Dropshipping is one of the easiest ways to start an ecommerce business, and a dropshipping platform is one of the easiest ways to get a dropshipping business started! There are a number of different platforms that are available to businesses, but we’ve noticed that a lot of ecommerce entrepreneurs aren’t entirely sure what dropshipping platforms are good for.
EcommOps has created a guide to describe what exactly dropshipping platforms are, the pros and cons of using these platforms, tips to follow, and pitfalls to avoid if you decide to take advantage of these platforms.
We know the ins and outs of these platforms because we regularly help businesses transition away from dropshipping (and dropshipping platforms) to establish sustainable supply chains. EcommOps acts as a genuine 3PL for ecommerce businesses, helping to manage factories, fulfill orders, and otherwise create sustainable, scalable business strategies for our clients.
As a 3PL, our specialty is direct-to-consumer (DTC) China fulfillment. We help businesses fulfill orders directly from Shenzhen, China without needing to utilize a local warehouse (but still using dedicated supply partners and a full-service warehouse, unlike traditional dropshipping).
To get started, let’s take a look at what dropshipping platforms are.
What Are Dropshipping Platforms and How Do They Work?
A dropshipping platform is an online portal where services specifically designed for dropshipping businesses are offered. Typically, dropshipping platforms:
- Offer an extensive catalog of products that are available for fulfillment
- Have no required MOQs
- Use an app that can integrate into your Shopify store and help you fulfill orders
- Have Dedicated, friendly customer service
Notable examples of popular dropshipping platforms include:
Is AliExpress a Dropshipping Platform?
AliExpress isn’t really a dropshipping platform. Rather, it’s a collection of many sellers throughout China that offer their products or manufacturing capabilities to interested businesses, but AliExpress only hosts those businesses (who then offer their own services).
A dropshipping platform is usually a consolidated business. They have their own warehouse, inventory, and a sizable staff to manage their warehouse and offer customer service. So, if you’ve struggled to use AliExpress for a starter dropshipping business, then considering a dropshipping platform may make it easier to get your business moving.
The Pros of Using Dropshipping Platforms
There’s a lot of benefits that your business can take advantage of when looking at these kinds of platforms:
Very Easy for Beginners
As we’ve mentioned, dropshipping platforms are excellent entry points for beginners, especially if you are committed to running an ecommerce store but don’t have a product in mind. Usually, all you have to do to get started is install their app, choose an available product to sell, and import those listings into your Shopify store.
If you are very new to ecommerce, or you don’t want to invest the time to vet and find suppliers, we generally recommend dropshipping platforms over AliExpress to get started.
Solid Product Catalogs with Vast Product Choices
Another solid advantage of dropshipping platforms is that most offer solid product catalogs with a vast amount of product choice. In fact, most platforms provide at least some options for winning or trending products from their catalog that you’ll have the option to list on your online store.
Your business typically can get access to listed products immediately. Dropshipping platforms generally hold stock for their featured products, which means you don’t have to commit to a certain amount of inventory upfront.
Many of our clients still use dropshipping platforms on the side because their broad product catalogs make it easy to fill their general or broad niche stores. The ability to cross-sell products with proven winners is a great way to increase revenue without needing to heavily invest in an unproven product.
Good, English-Speaking Customer Service (Usually)
Unlike AliExpress (which doesn’t offer support for working with businesses on their platform), a dropshipping platform will offer customer service. Usually, that customer service is excellent and English-speaking, meaning you can quickly get a hold of someone to talk about concerns you may have.
The service you receive won’t necessarily be perfect (and we’ll touch on that when we talk about the cons of working with dropshipping platforms), but you can usually get in touch with someone quickly and easily to start getting problems addressed.
Good Factory Connections
Since dropshipping platforms order a large volume of inventory (both to hold in stock and for ecommerce clients), they hold a lot of sway over their partner factories. This can mean potential product quality issues can be addressed (without you needing to have a direct relationship with the factory).
Shipping Options and Local Warehouses
Unlike when you buy from a supplier on AliExpress, ordering through a dropshipping platform generally opens the door to a variety of shipping options. This includes specialty shipping lines (like for hazardous protects), and you may even have access to local warehouses (like a warehouse located in the U.S. or the E.U.)
Product Recommendations
Finally, if you’re more concerned about running an ecommerce business (as opposed to developing or selling a specific product), a dropshipping platform may be a good choice. You can find constant recommendations of new, hot selling products that you can quickly plug into your store.
Cons of Using Dropshipping Platforms
While there’s a lot of benefits for businesses using dropshipping platforms, there are a number of drawbacks that are important to consider.
Apps Are Geared for Beginners, Not Experienced Businesses
Dropshipping platform apps are typically designed with beginners in mind (after all, these platforms want it as easy as possible for someone to quickly start up and make orders). As your business grows, or if you’re already an experienced business owner, you might find that the dropshipping platforms are limited in their functionality.
Lots of Direct Competition with Other Dropshippers
While it’s great to have product recommendations, if a platform is publicly offering them, that means all of your competitors are getting the same product recommendations. You all will be competing against each other to sell similar products, which can make it hard to make your brand stand out or to give your store early traction.
Inaccurate Stock Numbers
While dropshipping platforms usually hold stock for order, the stock numbers you see aren’t always accurate. This is especially true if multiple dropshippers are attempting to sell the same products (the inventory stock can deplete before it’s updated on the site).
If you use a dropshipping platform for cross-sells with your core products, suddenly running out of stock can cause order delays and damage your main products sales. If you don’t think you have the resources to keep a careful eye on available stock, you may want to use the available product recommendations as inspirations and ideas.
Customer Service Bureaucracy and Slow Problem Resolution
A customer service agent may be easy to reach, but they aren’t necessarily going to be able to quickly fix your problem. They may not have the expertise to understand complex issues, or they may have to escalate problems through multiple layers of management to make things right. This takes time, and for a fast-paced business like ecommerce, that time can cost you.
Factory Management Struggles
Dropshipping platforms can have a lot of sway over factories due to their overall order volume, but there’s still a limit to how much influence they can actually have. Since their client base is so spread out over so many factories, it can be difficult to manage specific factories. If any one given factory doesn’t have a lot of order volume from the platform, they may be reluctant to address problems or make changes to their products according to your preference.
Local Warehouses Often Lack Stock and May Not Be Directly Owned
If you want to take advantage of a local warehouse, you may find that they aren’t stocked nearly as well as China-based warehouses. It’s also common for dropshipping platforms to charge high rates for shipping from local warehouses, and they may not even actually own the warehouse. Instead, it may be a warehouse partner, which means the platform won’t have direct control over inventory operations.
Private Agent Type Services Often Lacking
While some dropshipping platforms offer services similar to a private agent (like product customization, branded packaging, and related services), their services just can’t compare to actually using a dedicated agent (or partnering with a 3PL, for businesses seriously looking to scale).
Platforms don’t need a single business with high order volume. Instead, they want a high number of dropshippers with low average order volume. This is the core of their business model and the bread and butter of how they make money. A 3PL or fulfillment provider, on the other hand, strives for higher order volume per client.
The focus on helping businesses increase their order volume takes dedicated resources and attention, and that makes business sense for a fulfillment provider (but not for a dropshipping platform). If you already have a successful brand or plan to scale to 7-8 figures, it’s better to just connect with a fulfillment provider or 3PL instead of using a dropshipping platform.
How to Use Dropshipping Platforms Efficiently
There are distinct cons to keep in mind when using dropshipping platforms, but that doesn’t mean you shouldn’t use them.
Use As a Stepping Stone Between AliExpress and a Fulfillment Provider
The focus dropshipping platforms have on the quantity of dropshippers vs the sales volume of a specific store isn’t inherently bad. It just means that the service is catered towards beginner and intermediate stores. This is especially true if you don’t have the constant order volume needed to work with a quality fulfillment provider or 3PL.
If you have the time, resources, and expertise, you can use AliExpress for better results than using a dropshipping platform, but it’s not easy. You need to be able to find suppliers that specialize in your product, vet them to avoid the low-quality choices, and be able to communicate in a way that establishes a healthy, mutually beneficial relationship.
Since most beginner and intermediate store owners are not equipped to use AliExpress with the appropriate amount of time needed to make good supplier choices, dropshipping platforms remain as an excellent option.
Secure Products by Using a Pre-Order Service
Dropshipping platforms regularly hold stock for popular products, but if you plan on scaling, then relying on what stock they have available isn’t a great option. The likelihood of that stock unexpectedly selling out is high, which is detrimental when you’re trying to keep orders as consistent as possible.
To avoid selling out, you may want to make use of pre-order services that dropshipping platforms usually offer. This requires a bit of money upfront to secure inventory, but you will have the confidence of knowing that inventory will be available when you need it.
Wait, That’s Not Dropshipping, Is it?
Correct. When you start to feel the need to pre-order inventory to accommodate increasing demand as you begin to scale your operation, you start to leave dropshipping and start to venture into a traditional ecommerce business. If you find you have to pre-order a lot, it may be time to partner with a true 3PL to start establishing a genuine supply chain for your business.
Consider Special Shipping Lines
Finally, consider using special shipping lines (like YunExpress) to make shipping times more consistent. This will help provide a good experience for customers and will otherwise help your brand get good reviews and grow. These shipping lines may be more expensive, but it’s a worthwhile investment (compared to cheap lines that have too long or inconsistent delivery times).
Warnings When Working with Dropshipping Platforms
If you decide to work with a dropshipping platform, whether as a supplement to your main business or as a launchpad for a new business, there are certain things you must avoid doing.
Don’t Let Them Source Winning Products You Found on Your Own
If you have a winning product that is not in a dropshipping platform’s catalog, do not let them source the product for you. If they source it and see how successful it is, the platform is likely to list that product (or a similar product) on their catalog for other dropshippers to sell.
Letting the platform source your product can create unnecessary competition, so make sure to source winning products through different channels.
Keep a Close Eye on Stock Levels
If you are selling straight from their catalog, you must keep a close eye on stock levels to make sure you don’t inadvertently sell out (or make sales for products that aren’t actually available). The advertised stock availability is usually more accurate than what you might see on AliExpress, but it’s still not always 100% correct.
Keep an eye on stock, take advantage of a pre-order service as needed. If you find demand continues to outstrip the supply for your dropshipping platform, then consider moving to an ecommerce-focused 3PL that offers extensive inventory management services, like EcommOps.
Don’t Have High Expectations of Complicated Customizations or General Requests
The best way to use a dropshipping platform is to sell the products that they offer. If you want customizations (or have other general requests), it’s likely to take a very long time to get taken care of, if the dropshipping platform will even handle it in the first place.
Be realistic about the kinds of product requests you can make, and if you find that you need a high volume of customized products, it might be time to move away from the dropshipping platform towards a genuine sourcing specialist or full 3PL.
Successful Dropshipping Businesses Will Outgrow Dropshipping Platforms
Regardless of how you start, there’s one guarantee: successful businesses will outgrow dropshipping platforms. The platforms just aren’t designed to handle high volume orders from single businesses, complex customizations, or accommodation for a streamlined supply chain.
If your business has found success on dropshipping platforms, but you feel like your business needs are no longer being met, then it’s time to transition to a 3PL, like EcommOps.
Working with a China 3PL Is Best When Sourcing Products from China
If you decide that you want to work with a China 3PL, you should also consider sourcing your products from China. Many dropshipping platforms already source products from China, so the transition from dropshipping to using a 3PL is easy. However, this is not the case for all dropshipping platforms (for example, the platforms mentioned in this article source from China, Canada, and the United States.)
If you don’t want to source products from China, then we recommend partnering with a 3PL that is based where your products are being made.
EcommOps: China’s Best Direct-to-Consumer Fulfillment Provider
If you already dropship products from China and are looking for a 3PL to partner with, EcommOps is going to be one of your best options. Our catered, full-suite fulfillment services allow businesses to create a genuine supply chain that is flexible, resilient, and consistent. Some of our advantages include:
- A physical warehouse located in Shenzhen
- English/Mandarin bilingual support
- Order fulfillment services
- Factory management services
- Inventory management services
If you feel like you’ve outgrown dropshipping, we’d love to connect. You can reach out to our experts by filling out our online form, and we’ll be in touch to create a business plan that leverages China fulfillment to help make scaling easy.
We look forward to helping you level up your supply chain!
