There’s been so much written about dropshipping that you would probably think nothing new can come up anymore. Well, think again.
A new model of dropshipping is the talk of the town and it’s called reverse dropshipping. This is a unique way of dropshipping that is still in its primes, which can only mean no competition, among other pros.
So, if you want to give it a try now it’s the perfect time to find out more about it and see if it’s something for you.
What is it exactly and how can you take advantage of reverse dropshipping? And why is it on the rise in 2021? That’s what we are going to talk about throughout this article. Plus we’re also going to give you some pros (and cons) of taking the reverse dropshipping road, and an actual example of how it works.
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So, what exactly is reverse dropshipping?
For many years, dropshipping actually meant finding and shipping low-price and low-quality products from suppliers based in Asia to countries like the US and EU. And this, unfortunately, is still how many businesses do dropshipping.
Now, reverse this and you have reverse dropshipping. You actually take high-quality products from suppliers based in countries that normally import these products (like US or western European countries) and you sell them in countries that usually export them (like China).
Sounds a bit complicated, we know, but it’s actually not. A more simple way of describing it is selling and shipping US or EU-made products to China.
Pros of reverse dropshipping
Now, as with every new successful business model, there are many pros but also some cons to reverse dropshipping.
Let’s start with the pros, as we like to keep it positive. 🙂
Higher profits
Probably the most important benefit of reverse dropshipping is that it can bring you higher profits than if you do dropshipping the traditional way. And that’s because instead of purchasing low-quality products in bulk (which is actually why many don’t believe anymore in dropshipping) when you reverse dropship, you will be selling high-quality, premium products in much smaller quantities. Therefore you will have a higher markup and margin.
In turn, this can come with other struggles such as finding dropshipping suppliers that can ship to China which can be time-consuming and sometimes almost impossible.
Almost no competition
It’s true that not many online business owners know about or want to switch to reverse dropshipping. That of course happens because reverse dropshipping is still in its beginnings. So, now would be the perfect moment to hop on and get a big piece of the market.
Now, if you have some competition in the market you choose to reverse dropship then there is a big chance that this competition will be made of only a few businesses and even a bigger chance that most of these businesses are just starting to do dropshipping. So, if you already know your way in dropshipping, then reversing it won’t be such news for you and you can be successful easily.
What about the cons of reverse dropshipping?
Now, you might ask yourself if this is such a big hit, why other companies aren’t doing this yet? Are they not aware of it or just afraid?
Below we will tell you more about some of the cons of reverse dropshipping.
The market is the issue
The markets you want to sell your products to can be so different from the ones you’re used to. Let’s take China, for example. Here everything is different, from the language they use to the cultural background. They use totally different social media platforms and other ways to advertise their products.
So, be sure to really understand and research the market you want to enter. The best way to start your dropshipping business there is to maybe have a few local consultants teach you the ins and outs of doing business in China. Among others, you have to find out what are the needs of the people there, which regions are the best choice for ecommerce and what strategies can help your business grow.
You can also look for national influencers and bloggers that are big in the areas you want to sell to or have the same target group as the one you’re more interested in. They can help with brand awareness and drive traffic to your site.
Strict requirements
Reverse dropshipping comes also with other strict requirements regarding the regulations around the products you can import and the logistics behind the same products.
China has very strict requirements around which products you can sell there and who can sell them. So be sure not to go for food and beverage, or even medication, all these are likely not regulated in the Chinese market. Maybe try to import and sell products like electronics and fashion items.
Also, logistics can be a big deal when you want to ship to China. Sure, shipping internationally is now easier than ever, but in countries like China, it still can get complicated. So, always use suppliers that know how to handle this and have experience shipping to this country.
High shipping fees
Well, of course, fees are a huge reason why many businesses choose not to do reverse dropshipping. As we all know, before you ship internationally, you have to check the fees that a country or a province charges when you deliver products from outside that country.
That means you have to pay attention once again to the suppliers you choose and see the fees they charge you to ship to China, for example.
So, even before making the decision to reverse dropship to a certain country, do your research and check the tariffs charged along the time in that location. This will help you understand if it’s worth it or not to ship to that location.
An actual example of how to reverse dropshipping
Let’s take the most popular example these days of reverse dropshipping, shipping your products from the US to China.
First, you need to see if the market suits your business and products. It’s that the Chinese demand for high-quality products produced in the United States is constantly growing, but are your products in demand? And if yes, where exactly in China? China is a huge country so you need to decide where you want exactly to start selling your products.
Now that you did your extensive research, and you’re ready to sell to China, you need to choose the best dropshipping platform for importing to this country, one where you can find the right suppliers that can help you enter the market easily.
If you choose AppScenic, you have access to thousands of unique and premium products from reliable suppliers that can ship to China and have the necessary experience for shipping to this market. They have fast delivery times and most of them are ready to accept returns. All of these will give you a huge advantage over internal Chinese competitors.
What you also need to have is great customer service and being ok with returns.
So, to conclude, yes, China can be a tough market, but one that can still be worth it if you do your research and have the right dropshipping platform and suppliers to help you.
