Free shipping is the most popular shipping method applied by Shopify sellers when dropship from Aliexpress, many people may wonder how the Aliexpress sellers make profit for the products $2.99 to $4.99 with free shipping service. Actually free shipping is a commonly used marketing strategy for dropshipping business, no matter $4.99 or $9.99 free shipping the sellers aimed at traffics then make profits on upsell or higher profits product in the store. Meanwhile, more and more Shopify sellers want to provide cheap yet fast shipping delivery service to clients, free shipping vs paid shipping which is better for goods dropship from China?
How to launch $9.99 product with free shipping service
Basically it is only available for big sellers as they mainly use cheap product attract traffics and make profits for high cost products, but we should know the tricks. Let’s take ring for example.
We can see that the 4 products with the highest sales have very low prices and marked free shipping service. Let’s see how this happened, a ring weight 0.008kg, then let’s take the United States and Russia as examples to calculate the shipping cost of the 0.008kg package to these two countries via unregistered air mail, both less than 10 yuan. Add the ring cost, the Aliexpress seller slightly loss some money or equal their cost, but they get traffics for other products. If the seller strives to reduce various controllable costs via the following ways with high sales, they do not lost money at all:
1. Logistics cost control: adopt light and small commodity plan; optimize packaging size;
2.Manufacturing cost advantage: Many other cost-saving operations involving the supply chain need to go deep to the supply side, so that you can know which costs cannot be saved and which are optional;
3. Leftover stock: Some sellers do not have the factory resources themselves, but they are good at finding factory leftover stock and get the price of less than 30% of the bulk purchase which is a very good profit margin.
Thus, we can see free shipping on Aliexpress mainly being seen as a marketing strategy for traffics and conversation rates, as a Shopify seller we can apply free shipping strategy but not the same way as we do not have supply chain source, but we can apply free shipping as a more flexible way as Aliexpress free shipping also have disadvantages:
1. Slow delivery. Free shipping doesnt mean shipping cost is free, the sellers usually choose the most cheap way to ship goods which usually takes 1 to 2 months. During covid19 it might take even longer;
2. High package lost rates. The package usually ship via air mail which cannot be tracked and easily lost;
3. Bad user experience. The free shipping service usually cause bad user experience as the delivery time takes long time.
Pros and Cons for paid shipping from China
When clients choose paid shipping they want to pay for more faster, stable shipping service and want the package can be tracked compared to free shipping service. Let’s see the available paid shipping service for packages shipping from China.
ePacket is an economic shipping service from China to overseas, it can be tracking and cost effective, 4PX Yunexpress can be seen as ePacket alternatives which has similiar shipping rates but faster and stable small package delivery service. DHL FedEx are couriers for 3 to 5 days worldwide fast delivery service. We can check the above shipping services and their precautions for packages shipping from China, then compare their advantages and disadvantages to select the best shipping service suitable for the client requirements. No matter free shipping service or paid shipping service our target is to make profits for the dropshipping business while provide better user experience.
Free VS paid shipping which is better
It is hard to say free shipping is better than paid shipping as different clients have different requirements, both of them can be options for your dropshipping business and their pros and cons are complementary. Mostly Shopify sellers prefer to provide ePacket or 4PX, Yunexpress as free shipping service for goods shipping from China, while use dhl or fedex as paid service for faster delivery.
However, the free shipping service also have costs, when we offer free shipping service on Shopify, we will also need add the shipping cost into the product price while make its price more competitive. Thus we will need to follow the certain rules:
1. Light weight volume goods. The product volume weight should be under 0.7kg, else the shipping cost will be high, in return the product price will be not competitive;
2. High value goods. Since we are aimed to make profits, we cannot earn money for the low price products as we cant control supply chain, the product selling price usually above 20 USD;
3. Set free shipping amount. For example, if our store sell jewelry accessories and price range from $5 to $20, we can set free shipping for order amount above $30, which means clients get free shipping service with at least 2 items, in this way you can also make profits while make your product price competitive.
If we also want to offer paid shipping service, which means we will need to sell high value goods, the average order value should be above $50. Why? Let’s take jelwerly accessories for example, the price range from $5 to $20 in shopify store while the shipping cost for DHL FedEx starts from $25 shipping from China to USA and EU countries, which makes clients less willing to pay. However, if the store average order value above 80 usd, it’s more likely client are willing to pay for faster shipping delivery. If the store average order value has more profits, courier service can also be considered as free shipping service in the store.
Of course, no matter free shipping or paid shipping we offered for Shopify dropshipping, we should list estimated delivery time for client to choose, furthermore, we will need to inquire clients to check the shipping address, post code, phone number before they pay in case delivery failed to reach them. In short, the more detail shipping terms, the less aftersale issue and more better user experience.
In the past 2020, the shipping rates increased crazily while the delivery time cannot being guaranteed due to COVID19, which is big challenge for the dropshipping business, when we plan free and paid shipping service for dropshipping business, we should also take different shipping plans and solutions into consideration. ShipAnt provides one step 1688 Taobao order fulfillment service for dropshipping business, no matter free or paid shipping service we can help you dropship from China hussle free, you are welcome to inquire the best way dropship from China.