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Note: Shopify is shutting down Oberlo, and merchants have until June 15, 2022 to find an alternative. Shopify recommend DSers and provide an easy migration route through the Oberlo app. More information here. You can also check this post for Shopify alternatives.
The last time I was travelling in Asia, I met a lot of so-called “digital nomads”. They were all hanging out in cafes, typing on their laptops, working on jobs remotely.
A lot of them were running online stores.
But I wondered: don’t you need to manage products inventory and shipping to do that? Don’t you need a warehouse or spare room full of boxes to meet customer demand?
It turns out, not at all if you use dropshipping, which I explored for this Oberlo review.
What Exactly is Dropshipping?
The standard online store model goes like this:
- User buys a product
- The store orders it from supplier
- Supplier ships it to the user
With dropshipping, you remove the middle part. Your online store works with suppliers who ship the product directly to the customer. That means you can run a store without any actual inventory!
For more info on the basics, this video is a good primer:
Advantages of Dropshipping
- Low overheads: to get started, all you really need in theory is a website.
- No storage needed: that also reduces costs.
- Flexible scaling: no need to bulk buy products.
- Not location-dependent: you can run your store anywhere in the world.
- Low risk: you’re not bound to contracts with your suppliers.
Disadvantages of Dropshipping
- Lower margins: shipping costs for individual items will eat away at your profits.
- Reduced control: it’s harder to inspect product quality and to ensure service is good when someone else does it.
- More marketing efforts: Making less from each sale means having to sell more. Usually that means focusing on marketing, which can be daunting for beginners.
- Very competitive: dropshipping is very competitive because everyone can do it. You’ll need to find a niche.
How to Begin Dropshipping with Oberlo
The first things you’ll need are an Oberlo account and a Shopify store (Oberlo works exclusively with Shopify). If you don’t already have the latter, our updated Shopify review should give you all the info you need about pricing, features and benefits.
I found that setting up was fast and painless. Then it was all about browsing and importing the available products on the Oberlo dashboard. There is a one-click option to import from AliExpress, but it only works with Google Chrome at this stage.
Once you’ve added products, you set your target country and shipping options. At this stage, it’s probably wise to edit the product descriptions. It will help match the tone of your store, improve SEO, and maybe add a few flourishes to sell more products. Then that’s it!
Making Your First Sale With Oberlo Dropshipping
Payment is processed via Shopify, so it’s pretty straightforward. Of course, there are different payment gateways depending on the country where you’re based.
Once a customer clicks buy on your store, you are responsible for purchasing the product from the supplier. The supplier will charge you the price of the product + shipping costs. Whatever is left after your purchase is the profit margin.
Choosing Your Suppliers
Oberlo lets you work with three kinds of suppliers.
- AliExpress: the Chinese online behemoth. They have a humongous catalog of products so you can sell pretty much anything under the sun. Quality, shipping times and support may vary a lot.
- Oberlo Suppliers: Also a good amount of products, plus the business licenses are checked by Oberlo. Support is available in English and suppliers ship worldwide.
- Verified Suppliers: The highest quality suppliers who, on top of all of the above, have their warehouses inspected by Oberlo. 95% of their orders are delivered on time, with a low dispute rate (under 2%).
It may be the case that Oberlo doesn’t work for you. If, for instance, you want to sell items from Amazon, you’ll have to use their FBA program. They are very strict about that.
However, selling from Shopify doesn’t limit you to Oberlo. You have other dropshipping options, including Spocket, which specialises in products from all around the world.
One thing to note: Spocket’s focus seems to be on US and EU products, which are generally considered higher quality than their Chinese counterparts. It’s also a boon if your customer base is in the West, because items arrive faster.
Then there’s the option of forgetting about Shopify altogether. With WooCommerce, for instance, you get the powerful AliDropship plugin (read review), which gives you plenty of options for accessing the same suppliers as with Oberlo, but with more flexibility with the rest of your online store.
Oberlo Pricing Review
On top of your domain costs, Shopify costs and marketing (highly recommended), the Oberlo app comes in three plans, and we have an Oberlo pricing overview here.
|Orders per month
|Orders fulfillment monitoring
In all honesty, the free pricing is very attractive for those who are new to dropshipping. It’s a great way to test the waters before committing full time to this kind of online sales.
Handling Refunds, Returns and Cancellations
There will inevitably be times when orders don’t go smoothly. The first thing that springs to mind is when customers cancel their order. This is handled in Shopify. Just go to the order page, find the More link and select Cancel fulfillment or Void label.
Returns are trickier to handle. Neither Verified or regular Oberlo suppliers are supposed to accept returns. However, they can issue customer refunds in the following cases:
- Wrong item was received in terms of color, size, or model.
- Package arrived in damaged condition.
- Item arrived in extremely poor quality.
- Order has gone missing.
- Estimated delivery time has expired.
For reason 1, 2 and 3, the customer will need to provide photographic evidence. AliExpress also has its own buyer protection policy, so make sure you check it before anything goes wrong.
In fact, it’s always a good idea to create a clear refunds policy for your dropshipping business. You can start with the Shopify template and adapt it to your liking.
The Oberlo Customer Support
While there isn’t phone or live support, the online resources are pretty good. You have the Oberlo Help Center, where you can search issues by keyword. The answers are clear and most come with video and text tutorials. It’s well put together.
The community forum is also busy and active. It’s a good place to swap merchant stories, to check the new dropshipping trends and to get marketing advice.
Finally, you can also reach Oberlo support via email [email protected].
Some Examples of Oberlo Stores
Oberlo regularly posts examples of success stories. This is good, but it can be misleading as it often fails to paint the whole picture. A better way to see what Oberlo + Shopfiy stores look like, I think, is to check the Marketplace, or the section of the forum where users ask for feedback.
At the time of writing, this store that dropships accessories is available on the marketplace for a listed price of $5,999. It makes $5,676 a month on average, $3,000 of which is profit. That lets you guess how much they spend on marketing. Of course you have to keep in mind that Shopify can only verify turnover but not costs.
An interesting example of a Shopify + Oberlo store that looks like a blog. It’s using mostly content marketing to attract buyers in the wedding niche.
One of those promoted success stories from Oberlo. Started in 2016, this store specialising in men’s facial hair products grew to make $3,000 a month before the owner sold it for $49,500.
Conclusion: Review of Oberlo for Dropshipping
Dropshipping is an exciting way to launch your career as an online entrepreneur, or to diversify your options. Be warned that it’s not an easy task. It’s highly competitive and overwhelming at times, so not exactly a “get rich quick” scheme.
In fact, be careful of all “testimonials” available online, such as YouTubers claiming they make thousands of dollars a month from dropshipping. They’re often vague about how much they spend on marketing, or how many of their other ventures failed.
Still, Oberlo does make it really easy to get started, especially if you already know your way around Shopify. It’s a great way to try dropshipping as a side project. And using a free trial plan, it doesn’t hurt to test the waters with Oberlo.
Will you give Oberlo a try or do you have a question? Let us know in the comments!
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