5 Takeaways From China-Based  vs. US-Based Dropshipping Review

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Now that you’re ready to take your dropshipping side hustle seriously, you need to think about finding a reliable dropshipping supplier to source products for your apparel business. 

Both China and the US are extremely popular places to find suppliers, but working with manufacturers and distributors from each country comes with its benefits and drawbacks. All of  which can considerably affect your day-to-day operations, your ability to meet customer expectations, and your profitability at the end of the day. 

So today, we’ll go over the differences between China and US-based dropshipping, the pros and cons each offers and how you can benefit from the both options. Let’s get started.

 

Why Venture Into Dropshipping In The First Place?

 

Why Venture Into Dropshipping In The First Place

 

When done right, dropshipping is a very lucrative business model. 

Firstly, you don’t need to hold inventory, so the upfront costs and storage expenses you bear are greatly reduced. 

Secondly, it allows you to offer a wide range of products with the flexibility to dump slow-moving products and scale with high running the risk of unsold items. 

And thirdly, dropshipping takes the complexities of order fulfillment and shipping logistics off your hands, enabling more streamlined and scalable business operations on your end.

These benefits make dropshipping an attractive option for anyone looking to start an ecommerce venture with low startup costs, minimal financial risk and little operational overhead.

China Based Dropshipping vs. US Based Dropshipping  

 

China Based Dropshipping vs US Based Dropshipping

 

Now, let’s compare China and US dropshipping in terms of:

  • Product quality
  • Inventory
  • Shipping speed
  • Ease of returns
  • Upfront and startup costs

Depending on your priorities, these metrics will help you determine the best option for you. 

Here we go:

1.Product Quality

 

Product Quality

China and the US are both home to high-quality product suppliers. 

However, there’s a common bias toward American products that makes people think they can only find quality in the US. 

But in reality, a lot of American products fetch a higher price point, sometimes two to three times the price of their Chinese counterparts without necessarily justifying the premium. 

As a startup looking to maximize costs, going “all American” is not be a sustainable choice, especially as the performance of those products are relatively the same or even poorer than their Chinese counterparts. 

That being said, sourcing from the US is still a great idea because of the strict federal government standards that force suppliers to focus more on creating quality products. 

Still, sourcing from China suppliers will guarantee you the added benefit of cost savings which you can reinvest into your business. 

Takeaway 1:

China and the US are both great sourcing destinations. But, as a startup, finding the best suppliers in China will help you get  high quality goods you need at 2-3 times lower the cost of the same American goods.

 

2.Inventory & Product Availability

 

Inventory & Product Availability

As you kick off your dropshipping business, you’ll understand the importance of having reliable suppliers that keep the right products stocked and readily available all the time.

When your supplier suddenly runs out of a high-in-demand product, your dropshipping store can’t fulfill customers demands on time, leading to a negative impact on your brand perception and simply less business for you. 

Marketplaces like Alibaba, JD and the like have built a mature ecommerce market in China that contributes 33% of total retail sales today, so product availability is never an issue.

Put another way, due to the high demand existing in China, there are many different suppliers in the industry competing to sell many different products. So, as long as there’s demand for what you want to sell, there’s generally a range of China suppliers to fulfill your need.

Whereas, dropshipping vendors in the US may be more limited in their offerings and unable to provide the full range of inventory you’re looking for. This is because the costs associated with labor and manufacturing in the United States can be very expensive and unattractive. 

Avoiding stockouts is crucial because customers will only get frustrated with your company when the products they want are never available.

Takeaway 2

When it comes to inventory, your best bet is Chinese suppliers. This is because most manufacturers in China focus on operating an efficient production facility that can mass-produce many unique and high-quality products at a competitive price point. 

 

3.Ease of Shipping

 

Ease of Shipping

Amazon time has changed what it means to compete. Today, consumers expect two-day shipping as a minimum (even though not all vendors can make that). 

And as such, it becomes difficult to convince potential customers to buy your products if it means they have to wait longer than average at your store. 

When you work with a China supplier, shipping to customers will be quick. For customers based in China and nearby countries, you can expect to deliver their products in less than a week. Similarly, with China’s express shipping services, your customers in the West will only have to wait 3 to 15 days for their products to arrive, depending on the distance and shipping method.

Likewise, when you dropship from the US, shipping will be quick for your customers in America and nearby countries. But it may not be the same story for customers based outside that region. 

Takeaway 3:

Even though the distance between China and the US or Europe is a long way out, China’s shipping services make international shipping simple. Your customers within and outside Asia can expect their products within a week or two weeks at most. 

 

4.Ease of Returns

 

Ease of Returns

Data from Coresight Research shows that at 27%, apparel businesses suffer the highest number of returns compared to other industries. 

So when eligible customers demand a return at your store, you want to offer an easy and efficient return process that keeps customers happy while minimizing losses. 

When you work with Chinese dropshipping vendors, you may find the returns process for customers in Western countries more complicated than with dropshipping vendors in the US. 

Moreover, the cost of shipping the item back to China could even cost more than the product itself, which, in that case, it’s better to refund the customer and let them keep the product. 

Why I say this is because customers find comfort in the guarantee of returns, meaning if you choose not to offer returns, you run the risk of scaring potential customers away. 

Takeaway 4:

Just like shipping time, with China dropshipping, the ease of returns for your customers outside China and Asia will be less convenient. Whereas, with US dropshipping, your returns process will be simpler.

Again, by working with a cross border fulfillment agent that operates US warehouses, you effectively solve the problem of distance and shipping time. In this case, you can find a reliable sourcing and fulfillment partner in Globallyfulfill.

 

5.Upfront and Startup Costs

 

Upfront and Startup Costs

If you lack much capital, a China-based dropshipping business is significantly cheaper to get off the ground. As production in China is less expensive, the final products themselves cost less on the market, which is why China dropshipping is so popular. 

The main disadvantage of US-based dropshipping is that the production expenses are high, which is why running a US based dropshipping business is more capital-intensive. Put simply, the products end up costing more because the production process costs more.

 

Takeaway 5:

Because China based dropshipping is less cost-intensive, it makes a good choice for startups. 

Equally, dropshipping in the US is an option you’ll want to pursue because of the business potential the American market offers. Just know it’s going to cost more to get off the ground.

 

Final Thoughts on Dropshipping from China vs. US

To sum up, as you enter into dropshipping, you’ll want to compare the perks and drawbacks of China and US-based dropshipping to the option that best suits you. Here’s the lowdown: 

 

Final Thoughts on Dropshipping from China vs. US

 

If you’re on a budget and looking to make the most of your funds, China is the way to go. Products come at a more affordable price point, suppliers tend to have ample and diverse stock, and delivery is cost-friendly and speedy for local customers. 

However, if your priorities are shipping speed and ease of returns for your customer base in the West, working with US based dropshipping vendors is a good move. It may come at a higher cost, but rest assured that your Western customers will appreciate faster delivery times leading to repeat business and easier returns. 

To make the most of both worlds, we recommend taking the middle ground.

 

fulfillment centers

 

With our fulfillment centers that are strategically located in six of the leading ecommerce countries, you can combine the benefits of China sourcing with Western dropshipping. Your customers in these locations won’t have to wait absurd shipping times any longer, leading to repeat business and greater revenue for you. Get in touch with us today!

 

China vs. US Dropshipping FAQs

1.Is it better to dropship from China or the USA? 

If costs are your main concern, yes it is better for you to dropship from China. 

 

Whereas, if shipping speed and ease of returns are your top priorities, working with suppliers that operate in the US is best for you. 

Remember, working with Chinese vendors doesn’t mean you must export products from China. You can find yourself a Chinese supplier with storage facilities in the West that allows you to give Western customers prompt shipping.

 

2. What is the cheapest shipping method from China? 

 

What is the cheapest shipping method from China

Sea freight is the most affordable option for shipping from China to the USA. 

It’s a method best suited for large shipments that are not time-sensitive. The shipping time can take anywhere from 4-6 weeks, but the cost savings can be significant.

 

3. How long does it take to dropship from China? 

When you drop ship from China, there are dozens of shipping options, all with their varying costs; 

Postal services which are reliable and affordable can take anywhere from 2 – 4 weeks

Sea freight which we’ve established is the cheapest will take between 4-6 weeks. 

And air freight – the fastest and most expensive – can take anywhere from 3-7 days. 

Alternatively, you or your fulfillment agent can enlist a courier service like FedEx or DHL, as they are fast and suitable for time-sensitive orders and tiny packages. 

In this case, having a high-volume agent like GloballyFulfill at your back will benefit you as we can often negotiate lower rates because of the bulk of packages we handle.

 

4. How can I get cheap shipping from China?

To secure affordable shipping from China, follow these three steps: 

Compare Shipping Methods: Start by comparing shipping methods such as postal service, sea freight, air freight, and courier services. Then choose the method that fits your budget, shipment size, and urgency. 

Use a Freight Forwarder or 3PL: To get cheaper shipping, you can work with a reputable freight forwarder or third party fulfillment service. These professionals have expertise in navigating shipping logistics, customs clearance, and can often negotiate better rates, ensuring you get cost-effective shipping solutions. 

Optimize Packaging and Discounts: Efficient packaging that reduces weight and size can cut costs. So ask your shipping service about bulk discounts and packaging your products to cut costs. Also refer to our guide to optimizing packaging. By combining these strategies, you can find cost-effective shipping options when importing goods from China to the USA.

 

5. Is dropshipping from China profitable in 2023? 

Of course! Dropshipping from China in 2023 is still very profitable, because;

(1) you’re not responsible for manufacturing or shipping, and 

(2) you can save costs when you work with Chinese suppliers. 

However, starting a dropshipping business is highly competitive as you will compete with many companies selling similar products at similar prices. 

That’s why, to eventually strike profitability, you’ll need to focus on the crucial aspects of your business – your products, marketing, and customers. 

Like many successful dropshipping stores, this may require you to delegate the non-productive parts of your business operations like packaging and fulfillment to a reputable 3PL provider.

 

6. How to explain shipping circumstances to US customers?

 

How to explain shipping circumstances to US customers

As a rule of thumb, always be upfront with customers about your delivery methods and capability. Explain to them the various shipping options available and the costs of each. This is no problem, as most buyers understand that they get what they pay for. 

To combine the benefits of both options, work with a China dropshipping agent to move enough of your high-velocity products to a fulfillment center in the US. 

Thankfully, you don’t have to look far for this. As we’ve said before, you can enjoy faster US shipping by housing the right products in our fully integrated and robot-enabled US warehouse. 

 

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