, make sure to negotiate terms and pricing. In most cases, the pricing you see displayed on the product page isn’t final. There is always room for negotiation.
Connect to your store
Connecting your Shopify or WooCommerce online store to Alibaba allows you to import product data directly to your store. You can manage orders, shipments, and supplier payments through your Alibaba account’s dashboard.
→ Take a look at our complete guide on how to setup a Shopify store
To connect your store, follow these steps:
- Click on My Store present on the left panel of the Alibaba dropshipping dashboard
- Select whether your store is hosted on Shopify or WooCommerce (Note: Alibaba only supports direct integration with these two e-commerce platforms. If your online store is located on a different platform/marketplace, you will have to use a third-party tool to manage dropshipping like Dropified, Syncee and Modalyst)
- Add your store URL and install the ‘Dropshipping on Alibaba’ app on your Shopify/ WooCommerce store
Import product data to your online store
To import a product, go to the product page and click on ‘Add to Import list’
Once the products are in your import list, you can change the product title, description, images, pricing and fulfilment/shipping information. Review the products and click on ‘Push to store’ to take the products live on your store.
You can also view all the live products under the ‘My Products’ tab.
Fulfil orders with suppliers
The orders you receive on your online store will automatically get synced to your Alibaba dropshipping account. When you receive a new order, you’ll see them in the ‘My Orders’ tab. You can confirm the customers orders and pay suppliers. After the supplier ships the order, you can also share the shipping details automatically with customers.
Alibaba lets you cancel orders, confirm deliveries, track shipping statuses and request refunds through the platform.
Note: If you don’t have an online store yet and you are selling through marketplaces like Amazon and eBay, you can still dropship through Alibaba. Without a synced store, you’ll need to manually manage orders–add shipping details for each order and provide those details to customers.
Manage supplier payments and marketplace collections with your World Account
When you have suppliers based in China and customers worldwide, sending and collecting payments in multiple currencies can quickly become complicated. If you aren’t careful, currency conversion rates and international transaction fees can decrease your already thin profit margins.
WorldFirst is a one-stop global payment provider that supports online sellers and SMEs dealing with international trade. Your World Account is a multi-currency account that allows businesses to open 15+ local currency accounts for sending, receiving and holding funds in international balances. Supported currencies include GBP, USD, EUR, AUD, JPY, NZD, SGD, HKD, CNH and CAD.
The biggest advantage of WorldFirst is that you can collect marketplace payments and pay suppliers with the same account. WorldFirst also has partnerships with 130+ marketplaces and payments, allowing you to seamlessly collect payments from international customers.
You can use the CNH local currency account to pay Chinese suppliers or collect payments from Chinese customers.
With a World Account, you can save more and improve your profit margins as you expand your business globally.
- Open 10+ local currency accounts with local account details
- Direct CNH payments to 1688.com
- Pay suppliers, partners and staff in 40+ currencies and 130+ destinations
- Collect secure payments from 100+ marketplaces and payment gateways, including Amazon, AliExpress, Paypal and Shopify
- Lock in currency conversion rates for up to 24 months
Disclaimer: The information contained is general only and largely our views. Before acting on the information you should consider whether it is appropriate for you, in light of your objectives, financial situation or needs. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions, estimates, mentioned products/services and referenced material constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. WorldFirst shall not be responsible for any losses or damages arising from your reliance of such information.
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