You must have heard of Dropshipping, But do you know “Reverse Dropshipping”? If you don’t know, please continue to read. Dropshipping is selling low-priced and low-quality products from Asian countries to Western countries. Reverse dropshipping is selling high-value and high-quality products from Western countries to Asian countries.
With the economic development of Asian countries, China’s wealthy people are getting higher and higher, China may contribute to 65% of the growth in global luxury goods consumption. So, there is a huge market opportunity for reverse dropshipping.
If you don’t know anything about Reverse Dropshipping, this article will introduce you to all of Reverse Dropshipping. Please keep reading.
目录
What is Reverse Dropshipping?
Reverse dropshipping means selling high-quality and high-demand products from western countries to China. It is the same as the business model of dropshipping, no inventory is required, and the supplier will ship to the customer on your behalf.
Reverse Dropshipping vs Dropshipping
Dropshipping means selling low-quality and low-demand products to high-income countries. It’s a common fulfillment method, and the competition is huge. On the other hand, reverse dropshipping means selling high-quality and high-demand products to low-income countries. In reverse dropshipping, competition is low, which makes it easier to succeed.
| Reverse Dropshipping | Dropshipping | |
| Products | High-quality and High-demand products | Low-quality and low demand Products |
| Audience | Low-income Contres, Like China | High-income Countries, Like the USA |
| Competiton | Low Competition | High Competition |
However, these two fulfillment methods have some similarities, too. For example, both methods include using 3PL for product sourcing and order fulfillment. Also, they both rely on advertising as a marketing method, and neither of these requires inventory or product stocking.
| Reverse Dropshipping | Dropshipping | |
| Product In Stock | No | No |
| Marketing Method | Promoting Ads | Promoting Ads |
| Order Fulfillment | Third-Party Logistics | Third-Party Logistics |
| Product Sourcing | Third-Party Logistics | Third-Party Logistics |
Is reverse dropshipping legal?
Yes, Reverse Dropshipping is legal, just like dropshipping. However, if the product you sell is illegal in the target country, or in the country it’s made, then reverse dropshipping can be illegal. For example, it would be illegal to sell marijuana to China, even if you buy it from the Netherlands where its consumption is legal.
The process of Reverse dropshipping
In this section, We will explain the complete process of reverse dropshipping, from the very beginning to the moment where you need to scale your business. Let’s see how it works.
Step 1: Research the Niche
Like in dropshipping, before you start, you need to determine the niche and find the right audience in the country you target. For example, people from China know the quality of China-based products, and most of them prefer to spend money on high-quality products from western countries.
You need to do a bit of research and understand the Chinese culture, language, product needs, and their paying ability. Some of the best niches you can try are fashion, makeup, watches and jewelry, sports equipment, baby products, and health products. Since the competition is low, you don’t need to worry about choosing a “too popular” niche, because neither niche is currently saturated.
These niches you can try:
- Fashion Clothing/Shoes/Hats
- Cosmetic
- Watch and Jewellery
- Sport equipment
- Baby Products
- Health products
Step 2: Build your brand online store
Now that you’ve decided what product you want to sell and what is your target audience, it’s time to build the store. One of the best platforms you can choose is Shopify, but if you sell to China, you can use Taobao, JD, or PDD. People from China are used to shopping on these platforms. If you want to build your own brand, You need to design a unique logo for your store and create unique packaging for your product.
Step 3: Find Your Supplier and Brand the Product
When you finish the store, it’s time to find the right supplier for your product. You should look for the one with the most positive reviews because if you choose a bad supplier, you might disappoint your customers and ruin your business.
To look more professional, it’s a good idea to brand your business. You should find a supplier that allows you to customize your logo on the product package or on a “thank you” card.
Step 4: Start Marketing
Before you start marketing, you need to research and understand the habits of your target audience. For example, people from China are not used to opening emails and don’t use Facebook. Instead, they use the Baidu search engine and shop on Taobao.
Step 5: Fulfilling Orders
This is the same as in Dropshipping. When you receive an order, you need to buy the product from a supplier, who will then ship the product to the customer.
Step 6: Scaling Your Business
As the business grows, you need to learn how to scale it. One of the things you should consider is finding a good fulfillment agent company. They will find you trustworthy and reliable suppliers, and also keep backup suppliers in case your business grows and the current supplier runs out of stock.
The Benefits of Reverse Dropshipping
Reverse dropshipping has a few good benefits. For example, it’s an inexpensive business that requires no inventory and is easy to start with. It is not saturated, which means less competition and better margins.
● Inexpensive
Usually, the consumption power of people in developed countries is several times that of developing countries, so marketing costs in developed countries are very expensive. If you put your marketing resources in China or other Asian countries, your marketing costs will be very low.
● Less Competition
Reverse Dropshipping is relatively new, so the competition is very low. It also leads to cheaper advertising and allows you to earn more money with each sale.
● Better Margins
Since the advertising is much cheaper, reverse dropshipping allows much better margins than casual dropshipping to western countries.
● No Inventory
With Reverse Dropshipping, you don’t need to stock the products you sell. Simply order the product from the supplier and have it shipped directly to the customer.
● Easy to Start
Reverse Dropshipping is not a complicated business model. All you need is to find the right product, trustworthy supplier, build a store, and start advertising.
Complications with Reverse Dropshipping
The only complication with reverse dropshipping is that shipping fees from western countries to China are quite expensive. If you want the lowest shipping cost and you don’t worry about the delivery time, your best option would be to use the USPS carrier.
● Expensive Shipping Fees
Shipping to western countries is cheap, but shipping to China is quite expensive. It’s because much more products are being sent from China to western countries, then vice versa. Also, the Chinese government subsidizes shipping costs in order to promote Chinese industry and exports.
● Language Barrier
Not all people in China speak English. To sell in China, the content and label of your product need to be in the Chinese language.
● Unreliable Shipping Partners
Since there are many suppliers, some of them are excellent, but obviously, some of them are not. Keep in mind that the cheapest supplier is not always the most reliable.
Start your Reverse Dropshipping with Fulfillment Partner
If you do reverse dropshipping, you should find a fulfillment partner in China. The company needs to be able to do product storage, packing, mailing, and take care of after-sale issues. One of the best fulfillment companies in China is Bestfulfill, which owns an over 3,000 square meter warehouse and processes over 1,500,000 orders each year.
FAQs
How long does it take to start making money?
It depends on your skills and experience. However, if you are new to reverse dropshipping, don’t expect to make money overnight. Keep trying and learning until you succeed!
Is reverse dropshipping more profitable than dropshipping?
It depends upon many factors, but it’s definitely easier to start with since there is much less competition.
Conclusion
We hope it’s all clear now. Reverse dropshipping is the same as dropshipping, but instead of selling from China to western countries, you do the opposite. It has multiple advantages, such as low competition and better margins, but you need to consider the high shipping fees, too.
