How do customers choose whether to purchase an item from you instead of from Alibaba when the price is cheaper?

Why should someone buy from your website instead of direct from a trading company on Alibaba? Let me count the ways.

  1. Convenience- Companies on Alibaba sell mostly in larger quantities. On your website, possible you sell one piece at a time.
  2. Shoppers experience- Ability to combine an order and buy multiple items at the same time. Your website may also be easier to shop from.
  3. Location- Your company may be located in the same time zone or at least similar time zones so customer service may actually be conducted in real time or at least more convenient times for you as a customer.
  4. Trust and professional image= The quality and professionalism of your website will make a big difference in the level of trust a customer places with you. They can see by your address and contact details where you are located and how to contact you in the case of a problem. If your website is done correctly your potential customer should see that you are an “expert” in the products you are selling. FAQ, installation or usage tips and tricks, customer testimonials, etc.
  5. Shipping methods- You may be able to offer more speed based delivery service options than a Chinese supplier.
  6. Delivery Times- Shipping from China can take 4 to 6 weeks or more depending on the product, inventory levels, and shipping method used. You may be able to offer next day delivery or other quicker methods.
  7. Payment methods available- Customers may be more comfortable using credit cards with your company, rather than sending secure data to an unknown company in a foreign country.
  8. Customer service- Have a question or a problem? With a local company website you can pick up the phone or even send a text and expect fairly rapid solutions to your problem. Or, get up in the middle of the night to call an Alibaba supplier who may or may not be able to communicate easily in English. They all will tell you, “Yes I speak English”, but the level of understanding may be difficult.
  9. Return policy- Did you ever try to return something to a Chinese supplier? Getting return authorization may be difficult, cost to ship back high, and don’t even think about trying to get a refund for any customs duties you may have paid.

Remember, when you talk about buying from Alibaba you are not really buying from Alibaba at all. You are buying from a third party vendor using Alibaba to list and market their items.

Keep in mind that price is not always the only consideration shoppers use to justify a purchase. If the price is the only consideration you are worried about, and it doesn’t matter about the speed of delivery, possible returns, trust or scam potential, and little details like those, then go ahead and buy based on the lowest price available.

Buyer beware!

What are the downsides of drop shipping?

Drop shipping is an easy way to get involved with e-commerce. No need to have a warehouse, no need to carry inventory, no need to package and ship orders. How much easier can it get?

Despite all of the pluses, drop shipping does have a big downside.

Here are some of the downsides:

  1. Price- you pay for the convenience of having someone else handle inventory and service, and often you pay a heavy premium for that convenience. Suppliers add a markup to the cost of packing materials, they will add a markup to shipping costs, and often they will markup their labor costs. After all, nothing is free.
  2. Information- Your drop ship supplier must keep you informed about inventory levels and any price changes. If you are selling on Amazon, eBay, or other similar sales platforms and you cancel too many orders because of a back order situation from your supplier, your service ranking will be affected and if your metrics drop too low your selling account may be suspended or even cancelled.
  3. Convenience- The number one reason to use drop shipping is also its biggest downside. Drop shipping makes it easy for just about anyone to enter the market. This easy entry results in massive competition since sellers don’t need any investment to start a business.This massive competition often results in sellers competing on price only. Profits suffer for everyone
  4. Control- When you drop ship you give up control of all of your order handling.  How do you ensure your orders will be shipped quickly?  How do you ensure good quality? How will your supplier handle problems or returns when they occur?  You have to find trustworthy suppliers.  That is a difficult thing to do.  Some suppliers will be excellent, some just good, and some totally terrible.  You have to hope you have made the correct choice.
  5. Your effort and involvement- Again, drop shipping is a good way to get started but it is not as easy as a lot of the companies trying to sell you tutorials or drop shipping services would like you to believe.It is not passive income.  It is not a low effort way to do business.  You have to pay attention and actually put a lot of effort into the business to succeed. You have to process orders.  You have to provide customer service and answer questions. You have to communicate with your customers about shipping, tracking numbers, possible service issues and more.  You also have to keep aware of your competition and monitor prices, monitor new items, and make sure nothing is happening to disrupt your market.

How can you prevent liability when selling online?

You really can’t prevent liability, you can only lessen your exposure. If someone or something is injured or damaged using your products. People, especially in the USA can sue anyone for anything. Often cases are dismissed or “Thrown Out” by the court as frivolous, but you may still have to pay legal fees to defend yourself. While not being able to prevent liability, there are ways to lessen your exposure.

  • The best that you can do to avoid or at least reduce liability is to select your suppliers carefully. Make sure they are manufacturing quality products and are using proper quality testing. Verify that they comply with all necessary safety regulations in your country. Examples of risky products would be anything electrical (think battery packs and battery chargers on Hoverboards for a recent example), anything that replaces an OEM part on a vehicle,, (think brake parts, tires, wheels, brake lights, headlights, etc.,) batteries on rechargeable products, (think about Samsung phones), food, medicines, and nutritional supplements, cosmetics, children’s clothing, and the list can go on and on. Make sure your supplier can provide copies of this compliance to regulations just in case you need them.
  • In addition to carefully checking quality, see if your suppliers carry product liability insurance and ask that you be covered on their policies for your protection. You will need to consult with an attorney or insurance agent that specialises in Product Liability since it is a very complicated area, especially if you import products.
  • Look into carrying your own product liability insurance, especially if you are selling something that may fall into a “ high risk” category.
  • Handle all customer complaints promptly and to the customer’s satisfaction. Sometimes just the simple act of acknowledging the problem and correcting it is sometimes enough to avoid legal action or additional problems. Some customers simply like to know you care about their issues and are willing to work with them to correct a problem.

As I mentioned earlier, Product Liability is a complicated issue and you must consult with a qualified attorney or insurance agent to get the best, most accurate advice. Proper advice may save you from a lot of financial problems for both your business and you personally in the future.

US marketers: Would you outsource marketing tasks to someone outside of the US?

Proper marketing and advertising is the lifeblood of any business. Done right, it helps you grow. Done wrong it will kill your business fast.

If you are talking about common marketing tasks that are not specific to your product or market, you may be able to use outsourced foreign marketing for repetitive tasks.

If you are talking about industry specific or business specific marketing tasks you hire the best “Experts” in your field you can afford. Marketing is charged with delivering your message to your targeted market. If you want it done right make sure you have someone that has an understanding of what specifically you and your company needs to do. Make sure you can communicate effectively with your chosen marketer and that they will be available when you need then, should a problem come up. If you don’t care if your message reaches your audience, hire the cheapest people you can find. If you want your business to grow and succeed you hire the best.

Remember, good marketing isn’t just about posting a few message on social media or searching keywords and SEO.  It is about delivering your message.

It’s your company, your money, and your business reputation on the line.

What are your responsibilities regarding shipping and delivery when you drop ship?

The clock will start ticking for the carrier calculated shipping when the tracking number is entered in the system. It is all up to you, the seller, to have a negotiated agreement with your supplier about how long they will take to process your order and ship product. You then inform your customers with a statement in your ad copy like, “Usually ships next business day” , or “Usually ships in three business days”. You then also let the customer know how long the average transit time is based on the shipping carrier you use. Of course, this all goes out the window if you use an international drop shipper, but you are still ultimately responsible for everything you say in your ad or sell on your website.

You are the seller of the products you advertise. There is never a situation where you don’t have control of your shipping if you have done your job of picking your suppliers wisely. That is your responsibility and your job. It is a simple matter to understand. If you don’t have control of your shipping, you have not done your job right. You communicate with your supplier, you should have a reasonable expectation that your supplier will keep you informed about inventory levels and pricing.

You, as the seller, are responsible for shipping delays if your supplier runs out of inventory. You must tell the customer the expected backorder shipping date, and if that date changes, update the customer ASAP.

Here is a paragraph from the FTC Federal Trade Commission website, called the 30-day rule.

“The Rule requires that when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days. That is why direct marketers sometimes call this the “30-day Rule.”

If, after taking the customer’s order, you learn that you cannot ship within the time you stated or within 30 days, you must seek the customer’s consent to the delayed shipment. If you cannot obtain the customer’s consent to the delay — either because it is not a situation in which you are permitted to treat the customer’s silence as consent and the customer has not expressly consented to the delay, or because the customer has expressly refused to consent — you must, without being asked, promptly refund all the money the customer paid you for the unshipped merchandise.”

Full address to the FTC website is

Business Guide to the FTC’s Mail, Internet, or Telephone Order Merchandise Rule

If you are selling on Amazon or eBay or similar platforms, shipping delays and backorders translate to customer dissatisfaction and complaints. These translate to poor reviews and complaints which could get you banned as a seller. Once you get banned, it is really difficult to get reinstated.

How long should your ad copy be?

Your eCommerce site is probably your one and only chance to be a superstar. Writing good unique sales copy is an art form and is the best chance you will have to let your customers know exactly what you are selling, what it will do for or help them with, and why they should buy from you instead of all of the other suppliers selling similar products. There is no formula to determine correct length. If it takes a paragraph to correctly advertise your product good. If it takes an entire page of copy, that’s ok too. Just keep it nonrepetitive, include keywords and searchable terms, make it understandable in terms of language used, and build the best possible ads you can, based on the products you sell.

Your ads should be as long as it takes to correctly describe the products you sell and should include the following.

Features: Include a clear description of the product, what it includes, and what condition it is in.

Benefits: What problem will the product solve, what extra benefit will it bring to the customer. Many potential customers either know they have a problem and don’t know how to fix it, or they may not even realize they have a problem that needs to be solved. Don’t assume all of your customers are experts when it comes to your product. Examples may be things like new improved software to make it easier to program your phone, or special high-quality video cables to give you better picture quality and data transfer. It may be a special new product that stops that annoying squeak from your car’s suspension. Take a look at some advertising from the Sharper Image Catalog or some of the TV ads that Dyson products use. They find problems that many customers don’t even know exist and then find solutions to fix those problems. Then they write or develop creative ad copy to let customers know how they will benefit from using their products.

Follow the leaders in advertising like QVC, HSN, RONCO, any product that can be presented in 15 minute or 30-minute presentations. They take common products, explain them correctly, point out the unique benefits and make them seem exciting. They are not using 30 second or 60-second ads, they take a lot of time and build a product and a story. You can do the same.

Specifications and Tech data: Include sizes, colors, electrical requirements, weights, performance ranges, and anything else the customer may require. Keep building your database on tech specs every time a customer inquires about data or features you did not originally include. revise your ads to make them better and more descriptive.

One of the things you may notice when you go on a suppliers website is the type of copy used. It was probably initially written by an engineer, and then given to a technical copywriter to put it all into English. Factory ads and supplier ads are designed to sell product from one expert to another expert.

Consumers usually are not experts. They need to be told what, when, and why, they should be buying your product. So, write individual unique, creative copy to answer those questions from everyday people and you will stand a pretty good chance of success.

There, I’ve taken a big chunk of a page to answer a simple question. I hope it helps.

When Should You Automate your Drop Shipping Company?

Let me start by saying that drop shipping is not a passive business. You can’t just throw a few items on a website and never worry about or pay attention again. You must be involved if you want to succeed. Drop shipping requires less overhead and inventory expense since you won’t need a warehouse, but you pay for that lower upfront expense with higher long-term fees for services and higher merchandise charges.

A drop shipping business, and in fact, all other businesses should base their decisions about automation on financial reasons. When it becomes too expensive or time-consuming to continue to process orders by hand, you should explore the options available for automation.

Do a little test on your internal business expenses. Determine how long it actually takes to capture, process, and transmit a customer order to your supplier. Add how long it takes you to verify shipment has been made, tracking numbers received, and customer advised of details. How long does it take to handle all accounting functions for each order. Added all together, that will be your order processing time for each order you receive. Factor in other regularly repeating tasks you handle with every order. Multiply that time by the number of orders you handle each day times the hourly rate you pay your employees. That is what it costs you to handle each order. You probably will be surprised at how expensive it costs to handle orders. A lot of small businesses really underestimate how much it costs them to run a business.

Now, get the costs together on automation software and hardware necessary to process those same orders. Add your cost of human supervision of the operation. Add in your monthly service or maintenance fees to keep your system operational and you get the cost per order for automation.

These order costs don’t include your fixed expenses like rent, or equipment and utilities since they will be necessary whether you automate or not.

Always keep in mind that not all business process can be partially or fully automated. Some human intervention and oversight is always necessary.

You can automate the order processing system to send orders directly to your supplier after your system captures the customer data. Of course, you must make sure someone audits this process so correct data is captured and transmitted.

You can automate the process to send your customers tracking data and shipping advice. This could include your accounting entries so orders are properly processed, shipped, and marked when completed. You can’t just send your drop ship supplier 100 orders and rely on them shipping 100 orders on time, complete, and correctly. Your internal data needs to be matched and edited with the external data they send you.

You can automate customer contact to thank your customer for their order and give them options on how to contact you. You can automate future contact to advise about new items and promotions by utilizing an email auto responder for mailing lists.

You can automate some customer service tasks by offering a really great and comprehensive FAQ service but you still need human intervention. Some people are just funny that way! Imagine, wanting to actually speak with a live, real-time person that can actually answer questions and make decisions.

Of course, no matter how much automation you can apply and how easy you can capture and store customer data, it is still all worthless unless someone, generally a human, actually takes the time to analyze and use all that data.

Is it possible to earn a high 6 figure income drop shipping?

If you are trying to earn a high 6 figure income, I assume you mean maybe $500,000.00 to $900,000.00 per year, you would have to have an extremely unique, high dollar value product or group of products to sell and have virtually zero competition to cut your selling prices or divert sales.

Do the simple math. To earn $500,000.00 per year from a retail e-commerce operation you would have to sell 5 times that amount, or maybe even 6–8 times that amount to get a net income that high since many drop ship items have notoriously low-profit margins. Drop ship suppliers do actually charge you for the convenience of handling the inventory and shipping for you and most are not cheap. So figure you are running an extremely low overhead drop ship operation and you sell $2.5 Million each year. If your product is selling for $100.00 each that would be 25,000 pieces sold per year or a little over 2000 per month or about 70 each day. Even with extensive automation of order processing that is a lot of work or someone to handle.

Here are some of the daily things that must be done on a regular basis:

  • Process orders and send them to your drop ship supplier. Easy enough to automate but still requiring some human intervention at times.
  • Make sure tracking numbers are sent from your supplier on a timely basis and relayed to your customers. Again, can be automated but you must make sure your orders are being shipped on time.
  • Make sure you review the on-hand inventory position and monitor supplier for any selling price changes so you can react on your website or selling platform.
  • Handle any customer service related correspondence, questions, and request for returns.
  • Normal business routines like accounting, looking for new products, looking for new suppliers, marketing, and advertising.

Handling 70 orders a day does not sound like a lot of work, but it does add up when it comes to your time involved. All of these take time and hiring someone to handle these for you will cut into your potential net income. Some things can be automated but again, not everything can be done with an app. I will use Amazon as an example since it is easy to look up data on their seller’s performance. Only 13% of sellers on Amazon sell between 1 Million and 10 million dollars worth of merchandise per year. Only 2% sell more than 10 million. The average order value on Amazon is only $47.00. Not a lot of sellers in that high income bracket you are looking for out of the millions that sell on Amazon.

So yes it could be done but will probably require a whole lot of luck, an extremely unique product, and a good staff to handle the day to day operations. Another point to keep in mind. If you can find products where you can sell 25,000 pieces each year, you would be much better off buying in bulk and handling the shipping yourself.

Can You make 4-5 K each month Drop Shipping?

Yes, you can make 4–5 K per month with only 10 hours work per week but you probably won’t do it!

You would need an extremely unique, high demand item to sell and marketing and advertising programs in place to deliver your message cost effectively to your target audience.

If you don’t have a unique product your profit margins will be extremely small because of all of the competition you will face. Want to test that theory out? Find a drop ship supplier for just about any product you want. Get them to quote you a price including fees and handling charges. Now go to Amazon and search for that product.

How many sellers are offering exactly the same product?

How many sellers are using exactly the same art and sales copy supplied by the manufacturer or distributor?

How close are the selling prices? And how much is the profit margin?

After deducting Amazon selling fees, or your own marketing costs if you sell from your own website, how much (or little) net profit margin is left for you?

You see ads for drop shipping suppliers and dropshipping tutorials all telling you how easy it is to make money, and yes, the method is easy, but making a decent profit is very hard, again, unless you can find a unique, “Niche” product.

How do I get the artwork for my web site?

A customer has written me asking for an app to scrape photos and product content for his website.

Contrary to popular belief there is not always an APP for everything, nor should there be.

The purpose of an e-commerce website is to sell a product, and one of the toughest jobs of all is to convince customers to buy from you rather than the other 99,999,999 sellers using the exact same pictures and ad copy provided by the suppliers. Make your ad look unique and special. Take high-quality photos with proper backgrounds and good lighting. Show the product itself and show it in use by people your potential customers can relate to.

Product content works the same way. The factory or distributor wrote sales copy designed to sell the product from one professional (The factory)to another professional (The e-commerce seller). Their ad copy is usually not designed to attract or inform the consumer about the product. Write unique ad copy using product features, product benefits, tech or spec data, and then tell your shoppers why they should buy from you instead of anyone else. If you use the same sales copy as everyone else, why should anyone choose you?

I understand you may want to use an app because it is the easy way, but really, sometimes the easy way is not the best or most profitable way.

It takes hard work to be successful in whatever you are trying to do. Why not put in the necessary effort to be successful.