AliExpress is for wholesale purchases only, but now the question is what should you wholesale or what should you buy? There are three types of buyers at AliExpress and each uses distinctive business model. They are retail arbitrage, private labelling and product customization, all of which focus at least partly with selling shopify products.
All three are very different and before you start ordering products through AliExpress it’s important that you decide which business model suits your needs. Let’s start with the easiest one with the retail arbitrage.
Retail arbitrage means that you buy products from China and somewhere else in the world and basically flip them for a profit. For example you buy a blender from China through a supplier on AliExpress and you pay $30 for that blender and of course you buy more than one so let’s say you buy 20 for a total of $600, using dropshipping chrome extensions. You then turn around and flip those products on Amazon or Ebay for $40 each, giving you a $10 net profit per sale.
If you sell all 20 you just made $200. It’s really easy, there isn’t much more to it. There are no barriers to entry the places where you can sell these products are somewhat limited and because arbitrage is so easy, anyone can do it and as a result we have plenty of competition, meaning that your earning potential is fairly limited. Arbitrage is a good way to start but if you really want to get serious about starting your own business and building a brand – private labelling is definitely the way to go.
Private labelling sounds hard, but it’s really simple it’s basically consists of putting a label on a product that already exists. The only difference or add the added layer of work that you have to do is that you have to create a logo and send that to your supplier. Then he will put that on your product and your packaging. Once your product arrives you can do the same as you would do with the arbitrate you can sell it on any platform you want but now you can also sell it under your own brand on your own website. If you go to Amazon you will find that many people are selling the exact same product but the label of the brand is different. That’s because they’re using the services of a private label. You are selling the brand and not necessarily just the product.
Private labeling is not difficult, it’s just extra work, namely to create a logo and communicating that to your supplier, you will find that in addition to selling on platforms like eBay Amazon Etsy and others, you can also sell on your own website, because now you are setting a brand not just a product. If you find the right niche your competition should be limited and as a result you will make more money.
The final model we’ll look at this product customization people use AliExpress to source products, but they all also use it for find suppliers who can manufacture products for them. This requires a little bit more experience, because you have to work closely with your suppliers to define exactly what you need. Once the design is final and this is obviously require some of the hard work and some communication back and forth, the supplier manufactures the product and ships to you what’s the product line you can sell it on all the different platforms.
Also you can sell these products to department stores or giant retailers or you can sell it wholesale to other businesses. Product customization is not easy especially if you are a beginner, but once you get it done, you can sell it anywhere you want. Your competition should be virtually non-existent or very limited and as a result your profit margins are much higher compared to other business models
Before deciding that what to so the first thing you want to do is pick the right business model for your needs. If you lack business experience then start with arbitraged and you will learn plenty quickly and pretty much it takes a run a business and how the supply chain works, although I jumped into private labelling as it’s the best way to build a brand and establish yourself in online trading. Once you are comfortable with product sourcing and supply chain management look for ways to improve products through product customization.