Can dropshipping strategies really scale into sustainable success?

Fast fashion brand SHEIN proved that the dropshipping model is more than a gimmick. In fact, these strategies can work for almost any DTC brand – and at a recent Affiliate World event, Dayu Yang explained how.

1. Launch Products with Lower Risk 🚀

Unlike other retailers, SHEIN started out by shipping everywhere from one warehouse in China. Traditional retail, in contrast, requires extensive supply chain networks and anticipating inventory needs months in advance because of long freight lead times.

The major benefit of SHEIN’s choice to ship from one location is that you can use quick procurement to test new designs and launch products in tiny quantities with minimal risk. This flexibility, in conjunction with reduced lead time, makes it easy to ramp production up when you discover winners – especially in light of the fact that shipping from China to major consumer locales like the US and EU is surprisingly fast today.

2. Scale Faster than Traditional Retailers with Minimal Inventory 📦

When you know how to identify and put more resources into your winning products, it’s easier to scale more quickly because you aren’t chained to existing inventory like traditional retailers.

If you make DTC products, for example, you can create “test batches” that ship directly from China to your customers to see what products perform well. You’ll need a reliable manufacturer in China to make this work, but when you identify winners, you can ramp up production to meet demand in days instead of trying to move existing stock over weeks and months.

This method of stock planning based on customer demand also takes away your need to rely on forecasts and predictions to manage inventory. Efficient DTC shipping can get orders to customers in as little as a week, so you can pivot according to market trends and customer demand.

3. Enter Top Global Markets All at Once 🌏

Shipping directly from China puts SHEIN in all of the top markets at once in a cost-efficient way. Instead of investing in local infrastructure, securing myriad shipping routes, and waiting on traditional delivery methods, the fashion brand was able to reach buyers around the world with efficient fulfillment from one location.

One of Dayu’s beauty brand clients leveraged this lesson to expand their reach by fulfilling directly from China. Their sales grew by 40% because they could fulfill international orders for 50% cheaper and weeks faster than their third-party logistics provider in the US.

4. While Being Transparent 🪞

SHEIN turned minimal inventory into positive through transparency.

Not only do they have less cash tied up in inventory, but customers also know that items may not be available for long because they know that the brand’s production runs are limited. This creates a sense of urgency or fear of missing out because the products they want may run out.

The buyer enthusiasm that limited-time items creates also pays off in higher repurchase rates, increasing customer LTV as buyers purchase new products to keep up with trends.

5. How You Can Do Better 👍

Even though SHEIN started by dropshipping new products, they doubled down on scale and expanded beyond dropshipping to using local warehouses – but only for top-performing SKUs.

This hybrid fulfillment strategy strikes a perfect balance for them, but the fast fashion niche is admittedly not as focused on durability or high quality as other industries are.

That said, if your brand is focused on quality and innovation, you can still ship from China if you partner with the right supplier. And today, you can even sell on Amazon through Amazon-approved shipping lines from China.

The lessons from SHEIN – agile production, lower risk, rapid scaling, and transparency – can also work for affiliates and DTC sellers who are ready to pursue a competitive edge.