Most successful dropshipping stores don’t stay dropshipping stores for long. Instead, they transition from dropshipping into ordering in bulk as soon as they can. They simply use dropshipping as a stepping stone to take their business to the next step.

In this article, I’m going to cover why you should purchase in bulk, when you should transition into bulk orders and which options will best suit your business when making a large order from China.

When Should you Stop Dropshipping and Buy in Bulk?

Because purchasing products in bulk is risky due to the fact you are outlaying a large sum of money without any guarantees they will sell, it’s important to know when you should stop regular dropshipping from China and make the switch.

You will never be 100% sure of this, however, you want to feel as confident as possible that there is a high probability that you can sell your products at a profit.

To do this you need to validate the potential of a product or niche by testing it with dropshipping initially. The beauty of dropshipping is its low risk due to the fact that you can sell products without purchasing them first. Don’t underestimate how important it is to be able to test products first so you can mitigate the risk.

Consider the risk people take when opening a restaurant without any guarantees the restaurant will succeed. Imagine if they were able to open a restaurant for free first, see how many customers they’ll get and then decide whether to open. Every restaurant entrepreneur would take that offer.

As a dropshipper you have that luxury so take advantage of it. Never assume a product will sell without testing it first.

I like to test multiple products at a time and slowly optimize those products by changing various aspects. I’ll make multiple changes until I find the most optimal method of profitability for that product. These are the types of changes I may make depending on how the product is performing:

Test multiple ad creatives
Change the ad platform
Change the product page
Change the product video or images
Test multiple offers
Change the angle at which I am selling the product

Each of these changes is completely different and it will really depend on how the product is performing to know when and which changes I will make. Once I feel like I have fully optimized a product, I’ll see how consistent the sales are.

A good indication of when to switch from regular dropshipping to purchasing in bulk is when your product is consistently profitable with Facebook ads for between 2 to 6 weeks. This will naturally vary for every person and product.

If you’re a more seasoned dropshipper, you may have more of a gut feeling of what will and won’t work and will jump in quickly without too much concern. Some people are far more inexperienced or more risk-averse and want to be as confident as possible before risking several thousand dollars on a large order

Don’t try to scale your business whilst you are still dropshipping from AliExpress. I have heard many horror stories of people doing this and it’s just not worth the risk. Once you move away from AliExpress dropshipping you can scale your business to the moon if you choose.

Purchase the product in bulk from China

There are 2 main options to choose from when purchasing in bulk:

Alibaba

Alibaba is AliExpress’s sister company, except they predominately deal with large orders. Alibaba suppliers are generally far more reliable and the products are of higher quality. Every product has a MOQ (Minimum order quantity) which will vary for each product. This can range from 20 to 10,000 depending on the product and the supplier.

As with AliExpress, you’ll want to do your due diligence when deciding on which supplier to want to work with. There are 2 main types of suppliers you’ll work with on Alibaba:

Manufacturers – These are the companies that own the factory and produce the product. Each manufacturer will vary in terms of size, machinery and product quality.
Trading Companies – Trading companies act as a middleman between yourself and the manufacturer. They purchase products in bulk at a discounted price from the manufacturer and mark up the prices.

The advantage of a manufacturer is you’re going straight to the source and avoiding middlemen to get the best price possible. The disadvantages are sometimes they will have a very large MOQ, their range of products may not be as large and they can be harder to find.

Because trading Companies source their products from multiple manufacturers, they tend to have a larger range of different products. Along with the fact that you can order a smaller MOQ, they tend to have better English speaking workers to deal with, which can make queries and price negotiating much easier.

Many suppliers on Alibaba will act as both, a manufacturer and a trading company. This means they produce some of the products as well as purchase from other manufacturers in bulk to improve their range of products.

I’d recommend dealing directly with manufacturers if possible. In my opinion, the pros outweigh the cons and I want to avoid middlemen as much as possible.

A few tips I’ll give if you’re contacting suppliers on Alibaba:

Make a new email address and use that to sign up with Alibaba otherwise you’ll be bombarded with spammy emails.
Don’t assume the price and MOQ is set in stone, everything is negotiable.
Always contact a minimum of 3 suppliers, once you negotiate the best price, send the other suppliers a screenshot of the deal and try to get a better deal.
Don’t sound like a beginner, always tell them you’re an experienced team of dropshippers.
Ask for a free sample, they may not send it for free but they may just want you to pay for shipping.
Ask if they are the official owner of the product you are enquiring about, if so, can you have documentation proving it.

For some advice on contacting Alibaba suppliers, I have an article on how to avoid being scammed by Alibaba.

Using a Dropshipping Agent

A dropshipping agent is a Chinese resident who acts as a middleman between drop shippers and suppliers in China. They are experienced with local customs and can speak English fluently, enabling better communication between the two parties. They can assist with price negotiation, shipping and much more.

Many people transition to dropshipping agents once they start getting consistent daily sales. They can help with finding the best prices, managing and storing inventory and fulfilling orders. Having someone to assist with the communication side of things can be very helpful. I have an article on everything you need to know about dropshippng agents.

A good dropshipping agent can be incredibly beneficial to your business, the problem is, finding a good one can be difficult. Your best chance is to follow the recommendations of someone who has used one before and had a good experience. Many of them will be paid off by suppliers to get you to do business with them at a deal that isn’t advantageous to you. This makes it risky to just pick one randomly as it can be hit and miss.

If you manage to find an honest and reliable dropshipping agent, they can benefit you in a variety of ways:

Sourcing – They have the ability to source your product direct from the manufacturer. There are many manufacturers that are not listed on Alibaba that they have the ability to find.
Pricing – They can help negotiate the best possible prices for your purchase. If you’re purchasing in bulk, a small percentage of each item can really be substantial.
Quality – Although you should order a sample before a large purchase, having someone in China who can see the factory and how it’s being produced can be helpful.
Shipping Times – They organize shipping and can reduce shipping times as they often have access to alternative shipping lines.
Branding – Having someone who can explain to your supplier to add your logo and how you want your product packaged with promotional materials.
Having an agent ship your products from China will mean you can ship worldwide instead of domestically.

Where to Ship Bulk Orders from China?

You’ll need to decide whether you want your order shipped to a fulfillment center, shipped to storage where you or someone else can fulfill the orders, or do you want it shipped to your house where you can fulfill the orders yourself.

Ship the Products Yourself

Having the product shipped to your house may sound a little crazy at first but it’s not a bad option. It’s really only viable initially to see how a product sells, however, I’d be moving to a fulfillment center (3PL) as your business grows.

If you start scaling your business, you don’t want to be packaging several hundred packages and shipping them off yourself. This will take up far too much time and depending on the product size, far too much space.

The advantages of doing it yourself are:

You can check the quality of all the products
You can package them exactly how you want them packaged with promotional materials
It will be cheaper than a fulfillment center

Use a Storage Facility

Another option is to have them sent to a storage facility close to where you live. Storage facilities are generally low cost and is a better option if you don’t have the room to store them at home. You can then either package and ship all the orders yourself every day or every second day.

The other option is you can pay someone to go to the storage facility to package and ship the items for you.

This isn’t a bad option if you still like the idea of having the product close to you and still like to be in control of the whole process. This option means you can pay someone to do it without them being in your home, which takes up less space and is relatively affordable.

Fulfillment Centers

This is the most common option for large orders and essentially takes all the work out of your hands and is really the only viable option if you’re scaling a product fast. Your next question may be, what is a fulfillment center?

A fulfillment center is a business that works primarily with eCommerce businesses to receive large orders of shipments, generally from China. Their job is to store inventory in their warehouse, once an order is made, they package and ship each product individually to the customers.

There are many fulfillment centers across the US and other countries and they all work slightly differently and they structure their pricing slightly differently. You’ll want to go through and check which ones will be the most cost-effective for you. To help decide which countries are the best for dropshipping I suggest you read this article.

It can differ depending on the product size and weight, their warehouse location, where you’re sending it to and the volume you’re selling. Once you start scaling your business it may work out better value to switch to a company that focuses more on higher volume.

Here’s a list of some of the companies you might want to look into:

If you’re a complete beginner I’d recommend Shiphero as they have no minimum order quantity. This is a great option if you want to reduce your initial risk and make a smaller purchase.

The difficult aspect of using fulfillment centers is inventory management. You’ll need to make sure your next batch of stock from China has reached your fulfillment center before your current batch is sold out.

On top of that, you need to manage your finances to make sure you can pay for the next shipment. If your stock starts running low before you make an order, paying for your shipment to be sent express may be your only option and this will cut into your profits.

Another thing to be aware of with shipping bulk orders is customs. They can intervene and possibly cancel your shipment. If this happens a company called Border Buddy can assist with getting your order through customs. They specialize in importing and exporting and can help get your order across the border fast.

Advantages of Purchasing in Bulk and Selling Domestically!

There are so many advantages to switching to purchasing in bulk from Alibaba and using fulfillment centers. It literally removes all the flaws of AliExpress dropshipping and turns it into a sustainable business model. I’ll go through the advantages of this model so you can see how worthwhile it is.

Shipping

If you’re using fulfillment centers in the US your shipping times into the US will be around 3 to 7 days. Compare this to shipping from China which will be around 2 to 4 weeks at best. This will result in much happier customers which will lead to more repeat sales. Read this article if you plan to dropship to the USA as a non-US citizen.

Quality

Generally, the product quality will be much better purchasing from Alibaba compared to AliExpress. Always make sure you order a sample of each type of variant you will be selling.

Price

You will have a couple of extra costs with paying the fulfillment centers and paying for shipping twice, once from China to the fulfillment center and again from the fulfillment center to the customer. Even with these extra costs, your margins will be considerably better due to lower product costs from a bulk order.

Suppliers

The suppliers on Alibaba are much more reliable and accommodating to deal with. They want to build a long-term partnership with you so they will actually respond to your questions.

Branding

This is one of the biggest advantages of switching from AliExpress to bulk purchases. Building a brand around your products and store should be your end goal. When purchasing in bulk from manufacturers, you can pay extra to have your logo put on your product.

Custom Products

When you’re dealing directly with manufacturers and doing large enough orders, you can request alterations to the product before they produce it. This can improve and make the product more unique compared to your competitors.

Packaging

You can have your product repackaged with promotional materials. Having products arrive at your customer’s door in Chinese packaging is never a good look. Adding promotional materials with future discounts will keep your customers coming back.

Perceived Value

If you’re selling branded products, shipped from the US on a beautiful website that looks like the original creator of your products, the perceived value of your products skyrockets. This is how the most successful websites in the world make so much money. This enables you to charge premium prices.

Sustainable

Building a brand around evergreen products can continue to make sales for years to come. You can even make a deal with the manufacturer to give you exclusive rights to specific products meaning nobody else can sell certain products except you. Compare this to AliExpress where as soon as you start making sales everyone can see the order count ticking over and before you know it you’ll have an army of competitors.

Valuable Asset

Once you have built a brand around your products and Shopify store, you have a valuable asset that can be worth 6 or even 7 figures. This is only really viable with this model, using AliExpress is short-term and your business won’t be worth much in the end.

Summary

If the above article is too much to read, I’ll go through the main points to take away.

AliExpress is a completely flawed business model and should only be used as a stepping stone for your business.
Once you’ve found a product with long-term potential, switch to purchasing in bulk from Alibaba will be a riskier yet better choice.
Have the products shipped to a fulfillment center who will then ship the products individually to your customers.
This has many benefits including faster shipping, better margins, and improved product quality, and negates many of the negative aspects of AliExpress making it a sustainable business model.
Your eventual goal should be to brand your store and products to really scale your business fast and provide you with a valuable asset.

As you can see, the normal way of AliExpress dropshipping is flawed which is why dropshippers need to innovate to become successful. If you want to reach success, don’t follow in the footsteps of most dropshipping beginners and assume AliExpress is the only method of dropshipping.