Scaling A Dropshipping Store

[Frost]

Hello,

I've been running a dropshipping store for a couple of months now, using Pinterest ads. The product that I started with seems to be doing well, but it needs more optimization (margins, conversion rate, ROAS) to be worth it.

I took the opportunity to start looking for agents in China in order to see if I can reduce my COGS. I contacted a few on Alibaba and they all gave me quotations equal or slightly higher than what I currently pay on Aliexpress for the same product! I found it baffling, especially given that the major part of the cost (75% in this case) was for shipping to Europe, which I assume also includes their fees.

Does anyone have experience in dealing with agents in China? I had no idea what to expect but it seems like a ripoff to be honest. For context I'm still at 1-2 orders per day on average, my product is a bag of around 0.25 Kg, and they're charging me >7$ for shipping. I also checked Alibaba to order an initial stock and start shipping it myself, but again the shipping costs are too high.

Thank you,

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walter Hay]

I am not sure what you mean by "agents".

Advertisers on Alibaba an Aliexpress are rarely agents, but very often traders that don't carry inventory and shop around genuine manufacturers for one that will supply the product they have advertised. They then add their profit margin and quote you.

I suggest you have a look at my AMA thread"

Sharing my lifetime experience in export/import. Product sourcing specialist.​

You should at least read the first 5 posts and then start at the end and work backwards. Those early posts will show you why you should look at the latest information. You need to keep up to date. So many changes occur in the sourcing and importing scene that I revise my book every year.

I am happy to help, and to start with, let me say that you would do well to hold off until you have learned something about sourcing and importing.

I don't encourage dropshipping as a viable business model, but if you are determined to proceed, you will probably find it easier at first to buy from Aliexpress vendors who include shipping. Before long you can buy small quantities direct from manufacturers at much better prices, but be aware that you are unlikely to find the real manufacturers of the products you have bought on Aliexpress.

Walter

 

[Frost]

I am not sure what you mean by "agents".

Advertisers on Alibaba an Aliexpress are rarely agents, but very often traders that don't carry inventory and shop around genuine manufacturers for one that will supply the product they have advertised. They then add their profit margin and quote you.

I suggest you have a look at my AMA thread"

Sharing my lifetime experience in export/import. Product sourcing specialist.​

You should at least read the first 5 posts and then start at the end and work backwards. Those early posts will show you why you should look at the latest information. You need to keep up to date. So many changes occur in the sourcing and importing scene that I revise my book every year.

I am happy to help, and to start with, let me say that you would do well to hold off until you have learned something about sourcing and importing.

I don't encourage dropshipping as a viable business model, but if you are determined to proceed, you will probably find it easier at first to buy from Aliexpress vendors who include shipping. Before long you can buy small quantities direct from manufacturers at much better prices, but be aware that you are unlikely to find the real manufacturers of the products you have bought on Aliexpress.

Walter

Thank you for your response. I started reading your thread yesterday, there's a lot of value in there!

By "agents" I mean someone who will source the product for me, and handle the fulfillment as well. I started by finding a product on Aliexpress at a reasonable cost and I'm shipping directly to the customers. Now that I want to scale, I'm looking for a more reliable and scalable fulfillment method, hence the agents, with the possibility of reducing my product cost and increasing my margin.
The other alternative would be for me to handle a small stock in France and do the fulfillment myself until I move to a fulfillment center and then I will have to look into the whole sourcing process myself. The first option seems a lot safer with less commitment for a beginner like me. What are your thoughts on that?

 

[Walter Hay]

Thank you for your response. I started reading your thread yesterday, there's a lot of value in there!

By "agents" I mean someone who will source the product for me, and handle the fulfillment as well. I started by finding a product on Aliexpress at a reasonable cost and I'm shipping directly to the customers. Now that I want to scale, I'm looking for a more reliable and scalable fulfillment method, hence the agents, with the possibility of reducing my product cost and increasing my margin.
The other alternative would be for me to handle a small stock in France and do the fulfillment myself until I move to a fulfillment center and then I will have to look into the whole sourcing process myself. The first option seems a lot safer with less commitment for a beginner like me. What are your thoughts on that?

As a general rule I would recommend that you handle the sourcing yourself. Using a Chinese sourcing agent is never a good idea because there are too many ways they can take advantage of you.

A sad but good example of this has come to my attention today. A Fastlane member has been using the services of what was a first class Chinese sourcing agent, Jing Sourcing. They were the only ones I have ever recommended and until now they have given excellent service, but there has been a change of management and service has become very bad.

I am writing to Jing Sourcing today informing them that I am removing their link from my sourcing book. I am also posting this in my AMA so that all members who have a copy of my book will know that I and one of my book buyers have been let down by Jing Sourcing.

Walter

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Frost]

As a general rule I would recommend that you handle the sourcing yourself. Using a Chinese sourcing agent is never a good idea because there are too many ways they can take advantage of you.

A sad but good example of this has come to my attention today. A Fastlane member has been using the services of what was a first class Chinese sourcing agent, Jing Sourcing. They were the only ones I have ever recommended and until now they have given excellent service, but there has been a change of management and service has become very bad.

I am writing to Jing Sourcing today informing them that I am removing their link from my sourcing book. I am also posting this in my AMA so that all members who have a copy of my book will know that I and one of my book buyers have been let down by Jing Sourcing.

Walter

Is the problem in the sourcing or in the fulfillment part? In my case for example the quotation for the product itself (purse) was around $3, which is what I could find on Alibaba, but they were charging $7 for shipping, which I found to be a rip-off.

I don't mind if I don't get the absolute cheapest sourcing there is if it means that I can let this agent handle all the work for me, while fulfillment from Europe would certainly cost me more money, time, and effort. This is something that I would consider when I decide to create my own brand.

 

[Walter Hay]

Is the problem in the sourcing or in the fulfillment part? In my case for example the quotation for the product itself (purse) was around $3, which is what I could find on Alibaba, but they were charging $7 for shipping, which I found to be a rip-off.

I don't mind if I don't get the absolute cheapest sourcing there is if it means that I can let this agent handle all the work for me, while fulfillment from Europe would certainly cost me more money, time, and effort. This is something that I would consider when I decide to create my own brand.

Normally a sourcing agent would handle the shipping, but if you do the sourcing yourself, you simply ask the manufacturer to quote you a price including delivery to your address or a price FOB.

Depending on the size and value of the shipment, delivery could be by Air Courier, in which case the courier handles the Customs clearance, pays the duty and VAT on your behalf, collects payment of that duty and VAT from you, and then delivers to your door.

For larger shipments you should get a price quoted for FOB, and then arrange for a freight forwarder in your country to handle the shipment for you. It is important to get a quote from a forwarder that includes all charges door to door, including Customs clearance.

Finally, it is not unusual for freight cost to exceed the cost of the item(s).

Walter

 

[fast ben]

Is the problem in the sourcing or in the fulfillment part? In my case for example the quotation for the product itself (purse) was around $3, which is what I could find on Alibaba, but they were charging $7 for shipping, which I found to be a rip-off.

I don't mind if I don't get the absolute cheapest sourcing there is if it means that I can let this agent handle all the work for me, while fulfillment from Europe would certainly cost me more money, time, and effort. This is something that I would consider when I decide to create my own brand.

Hey buddy, I can answer this question for you, I'm from China and MY English is poor, so don't mind if I use a translator. The company I work for is a seller of Alibaba, and my colleague is the agent you mentioned, but I have more personal experience in Shopify and Ads. First of all, we can be sure that this is not a scam. There are many channels for small parcel logistics, and the price and time limit of each channel is different. Many experienced Dropshippers specify the shipping channel, and they have a general idea of shipping costs. Freight is often updated. In q3-Q4, all logistics companies tend to have soaring prices, Q1 is often low, so Alibaba sellers tend to offer you high prices in the near future when they offer you freight, they will consider the risk of price increases, Dropshipping uses logistics channels completely different from high weight. Take YanWen and Yun Express, which ARE commonly used by me, for example, the freight cost of a 0.25kg small package to Europe is about $6-7 (different for each country). Different from Ali express sellers, Alibaba sellers are used to wholesale and have little interest in small quantities of goods. In fact, in my opinion, the best way to lower the price is to expand your sales scale. The larger the quantity of goods you need, the stronger the bargaining power. After you tried 10 agents, will always find the right, at an early stage, of course, I do not recommend you do so, you should be more focused on how to sell more goods, at least it is my present (because I also want to go to the factory) unless you already have a sustainable development of niche markets, a stable agent is very important at this time.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Walter Hay]

@Frost, It seems that you don't have a website, but if you are using Shopify you can simplify the whole process by using Oberlo, which is their dropship program.

I suggest that you look up Shopify/Oberlo and see how it works..

It certainly won't link you to vendors on Alibaba, because Alibaba sellers don't dropship. They will sell small quantities if you know how to persuade them to accept orders smaller than their MOQ, as many of my book readers have been able to do.

I defintely don't recommend adding a Chinese forwarding company to mix. That will only complicate matters for you.

Walter
P.S. I repeat that I don't encourage dropshipping as a viable business model, because buying from Aliexpress vendors as recommended by Shopify means you are paying more per unit. It is far better to buy from real manufacturers, avoiding the margin added by the Aliexpress vendors. You can bank that margin.

 

[João Vitor]

Hello,

I've been running a dropshipping store for a couple of months now, using Pinterest ads. The product that I started with seems to be doing well, but it needs more optimization (margins, conversion rate, ROAS) to be worth it.

I took the opportunity to start looking for agents in China in order to see if I can reduce my COGS. I contacted a few on Alibaba and they all gave me quotations equal or slightly higher than what I currently pay on Aliexpress for the same product! I found it baffling, especially given that the major part of the cost (75% in this case) was for shipping to Europe, which I assume also includes their fees.

Does anyone have experience in dealing with agents in China? I had no idea what to expect but it seems like a ripoff to be honest. For context I'm still at 1-2 orders per day on average, my product is a bag of around 0.25 Kg, and they're charging me >7$ for shipping. I also checked Alibaba to order an initial stock and start shipping it myself, but again the shipping costs are too high.

Thank you,

Hi, dude! I'm new in this market, and I want to start a dropshiping and PNL using the Pinterest ads (I'm from Brazil, and the Pinterest ads is starting to make sucess here, making the leads more cheap then Facebook Ads), do you have any tips to help me? Like the more profitable products and the diferences of Pinterest ads and Facebook ads. Thanks for you atention.

 

[Frost]

@Frost, It seems that you don't have a website, but if you are using Shopify you can simplify the whole process by using Oberlo, which is their dropship program.

I suggest that you look up Shopify/Oberlo and see how it works..

It certainly won't link you to vendors on Alibaba, because Alibaba sellers don't dropship. They will sell small quantities if you know how to persuade them to accept orders smaller than their MOQ, as many of my book readers have been able to do.

I defintely don't recommend adding a Chinese forwarding company to mix. That will only complicate matters for you.

Walter
P.S. I repeat that I don't encourage dropshipping as a viable business model, because buying from Aliexpress vendors as recommended by Shopify means you are paying more per unit. It is far better to buy from real manufacturers, avoiding the margin added by the Aliexpress vendors. You can bank that margin.

Hey Walter,

I do have an online shop, which is a website, or do you have something else in mind when you say website?

Thanks for the tip on Oberlo, I will check it out.

Dropshipping is definitely not a viable and long-term business model. I'm using it as a stepping stone to get into the world of e-commerce and business in general and to start making enough money to leave my job and focus on proper brand building which includes sourcing directly from manufacturers and having a longer-term plan in mind.
That being said, what I'm trying to do here is to take an intermediary step, where I have someone handling my stock and fulfillment for me to reduce costs and improve scalability and service quality. I hope that clarifies my initial question.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Frost]

Hey buddy, I can answer this question for you, I'm from China and MY English is poor, so don't mind if I use a translator. The company I work for is a seller of Alibaba, and my colleague is the agent you mentioned, but I have more personal experience in Shopify and Ads. First of all, we can be sure that this is not a scam. There are many channels for small parcel logistics, and the price and time limit of each channel is different. Many experienced Dropshippers specify the shipping channel, and they have a general idea of shipping costs. Freight is often updated. In q3-Q4, all logistics companies tend to have soaring prices, Q1 is often low, so Alibaba sellers tend to offer you high prices in the near future when they offer you freight, they will consider the risk of price increases, Dropshipping uses logistics channels completely different from high weight. Take YanWen and Yun Express, which ARE commonly used by me, for example, the freight cost of a 0.25kg small package to Europe is about $6-7 (different for each country). Different from Ali express sellers, Alibaba sellers are used to wholesale and have little interest in small quantities of goods. In fact, in my opinion, the best way to lower the price is to expand your sales scale. The larger the quantity of goods you need, the stronger the bargaining power. After you tried 10 agents, will always find the right, at an early stage, of course, I do not recommend you do so, you should be more focused on how to sell more goods, at least it is my present (because I also want to go to the factory) unless you already have a sustainable development of niche markets, a stable agent is very important at this time.

Hey @fast ben,

Thanks for your answer. I've always heard that Aliexpress prices are at the upper end of the spectrum of what you can get for a product, and I was surprised when the dropshipping agent gave me a similar price. Do you find this normal?

Just to be clear I'm not contacting Alibaba sellers/manufacturers directly. I'm contacting dropshipping agents who are posting their services on Alibaba, and who are looking for dropshippers to work with.

So essentially you recommend that I wait until I have more orders per day on a reliable basis before looking for an agent? Do you think it's completely impossible to reduce my product cost by going through an agent rather than through Aliexpress (which is barely a short-term solution anyway)?

Thanks!

 

[Frost]

Hi, dude! I'm new in this market, and I want to start a dropshiping and PNL using the Pinterest ads (I'm from Brazil, and the Pinterest ads is starting to make sucess here, making the leads more cheap then Facebook Ads), do you have any tips to help me? Like the more profitable products and the diferences of Pinterest ads and Facebook ads. Thanks for you atention.

Hey @João Vitor,

I'm new in this market as well! I've never tried Facebook ads. I went for Pinterest from the start because a friend of mine who did a lot of dropshipping on Facebook told me that it was getting more and more difficult with the automatic bans that it wasn't worth it anymore, especially for a beginner.

Pinterest has many advantages, mainly that it has a large audience of women, and that people are not repelled by ads like Facebook, but they actually like seeing them on Pinterest since it corresponds to something they're actively searching for and are interested in. The disadvantages are that it doesn't have the same volume as Facebook and that people might see your ads, save it and maybe buy later. This means that you can't reliably analyze day-by-day, but more like week-by-week.

Products that seem to work are related to women-friendly niches, like decoration, beauty products, accessories, etc... But some of these are already pretty saturated. I personally tested 2 products, one completely flopped and I stopped the ads immediately, while the other seems to be working but it's dying out now. I'm going to test different products in the coming weeks and see how it goes.

Good luck with your journey!

 

[João Vitor]

Hey @João Vitor,

Também sou novo nesse mercado! Eu nunca tentei anúncios no Facebook. Fui para o Pinterest desde o início porque um amigo meu que fazia muito dropshipping no Facebook me disse que estava ficando cada vez mais difícil com os banimentos automáticos que não valia mais a pena, principalmente para um iniciante.

O Pinterest tem muitas vantagens, principalmente porque tem uma grande audiência de mulheres, e que as pessoas não são repelidas por anúncios como o Facebook, mas eles realmente gostam de vê-los no Pinterest, pois corresponde a algo que eles estão procurando ativamente e estão interessados. As desvantagens são que ele não tem o mesmo volume que o Facebook e que as pessoas podem ver seus anúncios, salvá-los e talvez comprar mais tarde. Isso significa que você não pode analisar de forma confiável dia a dia, mas sim semana a semana.

Produtos que parecem funcionar estão relacionados a nichos voltados para mulheres, como decoração, produtos de beleza, acessórios, etc... Mas alguns deles já estão bastante saturados. Eu pessoalmente testei 2 produtos, um fracassou completamente e parei os anúncios imediatamente, enquanto o outro parece estar funcionando, mas está morrendo agora. Vou testar produtos diferentes nas próximas semanas e ver como corre.

Boa sorte com a sua viagem!

Thank'u, man! I will make some tests, and if you want, I can share my results and conclusions to you (I think to post all my thoughs here in the forum to everyone, I want to help who helped me). The brazilian's market is diferent to the american's market, but they are simmilar each other, I want to get the strategys of USA and addaptating them here. Good luck to you too!

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[ohmamecr]

profesional dropshipper say that you need to deal with an agent at 30 orders per day

 

[ohmamecr]

Btw, would you recomend me pinterest ads?

 

[André Mariano]

Hello,

I've been running a dropshipping store for a couple of months now, using Pinterest ads. The product that I started with seems to be doing well, but it needs more optimization (margins, conversion rate, ROAS) to be worth it.

I took the opportunity to start looking for agents in China in order to see if I can reduce my COGS. I contacted a few on Alibaba and they all gave me quotations equal or slightly higher than what I currently pay on Aliexpress for the same product! I found it baffling, especially given that the major part of the cost (75% in this case) was for shipping to Europe, which I assume also includes their fees.

Does anyone have experience in dealing with agents in China? I had no idea what to expect but it seems like a ripoff to be honest. For context I'm still at 1-2 orders per day on average, my product is a bag of around 0.25 Kg, and they're charging me >7$ for shipping. I also checked Alibaba to order an initial stock and start shipping it myself, but again the shipping costs are too high.

Thank you,

I can't help you but I have a question!

Why Pinterest ads?

why not good old facebook and google?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Frost]

Hi @André Mariano and @ohmamecr ,

Like I said before, Pinterest ads have their advantages and disadvantages compared to Fb ads. The course I took was Pinterest based on a friend's recommendation.

 

[André Mariano]

Hi @André Mariano and @ohmamecr ,

Like I said before, Pinterest ads have their advantages and disadvantages compared to Fb ads. The course I took was Pinterest based on a friend's recommendation.

my bad didn't see that you had talked about it
will read the full thread before asking more questions

 

[Walter Hay]

The company I work for is a seller of Alibaba, and my colleague is the agent you mentioned,

How could you know which "agent" the OP was referring to? He did not mention any name.

Walter

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[fast ben]

Hey @fast ben,

Thanks for your answer. I've always heard that Aliexpress prices are at the upper end of the spectrum of what you can get for a product, and I was surprised when the dropshipping agent gave me a similar price. Do you find this normal?

Just to be clear I'm not contacting Alibaba sellers/manufacturers directly. I'm contacting dropshipping agents who are posting their services on Alibaba, and who are looking for dropshippers to work with.

So essentially you recommend that I wait until I have more orders per day on a reliable basis before looking for an agent? Do you think it's completely impossible to reduce my product cost by going through an agent rather than through Aliexpress (which is barely a short-term solution anyway)?

Thanks!

The price of AliExpress is indeed relatively high, I will choose products on it, but I usually do not place an order on it. Because AliExpress faces retail customers, Alibaba faces wholesale customers.
Dropshipping agents are available on AliExpress and Alibaba. They are familiar with dropshippers and have relative experience, so the price may naturally be higher. The two platforms are also very closely related. Alibaba will send an AliExpress platform a few years ago. Many companies have both platforms. You can try to search for some sellers’ store names on one platform, and they may also appear on another platform.
In short, different industries, different categories, and even sellers in different regions may have very different situations. When I buy goods, I will basically be in 1688. This is completely facing our country. Of course, this platform also belongs to the Alibaba empire. Many companies will do all three platforms, and more than that, including foreign platforms such as amazon.
So I personally think that when you have enough orders, you have the right to choose and you will have enough bargaining power. This time is a good time to reduce procurement costs. Wholesale sellers like to capture large volumes of customers. always

 

[fast ben]

How could you know which "agent" the OP was referring to? He did not mention any name.

Walter

LOL， the translater was wrong, I mean one of the agents, not the agent

 

[Tighe]

Hello,

I've been running a dropshipping store for a couple of months now, using Pinterest ads. The product that I started with seems to be doing well, but it needs more optimization (margins, conversion rate, ROAS) to be worth it.

I took the opportunity to start looking for agents in China in order to see if I can reduce my COGS. I contacted a few on Alibaba and they all gave me quotations equal or slightly higher than what I currently pay on Aliexpress for the same product! I found it baffling, especially given that the major part of the cost (75% in this case) was for shipping to Europe, which I assume also includes their fees.

Does anyone have experience in dealing with agents in China? I had no idea what to expect but it seems like a ripoff to be honest. For context I'm still at 1-2 orders per day on average, my product is a bag of around 0.25 Kg, and they're charging me >7$ for shipping. I also checked Alibaba to order an initial stock and start shipping it myself, but again the shipping costs are too high.

Thank you,

This has been a great thread to read. Any updates with how things are going with sourcing and what not?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.