What's dropshipping?Dropshipping is an eCommerce business model that Customer places the order and pays the retail price to Retailer (you), retailer forwards the order details to Supplier and pay the wholesale price. And then Supplier ships the products directly from their warehouse to the Customer.
Dropshipping is considered as a great way to kick start a startup eCommerce store. It is the preferred choice for many successful eCommerce entrepreneurs who don’t want to indulge in the intricacies involved in inventory and shipping management.
How to earn money on Dropshipping?The Profits come from the difference between the retail price and wholesale price. So, if you want to increase your profits you can raise your prices — at least as much as your customers will bear. And you can always contact your supplier to negotiate a lower wholesale price to reduce your costs.
Sounds easy, right? But what exactly should we do to earn more money? How to negotiate a lower wholesale price? Now, I will share some tricks about how to reduce the cost of AliExpress Dropshipping (Increase your profits).
Here are 3 Tricks to Increase your profits on AliExpress Dropshipping:h3>#1 Cashback (AliExpress Affiliate) This is the most popular way to reduce the cost of AliExpress Dropshipping.
AliExpress affiliate is the same thing as any other affiliate programs. You are provided with a special link to AliExpress products and you can purchase orders through this link to earn commission on each product that’s sold.
The rates of commission are varying depending on the types of products. The average commission rate is around 5%, some promoted products even pay as high as 50% of commission on each sale. So, your actual cost will be the purchase price minus the commission. For example, you purchase an item for your customer on AliExpress with price 10.00 USD and get 8% commission from AliExpress, your actual cost will be 10.00 - 0.80 = 9.20 USD. The commission will be your extra profit!
Tips: ShopMaster has cooperated with Admitad to offer dropshippers AliExpress Affiliate service, you can get the commissions automatically when purchasing orders through ShopMaster extension.
#2 Get refund/commission from the sellerIs there a way to get more commission besides the Affiliate?
The answer is YES!
When you're running a dropshipping store and get orders each day, you can try to contact the supplier (seller of AliExpress) directly and ask for a partial refund for all your orders. The sale manager may happy to offer you the refund because you're a customer who can bring them more orders and help them to achieve the sales target.
If you could make a deal with the sale manager, you can provide orders you have purchased and let he/she refund you via PayPal or other ways.
So, make a deal with them, and get the extra profits!
#3 Get VIP price
We introduced AliExpress affiliate, but you will find sometimes there is no commission paid even purchase through the affiliate link. Why? The commission paid by the sellers of AliExpress, not AliExpress company itself. You will not get the commission if the sellers have not joined the Affiliate program.
Remember that bit about negotiating a lower wholesale price? If you have a winning product, it is time to contact your supplier to negotiate a lower wholesale price and reduce your costs immediately. Usually, the supplier will list a special product with the VIP price on their store. Then you can purchase orders for your customers with this product directly.
Did you get these tricks? Just try them and earn more money!
Remember, the more you earn, the higher your dropshipping businesses valuation is. You can check the current valuation of your business at a reputed online business broker.