As the focal point of international China dropshipping, China has developed a supply base with optimal cost advantages and dependability. According to data of the General Administration of Customs, China’s cross-border e-commerce export volume reached 1.83 trillion yuan in 2023. Among them, 72% of the orders were served by Pearl River Delta and Yangtze River Delta areas’ dropshipping sellers, with average procurement costs 58% to 65% cheaper than that of European and American domestic sellers. For example, consider the 1688 platform. It has over 120,000 certified “super Factory” suppliers. Merchants can purchase electronic accessories and home appliances for a minimum of 0.8 to 3 US dollars per unit in bulk and have the assurance of delivery within 48 hours. Its delivery rate of orders on time reaches 92.6%, 31 percentage points above Southeast Asian suppliers.
The quality control system lends legitimacy to the suppliers. Statistics of a Shenzhen third-party quality inspection company indicate that in 2023, the proportion of China dropshipping suppliers that passed the ISO 9001 certification increased from 28% to 47%, while the rate of product returns dropped from 8.3% to 4.1%. Take Shein as an example. It monitors 4,000 Chinese suppliers’ production in real time with its own in-house developed supply chain management system, keeping the defective rate below 0.8%, supporting an average daily delivery scale of 300,000 orders, and holding a customer satisfaction rate of 94%. The “Factory Inspection VR” function launched by Alibaba International Station has increased the rate of online inspections of suppliers’ factories to 67% and cut the cycle of procurement decision-making by 40%.
The model of flexible cooperation reduces cooperation risks to a minimum. Research suggests that Chinese dropshipping suppliers employing the tactic of “on-demand buying + tiered pricing” can increase merchants’ inventory turnover rate from an average of 5 times a year to 9 times. In 2024, the small commodity suppliers of Yiwu in Zhejiang Province introduced a “minimum order of 100 pieces + 15-day payment term” policy, allowing 30,000 small and medium-sized sellers to decrease their initial investment below 500 US dollars. Among them, those in the home furnishing sector achieved break-even in 6.2 months on average, twice as fast as the traditional wholesale model. The “Supplier Direct Warehouse” business service introduced by cross-border logistics company 4PX has fixed the US market delivery price at 1.5 US dollars per kilogram and cut 37% of the operational expenses of the independent construction strategy of the warehouse.
Data technology drives the effectiveness of supplier screening. Data statistics offered by Jungle Scout show that for the traders using the AI product selector tool to determine the China dropshipping trend, the accuracy rate of the best-selling product forecasting is increased from 32% to 58%, and the trial and error cost has decreased by 76%. Temu used its web crawler system in 2023 to grab the data of the TOP 100,000 products on Amazon in real-time. It completed matching Chinese suppliers within 72 hours, increasing the top-selling product listing speed threefold compared to its competitors and driving its user base in the US to over 110 million. A Shenzhen auto parts vendor used Google Trends data to access the North American demand. Through 1688, 25 qualified suppliers were filtered out. The first month sales reached 80,000 US dollars with a insignificant return rate of only 2.3%.
Ensure the feasibility with huge cases. There is a special clothing supplier in Ningbo who provides a “48-hour sample making + 7-day mass production” service for 27,000 dropshipping stores all over the world. It has flexible single order quantity adjustment between 50 pieces and 50,000 pieces, and costs 29% less in production compared to Bangladesh’s factory. According to the reporting by Payoneer, China dropshipping average seller growth rate was 45% annually in 2023. With them, the median store ROI of stores with average transaction value of $30- $50 was 180%, showing that with rigorous supplier review mechanism, low cost and reliability could be balanced at the strategy level.