What products should you avoid when scaling a dropshipping store? We’ll go through the details of what you should consider and what to avoid when evaluating products.
There are a lot of different perspectives to consider when choosing a product for your dropshipping business. However, something that we have seen that is often overlooked is considering the logistics of moving any given product. Let’s take a look at what it means to consider shipping and the supply chain of a potential product.
Who are we? EcommOps offers China fulfillment services and is not a dropshipping agent. This article is for people who are dropshipping and have not yet hit the volume of orders required to work with EcommOps (50+ orders per day). We’ve been in the fulfillment business for many years helping DTC eCommerce brands grow, and many of our clients started out using the dropshipping business model. We have seen countless dropshipping stores succeed and a huge part of their success is tied in with their approach to logistics and products.
Why Considering Logistics is Important
There are several reasons considering logistics is paramount in choosing a product for your dropshipping business.
- Some products are inherently difficult or risky to ship. If your product is fragile or otherwise difficult to ship, This can result in lost or damaged packages, which means more returns, resends, and chargebacks for you, all of which will eat into your margin.
- Some suppliers just don’t want to involve themselves with certain products. This means you’ll have a hard time getting a good supplier or getting a good price on a product. Even you end up with a supplier that looks good, they may be getting in way over their heads with a difficult product, meaning major problems for you in the long run.
- Some products are restricted to certain shipping methods. This means you may get stuck with slow or expensive shipping methods. You won’t be able to improve your customer experience like this, which means you’ll face huge roadblocks in scaling your dropshipping business.
What Products to Avoid
When thinking about what products to avoid or be mindful of, there are really just two main categories to consider: products that should always be avoided, and products that merit special consideration before putting in a major investment.
Always Avoid Products That Are…
Over-sized or Heavy.
This should be common sense, and you likely have already hit roadblocks regarding this. When using ePacket, the length limit is 60cm and the weight limit is 2kg. Other low-cost carriers will have similar limits.
There are alternatives to using ePacket but it is generally recommended to avoid products over 2kg when shipping from China.
Things like wine glasses, lamps, products with small, moving parts, or anything similar should be ruled out immediately. Even if you are super careful and have a supplier your trust, international shipping is simply too brutal for fragile items. You will see breakage rates upwards of 10%-40%, which will create a ton of customer complaints and eat into your margin.
Products that are clearly liquid are going to have a hard time getting onto planes, which means long shipping times. You can find a special liquid line with ePacket, but anything that is liquid in a bottle is going to face shipping challenges. What many AliExpress sellers do to try and work around this problem is using untracked small packaging. This method of shipping isn’t heavily scrutinized and can sometimes work. However, they are still going to be slow, and there’s no tracking! You may have a batch get stuck in shipping somewhere and you won’t have any idea where they are or why until weeks or months later.
Knives, weapons, illegal goods.
This should speak for itself. Don’t even try it.
Large Western brands or fake goods.
Unless you happen to be a licensed seller for a particular brand (which you probably are not), just don’t get involved with these goods. They will end up causing headaches in the long run.
Products that can be used but need special consideration are…
Products with batteries.
This can certainly be done, but you need to make sure your supplier uses a shipping method that allows batteries. For example, Standard ePacket does not, but ePacket special battery line and Yunexpress do. If you don’t want stuck packages, you have to make sure your supplier isn’t cutting corners.
“Sort of” liquids.
This is definitely a gray area but is much more doable than products that are clearly liquid. Mascara pens, some gels, facemasks, etc would fall into this category. As we mentioned before, ePacket does offer a special liquids line that tends to work well. However, you’re still looking at a 1-2% chance of packages getting stuck even with that special service. Yunexpress does not handle liquids at all, so you are limited to ePacket with this genre of product.
Stiff, thin products.
This would include products like screen protectors or stiff art prints. Many inexperienced suppliers think they can ship these kinds of products cheaply in envelopes. What ends up happening is a 10-40% breakage rate! You need stiff or bulky packaging for products like these, and shipping can end up costing more simply because of the kind of packaging required, not because of the weight of the product.
Chinese sizing for clothing is way, way different than Western sizing (it’s much smaller). Even between factories, their sizes can end up being wildly different (one factory’s XL can be another’s XXXL). Shipping clothing can be done, but you must begin with a private supplier. You also need to scout out a good factory, order all of their sizes as samples, compare then to Western sizes, and then have a sizing chart available for your customers. Once you choose a factory, you need to stick with them, or you will need to go through this entire process again. If you don’t, you could be looking at 30-50%+ in returns!
There are strategies you can use to manage clothing returns, but it can be very time consuming and eat into profits.
Products with many SKUs.
Clothing and phone cases are great examples of this, as color variation, sizes, and other small differences add up to dozens, maybe hundreds, of different SKUs. You can’t expect your supplier to have all SKUs fully stocked at all times unless you are willing to put down a sizeable deposit or each individual SKU has crazy high sale volume. The best way to work with products like this is to get a private supplier close to the factory and be aware that you may be working with 1-2 extra processing days depending on what SKU is being ordered. It’s also a good idea to make sure the factory has plans to continue making the SKUs in question, or that you will at least get ample notification of they decide to stop.
Products with only one seller and a few orders.
In order for a factory to willing to invest in making a product, they need thousands (or even tens of thousands) of orders. We have seen dropshipper’s AliExpress supplier run out of inventory, and when they go to look for a new supplier for a product, they’re literally isn’t a factory making it. The dropshipper is then looking at an MOQ of 2k per SKU to start up production. Granted, this may have happened because a dropshipper was able to find a new product that is really taking off, but more commonly it’s a product that did not sell well that the AliExpress supplier is now trying to offload. This can be a significant scaling problem, so be sure you always find a private supplier to ensure that your supply chain is set in stone, that they have called factories and have confirmed they are still producing your product before investing heavily in scaling.
What we mean by “expensive” is any product costing more than $50. Lost or damaged products are going to happen no matter what, and if you have a good supplier, they will resend the product. However, a single resend order can wipe out 50 orders worth of profit with expensive items. A good supplier will already have that cost calculated into their pricing for you and will be able to resend. If you have a supplier with surprisingly low quotes, be cautious. They may be very slow or completely resistant to resending expensive orders.
Very cheap items with tons of AliExpress orders.
These products aren’t problems in and of themselves, but they may cause problems in building solid relationships with suppliers. Cheaper items make money on volume (think hundreds of orders a day), which means that a private supplier is going to have difficulty giving you a good price. You are going to find your order deprioritized by these sellers if you aren’t making them money, so unless you have really high volume, you may want to consider other products.
It is important to keep in mind that these are things to keep in mind as you plan to scale and are looking for a private supplier. If you are simply testing products, dropshipping is great because it provides more flexibility as to the kinds of products you can explore. This is also advice more catered to ePacket and Yunexpress.
Is your eCommerce business is in a position to start scaling in a sustainable way? If you’ve hit a high volume of orders and feel ready move on from the dropshipping business model to working with a China fulfillment center, reach out to us.