Dropshipping from China has always been a term that teases e-commerce starters due to the potential huge profit margins, and the ability to sell without investing in inventory in advance. But when we get to start paid ads campaigns, it gets ugly most of the time.
So: Is dropshipping from China still profitable in 2020?
If I say no, I’d be lying. But to say yes without giving further explanation will do you no good. It’ll only enforce insecurities into your head when you start testing and not break even on your ads.
To better help you understand what it takes to dropship from China and still be profitable, we’ll need to go through the downside of it, and reverse engineer the whole thing to see how we can do it right.
The cons of dropshipping from China:
Long Shipping Times:
As a dropshipper, you want your customer to get their orders within 7 days, so it’ll be easier for you to secure a second and a third order from them. Because if you’re running ads to get one order from a customer without thinking of the customer’s lifetime value, you won’t make it big in the e-commerce world.
Most of the suppliers a typical starter usually work with process orders within 3 days. Some take 5 days, and others can even process them in 7 days. And that’s VERY BAD.
You yourslelf won’t forward the order to the supplier until a couple days have gone by since the order was processed.
And to consider that with ePacket you can deliver the order to the customer in 7-20 days. That will leave you with 17-30 days. Which is way too long. And that would probably get you a few chargebacks.
Returning products is a huge Problem:
One of the worst situations you’ll ever have to handle as a dropshipper is customers wanting to return the products either for a refund or a replacement. And when you’re dropshipping from China, you’re in deep trouble.
First of all, you have no idea what’s your supplier’s address (and good luck trying to get that information).
The second problem is: you got the high shipping price from the USA to China, which your customer won’t accept to pay. And even when you send back the item to the sender with your own money, the parcel is lost on the way most of the time.
Then you’ll go back to your supplier asking for a refund, and guess what? You’re not getting anything from your supplier. Most of them won’t even bother texting you back.
So at the end of the day, you’ll find out that you got out of this troublesome situaltion with no profit at all.
Last year’s summer, The President of The United States Of America Donal Trump has ordered that US companies leave China. You can learn more about this topic at Forbes.
So you mght be wondering: I’m only dropshipping from China. How would that affect me?
Well, if the USA is planning to escalate the trade war with China, any company in the world that exports goods of any kind from China to the US is not safe from that trade war. Your customers will have to pay tariffs. It can even get worse if other countries join the US in their trade war, especially after the serious claims that China is responsible for the spread of COVID-19.
To be honest, it all looks a bit shady, and if Donald Trump got re-elected, you’ll have to upper your e-commerce game and find suppliers in the US and other areas of the world.
when to dropship from China?
When Testing Proucts
If you’re just getting started with the process of testing, you can always use a supplier from AliExpress or DHGates to fulfill your first orders, but once you’re starting to get promising numbers from the product you’re testing, and start thinking of scaling, you should absolutely find you a supplier that has stock in the US or whatever country you’re mainly targeting.
There’s still risk that you may get a few chargebacks, but if you can’t find a local supplier before starting to test, just give it a try it out.
When you’re working with a reliable supplier or agent:
If you’re an experienced dropshipper that’s already working with a supplier from China, and you’re satisfied with the shipping time, the packaging, and the quality of the products, you can keep dropshipping from China. But you should certainly keep an eye on the trade war, COVID-19, and the US presidential elections.
If you’re just getting started and confused about what makes a supplier reliable, here it is:
- The supplier provides fast 7-10 days shipping to the USA.
- The supplier ships replacements free of any charge. Which indicates the quality is guaranteed.
- The supplier is willing to go the extra mile to keep working with you.
- The supplier’s English language and communication skills are good.
You may as well find suppliers from China that have a warehouse in the US and sometimes Europe.
You can also take a look at CJ Dropshipping and ZenDrop. They have apps that will help you automate the process of fulfilling your orders, so you won’t have to deal with CSVs or fulfill each order one at a time.
Dropshipping from China can be a tough pill to swallow sometimes. But if you can handle the pressure, you can always come out on top.
If you need our help optimizing your Shopify store’s conversion rate or getting you more customers through paid ads, feel free to reach out to us. We’ve helped many dropshippers succeed, and we believe you can succeed with the help of our team.