27Dec
By: Tomas Šlimas December 27, 2016

In this drop shipping case study, we’ll cover why you should dropship outside the USA. You’ll learn about the disadvantages of dropship USA. Dropshipping USA products isn’t sustainable. Thus, we’ll cover how dropshipping AliExpress products can allow you to reach a global audience.

Recently, our community fellow at Ask.Oberlo @KerrieWilson asked:

I am wondering when first starting out should I just market to the USA rather than other smaller markets?

When writing an answer, at first I quickly decided that dropship USA is the right choice, but then I started to have doubts. Is it really the best market for dropshipping? After digging deeper, here’s what I’ve found.


By dropshipping with AliExpress, you can literally sell anywhere and everywhere. A lot of suppliers ship to dozens or even hundreds of different countries, from G8 members to tiny countries like Kiribati (a country in Oceania). Meanwhile, dropshipping USA products wouldn’t allow you to take advantage of the global market as easily due to lower margins.

drop shipping USA case study

A hat that can be delivered to Kiribati (a country in Oceania)

However, most store-owners sell only to the US because they don’t feel like their store is ready for a grand global expansion.

Their store is only in English and they can only provide English support. Besides, shipping to locations outside the US often takes more than 30 business days while getting parcels delivered to American addresses using ePacket only takes 14 days..

But the US market isn’t ideal…

Disadvantages of the Dropshipping USA Market

Below I list a few disadvantages of the dropshipping USA market, such as high competition that increases advertising costs and saturates supply. The disadvantages we found while creating this drop shipping case study are extremely interrelated and warrant closer examination.

The Dropshipping USA market is extremely competitive

Being the largest economy on earth, the US has grown a lot of strong eCommerce giants people can visit to buy anything they want. Think of Amazon, Walmart, or now Jet.com.

Furthermore, large and developed markets have tons of smaller merchants. Shopify powered 240K stores in 2015 and 70% them were based in the US. While the giants and smaller merchants don’t necessarily sell only to the US only, it clearly reflects the level of competition.

The Dropship USA market is extremely demanding

Some of you might be surprised to hear this, but Americans are the most demanding consumers I’ve ever worked with. It’s definitely not a bad thing, but for a beginner it’s often difficult to keep up with the dropshipping USA market expectations of someone who has gotten used to an Amazon Prime level of service.

The Dropshipping USA market advertising costs are huge

If you cater to the dropship USA market, you’ll find that you spend more on ads. According to Salesforce Advertising Index (2015 Q1), the average cost per thousand impressions (CPM) in the US was $3.30. In France it was only $1.57. That’s more than 2x cheaper for the same result.

How many of those 1,000 impressions converts into customers depends on your product, store and other factors — but if these things are done right, you could enjoy double the profits just by switching to another market.

And think of even smaller developed markets like Norway or Finland. (Fun fact: In Norway, a bottle of lager beer costs $9.00, just like a T-Shirt in your store :)).


Dropshippers USA – What You Should Consider Before Picking Another Market

Below I list three things you should consider before testing another market.

Dropship USA – English Speaking Population

Assuming you don’t plan to invest your money and time translating your entire store, you should consider the English Speaking Population of your selected audience.

For instance, only 5% of Brazilians speak English, while in Denmark the English-speaking population is 86%.

The conventional eCommerce design makes it super intuitive to buy on a site no matter what the customer’s language. When I was running a store, I received many orders from non-English speakers around the world. However, it’s still something you should be aware of.

Handy Tip: there are many translation apps on Shopify Apps Marketplace that can help you get along with translations without manual work. Click here.

Dropshipping USA – Purchasing Power

From the Norwegian beer example above, it seems that Norwegians will mind spending $30 on a T-Shirt. But for someone in Mexico (a big and attractive market), $30 might be a price of a higher-end clothing item. Pay a lot of attention to this, as it might significantly reduce your conversion rate.

Dropship USA – Delivery Infrastructure

Some remote countries don’t have the postal infrastructure that’s taken for granted in Europe and the United States. A lot of suppliers will say you can’t track orders shipped to South Africa or Brazil; or that there’s an extra delivery fee (even though the delivery was supposed to be free).

But what’s worse is that in remote countries a lot of deliveries never reach the recipient. These developing markets tend to have extremely strict customs policy or bad postal services and the packages are “lost” somewhere en route.

Though you should be careful with developing markets, I strongly recommend testing them. You might just hit the jackpot you failed to find in your home country.


What Countries Should You Try (Drop shipping USA Case Study)

Our friend and early Oberlo store agreed to share their Google Analytics stats, in this drop shipping USA case study, to help you decide which countries are worth testing. We aren’t allowed to disclose the store name, but they are selling a broad range of women’s and men’s clothing and accessories.

A few key points before we get into details:

  • All of their products are dropshipped with Oberlo and comes from China.
  • The store offers standard delivery options: 14-day delivery to the USA (with ePacket) and 30+ days delivery to other countries (China Post).
  • The website is in English and has never been translated into other languages.
  • The website support is only in English as well.
  • The majority of traffic comes from Facebook Advertising.

Dropshippers USA – Top Countries by Conversion Rate

Quick note: conversion rate is the % of your site visitors who make a purchase. For the purpose of this drop shipping USA case study, you can calculate it by simply dividing the number of sales by the number of visitors.

The chart represents the statistics of more than 2,500,000 visitors and includes only the countries with 100+ orders.

The top 20 countries are:

dropshipping USA

The Top 20 Countries by eCommerce Conversion Rate

Even though the United States is the biggest traffic source of this site, its conversion rate is 1.5 times smaller than Australia. Scandinavia (Norway, Finland, Denmark) taking three of the top 10 slots suggests it is a must-try region.

Other countries you might want to try include Ireland, Canada and the United Kingdom. All have good conversion rates, are less competitive and easily scalable (your ads can quickly reach every person in Belgium, but your budget would be insane to reach everyone in the UK).

Dropship USA – Top Countries by Average Order Value

Just like cutting your advertising costs in half might double your profits, you can earn more by selling more to one customer.

In this specific example, of this drop shipping USA case study, the US is not even in the top 20 of countries by average order value with its average order value of US$39.29.

dropship USA

Top Countries by Average Order Value

8 out of 10 countries on the list are in Europe, and the majority of those are Scandinavian. While Argentina looks great, I’d recommend eliminating it from your testing list since the conversion rate is only 0.46%. Norway proves to be another top choice as it appears in second and fourth places on the charts.

These two simple graphs above, allows us to create a sample scenario:

Out of 100 visitors from Norway, you would receive 3.54 orders of $51.25 value. Or in other words 100 visitors = $181.43 in sales.

Out of 100 visitors from the US, you’d receive 3 orders of $39.29 value. And 100 visitors= $117.87.

The difference is $63.56. Now if you have 1,000 visitors per day, you’re leaving almost $650 on the table each and every day.


Drop shipping USA Case Study Conclusion

The goal of this drop shipping USA case study is to show you that the US may very well not be your go-to option. Thus, you must test other countries, even if you don’t speak their language or your site is only in English. This especially applies when your budget is smaller.

While the stats will definitely differ for your store, use the above graphs and insights to create your countries-to-test list. Test them and track the results. Then revise your marketing strategy.

As we’ve seen from the above examples, smaller and cheaper markets don’t always mean smaller profits (Tweet This).

What have you found most useful from this drop shipping USA case study?

  • Ricky Figueroa

    Great article!! Also, how do you promote all your products to all these countries?

  • Ricky Figueroa

    What is your best advice on that and have at least a chunk of those sales in your case study store.

  • Or Ray Sol

    Thank you for this great article! My biggest concern is about shipping tracking. As far as I know, regular China post tracking number is not trackable, which can lead to many customer complains and disputes. Is there any idea how to solve this problem?

  • Kerrie

    Hi Tomas – thanks for this. Having the examples of other countries we should test is really useful.

  • Matt

    Wow, this is probably one of the best gold nuggets I’ve come across in recent times in regards to marketing my online store. It’s all well and good to learn marketing how-to’s and tactics but all of that is hardly valuable in the wrong context (or country in this case!). Awesome article, thanks Tomas!

  • Thanks so much Matt!

  • Exactly, every country needs a test and you shouldn’t take these GA charts for granted. But only by testing, you can find your high-converting traffic source 🙂

  • Hi @orraysol:disqus, China Post is trackable. I don’t have an example on hand but we run another Shopify app called TrackR and a lot of people use China Post. I’ve heard that in some cases there’s no tracking information in the destination country, but I can’t confirm it.

  • As mentioned in the article, the main source of the traffic in GA charts was Facebook. Not sure about your experience, but if you’re just starting out, this article should help: https://www.oberlo.com/blog/the-beginners-guide-to-facebook-advertising/ 😉

  • Or Ray Sol

    Exactly, if the order is only trackable in China, then after it leaves China the customer have no info about his order and many times he starts to get worried which again leads to complains and disputes. This is the weak spot… And the reason why I have marketed to Canada before and then stopped.

  • Could you send me an example tracking code to tomas@oberlo.com? There are other delivery options available, and you might try China EMS which is trackable from door to door.

    You can reduce the # of complaints by clearly communicating the policies and follow-up’ing with your customers.

  • Or Ray Sol

    Just sent you an email. Thanks!

  • super insights

  • PeppyBox Retail

    Great insights. I was pondering over selling only in my native country India or in other countries too. This post really got me thinking. Thanks for posting.

  • Saajan Bakshi

    In your experience do people have any objections to waiting 30 days for their item to be recieved. Do you mention that under shipping that it will take that long if I ship to europe since there isn’t any epack

  • Yes, it’s important to set the right expectations. I’m sure some people leave your website because of that – but in my experience, it doesn’t mean there’s no business.

  • That is amazing. Thank you Tomas.

  • Sean

    Tomas – this is amazing info man. Thank you so much.

    Quick question – so when using oberlo, I should filter by products that ship via epacket and China post so I can sell to both US and international? Also- is the sales process for international any different as far as collecting sales tax and customs fees?

  • Thanks @disqus_JFzV4DMuAR:disqus! — most of the products can be shipped to the US or outside of the US. ePacket is just one of the available delivery options and it’s the fastest often free delivery option to the US. I haven’t had any problems or heard any reports of issues with sales taxes and customs fees. It’s a bit easier as a product never reaches your destination — but you should def consult with your accountant.

  • Great insight Tomas.

  • Thanks, @kymeshia_morris:disqus !

  • Sam

    Hello tomas,what do you think about Smart vacuum cleaner?

  • Sergio Adam

    Hi Thomas,

    What about the Netherlands, you think I should give it a try..(Everybody is speaking English,only population of 16.000.000 people) ?

  • Yes, why not? If it goes well, the only problem is the scalability – you might hit a wall when trying to find a new audience that could buy your product, but with dropshipping, you can try it and then move on to other countries.

  • tom jones

    Hi Tomas,
    Scandinavia is a gold mine…and they wont vine about 30 days delivery either…they are calm and less demanding clients compared to Usa.

  • Charlie Dee

    When someone orders, if there’s tracking available, does that tracking code automatically get sent to the customer/ can you set it up so that info get’s automatically sent?

  • Hi @disqus_IptVyjresA:disqus ,

    It’s not fully automated (we don’t have access to your AliExpress page), but you can do that in bulk, for multiple orders in one click.

    Just go to your AliExpress orders page and click Sync All Orders button (screenshot: http://take.ms/WfATx). Oberlo will then import all of your orders (on that page) tracking information to Shopify.

  • Mary Byker

    Hello Thomas, I’m thinking of starting an ecommerce site, I’m currently doing some intensive research.My main question involves tax issues. I live in Brazil but still pay tax in the UK. Could I set up a drop shipping business in the US without a US Tax ID or bank account how does that work? could you shed some light on this for me? Or as a UK tax payer would it be sensible to stick to the UK (Europe is now another issue with the Brexit vote)

  • Little Tot Trends

    Thanks for this article. I have a lot of product already on my site and I want to start shipping to new countries. I know that not every item ships to every location. Is there an easy way to check this before I begin experimenting?

  • Hi @marybyker:disqus, I’d love to help you, but I’ve never opened a company outside Lithuania (a country in Europe). I suggest you submit your question here: http://ask.oberlo.com/ I’m sure other Oberlo users will help you.

  • You should pick a product you want to advertise to other countries and then check its delivery options on AliExpress manually. From my experience, almost all sellers ship to all countries in Europe + AU, CA, US and most often without any additional charge.

  • Mary Byker

    Thanks for the reply

  • Gerardo Linares

    I would like to know when placing ads for FB in other countries as explained above. Do we just select the country; example “Denmark” and FB will take care of the rest? Or do we need to select the cities within Denmark. According to what you have heard from other successors. Thanks

  • @disqus_S5baWB2ul0:disqus, in most cases you should select countries. Individual cities are too small for targeting + there are probably no significant differences between cities in small countries.

  • abby

    Once my clients order something on my site, I have manually go into AliExpress to make orders which is fine. But how do they handle shipping? For example, my client ordered 6 items from my sites, and I go ahead to AliExpress to order them from 6 different suppliers which said that they will be ship out in 6 different package? – Assume my customer ordered all of them from my site, so they will only expect one package and expect to receive them all at once?

  • You as a store owner set the expectations. If you write on your shipping information page that some of the orders are delivered in separate packages to reduce shipping times, everyone will understand you.

  • Isabelle Mader

    Hi Tomas, Do we need to get a municipal, provincial (state) ecommerce license or inc papers before setting up a dropship page on Shopify or other? I am thinking about the taxes that would need to be charged if selling in or out of your own state/province. And what kind of a markup do you recommend for Ali Express products? Lastly, do you not recommend VISA / MC payments? I am guessing that not all clients would feel comfortable using Paypall. Thank you!

  • Isabelle Mader

    If we order products from Ali express, wont they take a month to arrive? And wont the package have to be cleared by customs? And wont the client have to pay customs fees at the post office to receive their package?

  • No. In fact, if you’re using ePacket it will takes around two weeks to get your order to the US. And there’re rarely any customs fees as the packages are often low value or/and marked as gifts.

  • Hey Isabelle,

    It’s enough to have the EIN, but I’d recommend starting your store first. Given the fact that 50% of eCommerce store owners (beginners) never receive a sale, you might not need one.

    I don’t want to sound demotivating, but I would start doing it right now and care about legal things later when I know I will be doing this seriously.

    Oberlo users on average just double the AliExpress price – and from my experience most of the customers are OK with using PayPal.

  • Good article thomas! One thing to note also is the payments systems in these countries. Some countries are used to cash on delivery and users don’t use their credit cards to shop online. This is especially true in the smaller countries.

  • Thanks, George! Yes, I’ve read that in Romania and other Balkan countries 70% of people prefer COD instead of CC or PayPal. That’s def something people should consider.

  • Will

    Realistically how much should one expect to spend in Facebook Ads to get sufficient traffic to generate healthy sales?

  • Hey Will,

    Looks at it this way:

    a click costs around $0.25 and the average conversion rate is around 2% — that means out of 100 visitors to your store, 2 persons will place an order and you need to attract 50 visitors to your store to receive an order.

    50 visitors x $0.25 cost per click = $12,5 // Which means that on average you need to spend $12,5 to get one order.

    That might sound a lot, but if your markup is $20, you earn $7,50 with every order you receive and you can spend $100 or $1,000 a day, it doesn’t actually matter – you just keep earning.

    Of course, it’s not that easy – it takes time to find an audience that clicks on your ads and converts.

  • WebGeek

    It looks so easy to start earning money using oberlo and dropshopping that after reading your articles you automatically want go buy your service and start counting money. But don’t be stupid, most of those articles is just for seo purposes and ads to atract more users to oberlo.

    As the oberlo always say facebook is a fantastic and cheep place to advertise, just go create some good ads and you looking how people start buying. I agree, its very good place with lost of options, but its extremely expensive, expect in India, Africa and ect.

    So according to that, 80 percent of your statistics is just from wonderland.

    For example: “Out of 100 visitors from Norway, you would receive 3.54 orders of $51.25 value. Or in other words 100 visitors = $181.43 in sales.”

    I go and checked how much one click on average costs in Norvegia on facebook ads. And the price for one click is from 2.5 doll to 5 doll. So lets take 3 doll and count how much will cost 100 Norvegian visitors for you: 3×100= 300 doll. And now count profits:

    181.43 – 300 = – 118,57 doll.

    So you see that it’s not so easy as those orbelo team articles might say to you. I’m not saying Oberlo is not interesting thing, actually its done pretty nice, to make some real money from it is not so easy as they might say. The main problem is marketing. 5 years ago facebook was excelent for this, because it you could get rates for CPC 0,03-0,06 doll now the rates are almost the same as in adwords and thanks to super big companys with lots of money on the plate. So please stop writing in your articles that facebook is amazing and cheep place to advetise, except if your article about India, Africa or Madagascar.

  • WebGeek

    Really? 0.25 for CPC? When the last time you checked ads prices on facebook? Talking bulshit

  • Great write up. Really got me considering other markets. Deciding factor for me though to stick with US is Epacket. It really is a must if using ALiexpress cause shipping times are too long without it. Epacket to anywhere outside US is a lot more expensive. To US is generally around $2 while Epacket everywhere else is like $6 so that would def eat into your profits.

  • It depends on the targeted country, placement, offer, target audience and many other factors. The link on desktop newsfeed might cost twice as much than on mobile carousel or video ad. I agree that $0.25 in the US for a regular product direct response ad is a bit too optimistic though.

  • WebGeek

    Do you read what I write? The cheapest CPC for your mentioned Norway is 2doll, and you can try different target options the price will not go bellow 2 doll. The only way to get CPC in Norway up to 0.50 doll is to let ads only on Instagram, but its useless.

  • It’s not all black and white. You can review the latest CPC/CPM benchmarks here: https://goo.gl/T9QR14.

  • Dropshipping is just like any other business – it takes a lot of time and efforts. And as for the marketing, here’s my most frequently used email saved reply:

    “Honestly, I suggest you don’t rush into opening an online store.

    Take some time to plan how you’ll attract customers to your store and learn how Facebook or Instagram Ads work.

    Marketing is the tricky part. Launching a store is the easy part.”

    And it’s true. Marketing is the tricky part and it takes a lot of time to find a working channel and a target audience or a combination of channel, target audience and a product.

    These articles are based on the information shared by our customers. I can guarantee you that these stats are not fake, but it doesn’t mean that if you do the same you’ll have the same results – it’s just someone’s experience to consider.

  • WebGeek

    Again, you give me another article with statistics, but in real in most cases it doesnt work. I work with google ads for about 6 years and I said I tried to open ads for Norway in many different targeting options and there is no such low numbers as you say… its starts 1, 2 doll CPC… Have you ever tried to create a campaign on google ads? If you want to prove I m wrong, go and create campaign in Norway and make a screenshot of suggested bids internal for clicks to webpage. The interval will be between 2-6 doll. People like you I call theoretics but not practitioner, because you rely on articles instead of going and checking by your self.

  • WebGeek

    By the way, did you look at those statistics you shared? Its clearly says the regions on what the average prices are calculated:

    “To ensure statistical signi cance, country spend, clicks, and impression data is grouped into geographic regions—1) The Americas; 2) Europe, Middle East, and Africa (EMEA); and 3) Asia-Paci c (APAC). ”

    They calculating the whole continent instead of country. For example, 1) The Americas (its included North and South Americas) 2) Europe, Middle East, and Africa…

    Now you understand why they say the global average CPC for The Americas is 0,57 doll…? so you really believe the in the USA you will be able to advertise so cheap?LOL, the minimum CPC will be 4 doll. But they calculate Global with South America and in South America you can advertise cheap, so this factor make the average so small… The same is with Europe. They do not calculate Europe only, they mix with Middle East and Africa where rates is very small, so the average is small.

    Wanna play smart? Give me the statistics where is said that in your mentioned Norway the average CPC is at least 0,57 doll. Can you do this?

  • Here are the stats I have on my Facebook account: http://take.ms/9IKyS They are almost a year old, and the CPC for Norway is a little bit higher, but the cost per purchase is less than $12,5 (because more qualified leads have better conversion rates).

    I’m not trying to prove you’re wrong, I’m just saying that these stats vary a lot between different target audiences, product categories, placements, etc.

  • WebGeek

    http://imgur.com/v9CvPTt

    Here is basic configuration, of course its not optimized and the minimum bid on CPC is 3.5 doll, it means your ad wont show up if you bid less and it might show up only in midnight when other bidders dont want their ad to show up and ect. Yes its possible to optimize your CPC to 1,5 2 doll if you will choose your targeting options very narrow but still there is no guarantee if your product is not unique in that market.

    And another thing, your example are with very big advertisement numbers, so when you spending so much on you campaign its possible to gain lower CPC in long term, but usually people who start their business their budget is not more that 500 doll per month on ads.

  • I’m happy we’re heading towards an agreement.

    You’re right – here are the results from our recent Oberlo campaign. CPC is more than 4 EUR: http://take.ms/NCicm It’s insane!

    But I believe you just can’t say it’s always $4 or $1 or $0.20. You should be always looking for the best performing campaigns, e.g. http://take.ms/k0b4L

  • WebGeek

    Yes, you right, need to find best one performing but you will find that one only when you spent lots of money. You can expect to find that one if you going to spend 1k or 2, so thats a very big problem for the starters with tight budgets… Even if you are lucky and found that targeting options with best CPC there is no guarantee that tomorrow you will get the same as might be you there lucky to find that short period time gap when other bidders was just getting ready their new campaigns and when they start with more money than you have, the prices goes up very fast…

  • grigore guzun

    Tomas Please Please advice, what course should i buy as a Intermediate ?

  • I’d love to help you, but I’m not following any courses right now. And I was always of the opinion, that there’s a lot of free information around the web and you don’t have to pay for it 🙂

  • Leo

    @tomasslimas:disqus Hi Tomas, thanks for the insights. Any tips on which ad format and channel (Instagram or facebook) was working for you?

  • I always recommend starting with Facebook Desktop Newsfeed ads, and try other placements only as a test.

  • Devin Beverage

    How much (if any) consideration should be given to the fact that these ad conversion stats are based on a clothing store?
    (maybe ads for clothing may have a lower conversion rate in some places)

  • Hi Devin,

    I’m sure that these conversion rates might differ for different products, different websites, and different audiences. I would just use them as a reference point and an argument to try out new markets outside the US.

  • Devin Beverage

    That makes sense – don’t overanalyze it, just use it as a reference point. I really appreciate this content, very helpful. I’ve been doing a lot of reading all over for my preliminary research on markets and products, and overall Oberlo gives real value. Thank you.

  • Thanks so much!

  • DSM Tool

    Finding the top products to listing the products on Ebay from different websites.
    dropshipping marketing

  • Lefties Guitars

    Wow Tomas, I need to rethink my whole approach to e-commerce.
    Thanks for this article.

  • Bespi

    Hi Tomas! Would you advise then we ship the purchased product to the US FIRST and then out to your international customers or leverage the international shipping options provided by your supplier and ship directly to your customer? Thanks in advance!

  • DSM Tool

    “The dropshipping business outside of USA, specially in the developing countries is very lowely practised due to unreliable and untrustworthy nature of the retailers. The dropshipping marketing in these countries is also very difficult and the finalized profit is low.
    dropshipping marketing

  • Amr Abd El Rhman

    it is amazing info Tomas ,but how i can test and detect countries for traffic and conversion and purchase per customer??only by ads and trials, or there is any analytic tools i can forecast with before launching a campaign in order to save money and time,
    Thanks Again

  • Demsy

    this is such amazing info. answering my question right away since i’m thinking to target non-US customers