Retail Arbitrage with AliExpress, Shopify, DSers

New and seasoned sellers can expand a product line and turn a profit by reselling items from other retailers.

Retail arbitrage is as old as ecommerce itself. The term describes purchasing a product at a brick-and-mortar store and then selling it on Amazon, eBay, or a branded ecommerce site.

The drop-shipped version includes buying from a discount marketplace such as China’s AliExpress.

Let’s examine an AliExpress arbitrage using Shopify and DSers. Shopify is among the most popular ecommerce platforms. DSers is an arbitrage app that helps connect AliExpress to ecommerce shops.

Shopify starts at $29 per month, and DSers at $49. A store owner will also need a free AliExpress account and then set up the three accounts in the order of Shopify first, DSers second, and AliExpress third.

Selecting Products

With DSers and similar applications, the first step is to select the products to be drop-shipped via AliExpress arbitrage.

Dsers and similar applications allow a business owner to find products on the AliExpress marketplace.

From DSers, store owners can search the AliExpress inventory directly using keywords or filters. A single click adds a product to the import list.

Add items at Dsers from AliExpress search results to an import list.

Within the import list, items already sent to Shopify (via other sellers) have a translucent gray banner. Any item can be edited and split.

Products already sent to Shopify by other sellers have a gray bar at the top of the listing. Any product can be edited or split.

Edit a Product

The AliExpress products are typically light on descriptions and information, so editing a product is critical.

First, add a Shopify Collection, Type, Tags, and Vendor.

Before sending a product to Shopify, specify its collection and type.

Next, the AliExpress items may have descriptive but bland titles. For example, one science fiction t-shirt was titled “New fashion Men’s Stars Treks Mr. Gorn Fighting School Vintage Pure Cotton Tees Short Sleeve T Shirts Crewneck Clothing Party.”

I edited this verbose product name to “Star Trek ‘Mr. Gorn’s Stick and Rock Fighting School’ T-Shirt.”

The description section in DSers includes basic product specifications and an overview that could be loaded with images that are not necessarily helpful for the U.S. market. Definitely spend time customizing these sections.

It is also a good idea to check the product variants. This t-shirt example looked horrible when printed on light colors. Eliminating those variants will make for a better product detail page.

The Variant section on DSers is also where you can update the product’s price and “compare at price.”

Remember that loads of other websites will have the identical product — be sure to check their prices.

Update the price and “compare at price” in the DSers app.

Push to Shopify

When the product description and pricing are complete, two button clicks send the item from DSers to Shopify, loading it and all variants into the proper collection.

It may take a few minutes for all of the images to populate in Shopify, and don’t be surprised if you need to clean up the product listing. Organizing the sizes of t-shirts so that they are listed in order as “sm,” “md,” “lg,” and “xl” is a common step.

DSers moves the product information, variants, and product photos into Shopify.

Making a Sale

From a shopper’s perspective, ordering a drop-shipped arbitrage item on Shopify is the same as anything else, with one exception: Shipping will take seven to 10 days.

After completing the sale, the merchant orders the item on AliExpress via DSers. The default setting in DSers is to pay individually for each item in two steps — order it and then pay for it on AliExpress.

Orders placed on the Shopify store appear as orders in DSers and must be purchased on AliExpress.

Inventory Gaps

Online arbitrage can be a standalone business model or used only to fill inventory gaps.

The Shopify store in this article had an inventory gap of no licensed products, essential for t-shirt marketing. Online arbitrage permitted the shop to sell licensed products without buying the inventory.

There is nothing unique or exclusive about AliExpress arbitrage. An identical item will be available from many sellers. Thus marketing is vital.

The job is not so much to post the products as to promote them.

Poor Marketing Kills Ecommerce Dropshipping

Dropshipping is a good way to source products without much investment. Unfortunately, this seemingly turn-key model has little barrier to entry and thus attracts many competitors with razor-thin margins and no clear way to differentiate.

Yet creating a successful dropshipping business is not impossible, provided the would-be entrepreneur understands the growth and profit challenges.

Dropshipping Boost

I once heard ecommerce dropshipping described as “the perfect business model for anyone who wants all the stress and frustration of running a business without any of the pesky profits to worry about.”

While this description is a little unfair to an industry with estimated sales of $351.8 billion in 2024, according to Oberlo, a dropship provider, it also hints at the benefits of starting or scaling a business.

As a business model, ecommerce dropshipping is attractive for a reason: it is relatively easy to start and very low risk.

There are at least four reasons an entrepreneur might be attracted to dropshipping.

• Little or no investment. There is no need to purchase inventory upfront.

• Low risk. Merchants only pay for products they sell, minimizing the risk.

• Access to products. Stores can offer a variety of products without worrying about storage or investment. When I led ecommerce for a retail chain, we would use drop shippers to add complementary products to our site, boosting average order value.

• Flexibility. Sellers can change product offerings based on market trends without significant financial risk.

All of these features focus on product sourcing and financial investment. The trade-off, however, is a marketing problem.

A Marketing Business

Selling drop-shipped items is a choice to focus on attracting and converting customers rather than developing and sourcing products.

Effectively, when you start or scale a dropshipping business, you prefer solving marketing problems rather than sourcing.

And there will be marketing problems. The top three are likely customer acquisition limits, undifferentiated products, and customer relationships.

Not much CAC

Think for a moment about a traditional retailer that orders products from a manufacturer at wholesale prices, warehouses the items, and sells them for, say, a 25% margin.

Thus, a $100 sale will result in a $25 gross profit. If the retailer wanted a return on advertising spend of 4:1, it could invest $6.25 to acquire a customer — that would be its target customer acquisition cost.

The drop shipping supply chain is longer and more expensive by comparison. More parties take a cut of the profit, and some are taking significant percentages because they carry the inventory risk.

A typical margin for a store selling a drop-shipped item may be as low as 10%, according to Shopify. So, the same $100 sale will result in $10 of margin. A 4:1 ROAS puts this shop’s target CAC at $2.50.

If a retailer and a dropship shop sell identical items — a real possibility — the marketing challenge is clear: the dropship store must acquire customers for less.

Same products

Selling an identical product exacerbates the already anemic CAC. Yet selling the same products is what most dropship-based stores do.

This t-shirt is available on a specialty t-shirt shop, AliExpress, and the Dsers-AliExpress Dropshipping app.

Consider the Dsers-AliExpress Dropshipping, an app for Shopify. The product takes an item from AliExpress and adds it directly to a Shopify store. It will do this for any Shopify store, potentially placing the identical AliExpress item in dozens or even hundreds of shops.

Hence it’s not enough to market a store’s products. Operating an ecommerce dropshipping business requires differentiating from many others.

Customer relationships

Marketing tasks should not end when a sale is consummated. Some of the best tactics focus on retaining and engaging those buyers afterward.

Thus building strong customer relationships is crucial, especially in a dropshipping business where the same products might be available from multiple sources at similar prices.

That means investing time in content marketing, email marketing, retargeting, and social media marketing.