If you’re new to dropshipping, or can’t figure out how to get started, you may be wondering about the differences between Aliexpress and Alibaba. With extremely similar names, it can get confusing distinguishing the two.
However, you should know that they are both massive online marketplaces where you can find suppliers for your dropshipping stores.
As a dropshipper, we recommend that you use Aliexpress to find your suppliers and products. Although Alibaba has its own benefits, Aliexpress offers much more convenience and functionality. We’ll discuss in detail the differences between both websites and why Aliexpress is indeed the dropship winner.
Continue reading so that you have a full understanding of both platforms and the advantages they have to offer.
Before diving into the specifics of the two websites, it’s important to cover what dropshipping is and the role that Aliexpress and Alibaba play in the business model.
What is Dropshipping?
Dropshipping is a business model where online stores don’t hold any inventory or stock. Instead, the online store has the supplier ship the items directly to the customer.
You will find your supplier using Aliexpress. The main advantage of this business model is that you don’t need a lot of initial capital to start generating cash flow.
Here are the steps laid out so you have a clearer understanding of what dropshipping is:
- Create an online store using Shopify (recommended) or another ecommerce platform
- Find products to sell on Aliexpress and import them into your store
- Run advertisements to your online store using Facebook Business Manager
- Customer places an order from your online store
- Fulfill the order on Aliexpress using the customer’s shipping information
Since you only pay for the cost of goods after an order has already been placed, you avoid risky and expensive inventory costs.
Furthermore, you have the ability to test a variety of products.
We recommend you have at least $500 before starting a dropshipping store.
Standard dropshipping startup costs include:
- Shopify Monthly Subscription ($29) – Shopify offers 3 different packages with the basic package priced at $29/month. Basic Shopify is completely suitable for dropshipping because it has all the features you need. Check out our article “Shopify Plans Comparison: Find The Right Plan For You” to learn more about Shopify.
- Various Shopify Applications (~$25/month) – There are a few Shopify applications that we recommend dropshippers use. These include a shipping tracking application called ‘Tracktor’ and a product review application called ‘Loox Reviews’.
- Website Domain (~$10/year) – This is the URL you will be purchasing for your store. We recommend using namecheap.com to find and purchase your domain.
- Google Workspace Monthly Subscription ($6) – The Google Workspace was formally known as G Suite or Google Suite. Google Workspace allows you to create a custom email for the URL you purchased. The purpose of this email is to create a customer support email for your website. For example, if you purchased the domain clothingstore.com, you could make an email account named email@example.com. This email will send order confirmations, tracking numbers, and also allows customers to conveniently ask questions to a legitimate looking email. Support@clothingstore.com looks much more trustworthy than firstname.lastname@example.org
- Cost of Goods (varies) – The cost of goods is the price of the product including shipping from Aliexpress. This cost varies because it strictly depends on your specific product.
- Advertisement Costs (varies) – We recommend that dropshippers use the Facebook Business Manager to run advertisements to their online store. Facebook Business Manager allows you to run ads on Facebook and Instagram. This cost varies because it depends on the specified budget you input.
As you can see, it’s not expensive to start a dropshipping business. However, we recommend at least $500 to begin with so you have enough capital to test different advertisements and products. The bulk of your initial investment will be running advertisements and it may take a few tries to see success.
Please refer to our YouTube channel with over 100,000 subscribers if you want to learn more in-depth information on dropshipping and Facebook ads.
Now that you fully understand the dropshipping business model, you may be wondering why finding a supplier is so important.
What purpose do Aliexpress and Alibaba serve?
You will be using Aliexpress or Alibaba to find the products and suppliers you want to use for your store. Since these suppliers will be shipping the items directly to your customers, they play a vital role in the dropshipping business model.
The reason dropshippers use Aliexpress and Alibaba instead of other websites is because of pricing and global reach. The prices are much cheaper than what you’d find on Amazon or another store.
Furthermore, they ship to over 190 countries and regions around the world at extremely low-cost shipping rates.
Aliexpress and Alibaba are able to make their products so affordable because the suppliers are mainly from China and can take advantage of inexpensive labor and factory fees.
Furthermore, since the products are made in China and the suppliers live in China, they don’t have to pay massive fees to ship their inventory from the factory to their warehouses.
For this reason, the majority of dropshippers use Aliexpress and Alibaba for their suppliers.
Are Alibaba and Aliexpress the Same?
Simply put, Aliexpress.com and Alibaba.com are not the same. Although they are both owned by the same parent company called Alibaba Group, they offer different functions.
The graphic below displays a few subsidiary companies of Alibaba Group and the year they were created.
It may confusing distinguishing Alibaba Group and Alibaba.com since they have the same name. However, you can see on the image above that Alibaba.com is one of Alibaba Group’s subsidiary companies.
Alibaba.com is a B2B (business to business) platform. Alibaba’s focus is to connect Chinese manufacturers and wholesalers to international businesses in need of inventory.
On the other hand, Aliexpress is a B2C (business to consumer) platform. Aliexpress functions more like Amazon or any other traditional ecommerce website because it was made for everyday online shoppers.
An important detail to highlight is that both of these marketplaces were made specifically for international buyers. Aliexpress and Alibaba don’t allow customers in mainland China to buy from these platforms. Alibaba Group has separate websites designated for Chinese consumers.
Dropshipping’s meteoric rise in popularity can be largely attributed to the globalization that Aliexpress and Alibaba bring to the business model.
These marketplaces ship to most, if not all, countries around the world.
Remember, these websites are completely unique from each other and offer different functions. The main difference between the two marketplaces are their functionalities and purposes.
Alibaba has a minimum order quantity (MOQ) meaning that buyers must purchase a bulk supply. Aliexpress offers slightly higher prices per unit but doesn’t have a minimum order requirement.
Is it safe to use Aliexpress and Alibaba?
Alibaba and Aliexpress are two of the most visited online marketplaces in the entire world. To paint a picture of how enormous the Alibaba Group is, its revenue in 2019 was over $55 billion and they have the 6th highest global brand valuation. Furthermore, Alibaba Group is the 5th largest internet company in the world.
Although you may be skeptical about using a foreign website, based on our personal experiences and millions of others around the world, it’s completely safe to shop on these marketplaces.
Aliexpress offers buyer protection on every purchase. This means buyers have a money back guarantee if the product is not received within the buyer protection period or the product is not as described.
Alibaba offers trade assurance which is a built-in protection service that covers all order places on the website. Trade assurance protects the buyer in the event that the supplier fails to ship the items on time or the product quality varies greatly from what was agreed upon.
What is Alibaba?
Alibaba.com is the world’s leading B2B platform for wholesale trade. It connects Chinese manufacturers and wholesale suppliers with small to medium businesses around the world.
Since Alibaba is a B2B marketplace, items are only sold in bulk unless they are purchased for sampling purposes.
For this reason, we don’t recommend using Alibaba.com as a beginner, or even ever, as a dropshipper because the dropship business model is only advantageous when the supplier directly ships single items to your customers.
Alibaba is simply a marketplace that connects sellers and buyers. The company, Alibaba, doesn’t actually sell any of the inventory listed on the website.
This is where the marketplace differs from Amazon because Amazon actually owns inventory and a supply chain of merchandise and sells directly to shoppers.
The way Alibaba makes money is by taking a commission from each transaction along with charging subscription fees to sellers who open up listings on the website.
Members who sell products on Alibaba are almost strictly resellers, trading companies, and wholesale manufacturers.
Since Alibaba has a minimum order quantity (MOQ) requirement on the items listed on its website, the price per unit is cheaper as you purchase a larger quantity.
When to Use Alibaba
Although the products on Alibaba are potentially cheaper than Aliexpress, this is because they require a minimum purchase-order quantity. For this reason, dropshippers should avoid using Alibaba to find products and suppliers.
However, sellers who have products on Alibaba usually have listings on Aliexpress as well. So if you find products you’re interested in on Alibaba, you will usually be able to find it on Aliexpress.
Remember, Alibaba is a strictly B2B marketplace and ordinary shoppers will rarely use the website to purchase products. Alibaba.com only sells items in bulk, which completely negates the dropshipping model.
Alibaba should be used by traditional businesses that have their own warehouses and do their own shipping. Traditional businesses looking for inventory can browse Alibaba to find potential products to sell.
If you find a product you’re interested in, we recommend messaging the supplier and ordering a sample of the product first. It’s imperative to gage the quality of the product with a sample before committing to a large bulk order.
Although Alibaba shouldn’t be used by dropshippers, it’s a great choice for businesses looking to private label their products. When it comes to finding private label manufacturers, Alibaba is a fantastic source.
Alibaba suppliers are usually willing to manufacture custom products or add your logo onto existing products.
If you find a product or supplier you’re interested in, we recommend messaging the supplier and laying out your specific request. Most products on Alibaba allow modifications, so don’t be shy about requesting for specific customizations.
For example, you can put your brand name on the products or ask them to make a completely custom product. Alibaba is the best choice if you’d like full control over the branding, packaging, invoicing, and labels on the products.
As far as shipping times go, look for the ‘Lead Time’ on the product page. The ‘Lead Time’ is how many days your product will ship within after the payment is sent.
The ‘Shipping Time’ is how long the product will take to be delivered to you depending on which shipping method you selected.
We highly recommend messaging the seller about their timeline based on how many units you want to purchase.
In summary, Alibaba has some of the lowest product pricing in the entire world. The bulk order requirement as well as being able to source products from China allow Alibaba sellers to keep prices extremely low. If you need customized items and wholesale supply of your inventory, Alibaba is the solution for you.
However, if you are a dropshipper, Aliexpress is a much more logical option. Let’s discuss why.
What is Aliexpress
Aliexpress, on the other hand, has no minimum purchase requirement and allows users to buy single unit products. For this reason, the prices are slightly more expensive than Alibaba which makes sense because you buy in bulk from Alibaba.
Although many people think that Aliexpress is a wholesaler, it’s actually a retail marketplace that is B2C (business to consumer) focused. Just like Amazon, Aliexpress is a website designed for everyday online shoppers.
Aliexpress is able to compete so well in the online retail ecosystem because of its low-cost products and international appeal.
As we discussed earlier, Aliexpress is a Chinese marketplace that only sells to international shoppers.
Aliexpress offers extremely affordable shipping along with their affordable product prices.
Shipping methods will depend on your supplier, but the majority of suppliers offer ePacket and Aliexpress Standard Shipping. These shipping methods are usually free or very inexpensive.
Since the products are shipped from China, buyers are usually worried about pricey shipping costs.
However, shipping is subsidized by the Chinese government which means Aliexpress sellers can affordably ship internationally. The government subsidized shipping to protect its competition in the global market while keeping massive scale.
Low product prices as well as shipping costs make Aliexpress extremely lucrative for online shoppers and dropshippers.
When to Use Aliexpress
If you’re building a dropshipping store, we recommend only using Aliexpress to find your products and suppliers.
Alibaba’s minimum order quantity prohibits the dropshipping business model. Buying a large stock of inventory goes against all the principles and advantages of dropshipping.
Dropshipping is so advantageous because you only need to pay the cost of goods after receiving a payment for an order on your store.
This allows you to invest less money into inventory and gives you room to test different products and advertisements.
We’ve been using Aliexpress to find products and suppliers for the past three years and have generated dozens of 6-figure dropshipping stores. Furthermore, thousands of members of our dropshipping community have seen success using Aliexpress.
Join our Verum Ecom Facebook Group with over 50,000 active members to stay updated and engaged in dropshipping.
Aliexpress offers millions of different product listings. Since it’s a consumer focused marketplace, you will be able to find a lot of potential products to sell.
How to Dropship from Aliexpress
Now that you understand why Aliexpress is the best source to find your dropshipping products, it’s time for you to take action and create your dropshipping store.
For a more in-depth look at Aliexpress and how to find the best suppliers, check out our article titled “What is Aliexpress – Is It Legit?”
To learn how to create a dropshipping store using Aliexpress, check out our article titled “How to Dropship from Aliexpress: Getting Started Guide”.
Both of these resources should offer more than enough information for you to get your dropshipping store going.
Aliexpress vs Alibaba Conclusion
At this point, there should be no point in even considering using Alibaba as a dropshipper. Alibaba’s minimum order quantity prevents dropshippers from utilizing the marketplace. Aliexpress offers all the features needed for a successful dropshipping store.
From affordable prices and amazing product selection to suppliers willing to work with dropshippers, Aliexpress is an incredibly useful website.
If you’re interested in taking the next steps, please read the two articles we referenced above. Finding products and setting up a dropshipping store is relatively straightforward, however, there is a lot of information dropshippers need to know to increase their chances of success. Finding a reputable supplier on Aliexpress is an imperative step in the dropshipping business.