Profitable to drop ship via private fulfillment suppliers?

lkw888
Tourist
9 1 0

Hi Everyone,

I watched several YouTube videos which advise to scale up the business by switching from Aliexpress to private fulfillment suppliers like CJ.  However, when I check on their prices, while their product costs are usually same or more competitive than Aliexpress, their shipping and handling fee are much higher such that their total cost of good sold (cogs) is much higher the Aliexpress (though their shipping lead time is much shorter).

For example, a product may cost $5 in Aliexpress with free Aliexpress standard shipping (up to 35 days delivery lead time), the private fulfillment supplier may charge the same $5 product costs but another $5 for 3-7 days shipping cost.  If I price 3x the product cost at $15, the profit is either zero or a loss after I pay the private fulfillment supplier and FB ads.

Appreciate if anyone using private fulfillment supplier can share your thoughts.  For example:

- Using my example above, will you still price at $15 (ie 3x of Aliexpress cogs) or you will price at $30 (ie 3x of private fulfillment supplier cogs) which makes your pricing uncompetitive vs other sellers? 
- Will customers really willing to pay double the price for shorter delivery time?
- Is it possible to have 2 suppliers with 2 prices and 2 delivery time in one single product page in Shopify, ie using my example above, if customers want faster delivery, they choose the $5 shipping fee from private fulfillment supplier and if they don't mind slower delivery, they choose the free shipping from Aliexpress?

Thank you in advance.

 

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