This Ali Express to Shopify Dropshipping Business was Both a Success and a Failure

Hey guys, today I wanted to share someone's story about setting up an Ali Express to Shopify Dropshipping business.

Now this side hustle I would say was both a success and failure. How is that possible you may ask? Well it was a success in the sense on day one of rolling out the store he had 600 visitors to his site and made 4 sales. That's pretty good for day one.

Where the failure part comes in is more how the business was setup. This guy was dropshipping Ali Express motorcycle helmets to Shopify customers. The problem however wasn't long shipping times or chargebacks or returns. The problem was he was only marking the product up $5 or $10 per unit. He hadn't taken into consideration Paypal fees which ate up pretty much all of his profit.

He wound up shutting down the store after the first day because he realized it wasn't going to be profitable, however there's another problem he would have incurred down the road. This problem is that making such small margins is not feasible and I'll tell you why.

So let's say he's buying the helmets for $50 and selling them for $55. Let's assume Paypal fees are not even being taken out so we'll assume he keeps that full $5.

If he has a package lost in the mail, a customer return, a customer chargeback and loses $50, because he's only making $5 per sale it's going to wipe out 10 successful sales ie 10 sales x $5 = $50.

On the other hand if he was getting these helmets for $50 and selling them for $150, if he runs into an issue ie chargeback or whatever else he's out $50, so he could essentially have 3 sales go bad and still be at break even.

The point with such small margins is it leaves no margin for error and in life and in business things happen and there's going to be some losses.

Now I have to give this side hustler props for a few things. First, he has 100K Instagram followers interested in his niche before he even started so he has a built in audience, that's awesome.

Two, while he didn't leave himself a big enough margin, I also have to give him props for not being greedy marking up the product. Now I talk about this alot but the reason most consumers buy off Ali Express is because of the low prices.

When I buy offAli Express I'm willing to deal with a poor return policy and a long shipping time because I'm getting a discount, that's typically the reason.

Now when you as a dropshipper mark the product up 3x to 5x and are charging retail price, and the customer still has to wait a long time to receive it the value proposition goes out the window so I do want to give this hustler props for being reasonable with his markup, however unfortunately it just doesn't make for a sustainable business with those margins.

Anyhow guys, I've made a few videos like this recently. Just wanted to share some of the problems and pitfalls with this method so you can keep these things in mind when setting up your site hustle dropshipping business