- Forget the drop shipping gurus.
Here is how someone who actually works at Shopify
would start a drop shipping store in today's climate
and this is the only way you can drop ship successfully.
Drop shipping is such a popular business model for beginners
because it doesn't require you to hold any inventory
or pay for products upfront.
With so little investment needed,
the ability to work from anywhere
and the potential to make hundreds of thousands of dollars
per year it's absolutely still worth getting into
if you know how to do it right.
Want in on the action?
Here's everything you need to know
about getting started with drop shipping today.
Like any type of business, there are no real shortcuts.
I mean, you might have come across a video
promising riches overnight
and that's why I made this video
because there is a lot of misinformation out there.
Building your drop shipping empire
is gonna take a strong plan and even stronger execution
and the best way to get started is through research
product research, competitor research and supplier research.
With product research, your determining what to sell
which is going to determine the type of business
that you want to create.
As a rule of thumb,
try to choose hobby and lifestyle products
that you can sell between 20 and $200
since this is typically the impulse buying range.
If you're looking to add rocket fuel to your business
you should conduct research on current trends.
Look out for products
that are most likely to sell right now.
This research can be done in a number of ways.
I mean, you can check out
Amazon's new and interesting finds,
eBay's trending on eBay,
and Alibaba's first look at next season's products
to get some initial product ideas.
You can also use free tools
like Google Trends, search interface
or free browser plug-in called Keywords Everywhere
and we use keyword tools
to see how many people are searching
for that particular item.
Depending on what country you are selling in
I suggest you focus on the local search volume.
The more people searching for your product
of course the better.
Once you've narrowed it down to three potential products
hop on over to Google Trends
and see if the interest in each product
is increasing over time.
You wanna make sure it is not a seasonal product
because if that's the case,
sales simply won't be consistent.
Next, use a drop shipping management tool
that integrates seamlessly with your Shopify backend
one like DSers.
Type in your product idea,
click sort by and choose orders and you will see
the number of times in total any product was ordered
which will of course give you a very strong indication
of how many you could sell and how popular each product is.
Inside the DSer interface is an integrated tool
called Supplier Optimizer
which automatically searches for similar products
and provides you a complete list with valuable data.
I mean, at a glance you can view cost, reviews,
and shipping times so you can choose the best supplier
for any given product that you want to sell.
By matching the trends you identify
with items that have high review ratings, sales volumes
and good suppliers, you are in a really strong place.
With drop shipping, you can create a single product store
more focused on turning a quick buck
by simply choosing something that is very trendy.
But if you're trying to build a long-term business
that you want to grow for years and years
you'll definitely want to dedicate the time
and energy to choosing a business niche.
Basically, you wanna carve out a group of customers
in the market that are interested in the same things
and who are likely to buy more than one product
from your store.
For example, you may be a dog lover
and wanna focus on dog toys
and clothes and carry many products
but if you want to increase the likelihood of success
in the ever expanding landscape of drop ship stores
you will want to niche down even further.
For example, you can niche down into formal wear
for small dogs.
Designing your store and all of your marketing materials
to focus solely on this segment
is gonna help you build a community
and become the place to go for small dog owners
who want their dogs to be the most stylish on the block.
The act of nicheing down may feel counterintuitive at first
but as the saying goes, when you try to please everyone
you end up pleasing no one.
Next, it's time to do competitor research.
This is gonna tell you how saturated the space is,
what your margins can be
and also spying on your competitors' customer reviews
will show you what your competitors are doing well
that you can emulate
and where your opportunity is to create a better offering.
The interesting thing about drop shipping
is that unlike many traditional businesses
the more competitors you have, the better it is
because that means you have more validation
that your space is worth getting into.
Competitor research can be done
by running a very general Google search of your product.
That first page of results
will be some of the most successful players
in the space you are looking to penetrate
and you'll want to make a note,
dig through their pricing reviews,
and even add things to cart and pretend to check out
all so you can see what they're charging for shipping,
how long their shipping takes and all that jazz.
If some of these top results
are from traditional inventory carrying businesses
like Walmart you'll learn a bunch more
by seeing what they are offering at aggressive discounts.
Often an indicator that something is not popular
and they're just trying to offload at all
so you know what not to order and offer.
Continuing on with the research,
seeing which items have the most reviews
whether they're good or bad reviews
will show you which items are most attractive
at first sight
and you can study the product photography they've chosen
and the product names that they've written.
All clues to help you discover why certain items sell better
than others.
And speaking of reviews, these are super valuable
to learn about product quality complaints
or sizing challenges
but also what elements make people love a certain product.
Another free way to do competitor research
is to look through social media
and find the competitor accounts
with the most followers and engagement.
This will give you incredible insight
into the types of posts and the overall style
you may want to emulate or be the opposite of.
Seeing what types of copywriting they use
in their bios or captions will all give you valuable nuggets
of information to leverage when you are ready to launch.
The third freeway to get insight into your competitors
is by signing up for their email newsletters.
This is valuable not just at the beginning
but also for ongoing competitor analysis
so you can see when they have sales,
how aggressive their discounts are and can time
and structure your own campaigns to mirror
or beat out the competition.
If you have some money saved up
or have already started earning a bit of cash
investing in paid competitor analysis tools
is a fantastic idea if you have the time
to actually use them.
I mean tools like Alexa and Similarweb
are incredible to have an at a glance analysis in real time
to always monitor the space you are selling in.
But again, for this preliminary research phase
the free tools, your focus
and a way to jot down notes are all that you need.
The last phase of research lies in supplier vetting,
after all it doesn't matter how good your website,
marketing and pricing is, if your supplier is unreliable.
Late deliveries and poor product quality
will always result in furious customers.
The drop shipping management app, DSers,
we touched on briefly before
allows you to see the supplier company for each product.
When you click on that
you are taken to that supplier's dedicated page
on AliExpress where you can see the reviews
that other sellers have given them
how long they've been in business and get a strong sense
for how reliable they actually are.
Supplier research is actually the quickest and easiest stage
of research since you'd only look
once you've determined which product
you potentially want to sell.
If the supplier does not have great ratings
that supplier optimization tool built into Dsers
will spit out a list of other suppliers that offer the same
or very similar products to the one you are planning
on offering to your customers.
The last thing to pay attention to
even if a supplier has fantastic reviews and ratings
is to ensure the products you plan on selling
can take advantage of ePacket shipping
if your product is from China.
ePacket is an insanely cheap shipping option from China
to countries like the USA, Canada and the UK.
It leverages sheer volume
to enable tremendously affordable shipping
at speeds as fast as two weeks
instead of waiting months for a product to arrive by boat
across the ocean.
In short though, after all of your research is done
your goal is have a product or products
that have both high product ratings
to signify that customers are happy when they receive them,
high supplier ratings from other sellers
indicating reliability and offer ePacket shipping
to enable the perfect balance of fast and cheap shipping.
And by the way,
if you want to learn even more about drop shipping,
I'm gonna link the entire learn with Shopify drop shipping
playlist right up here
where you can pick and choose what to learn next.
Since with drop shipping
you are not designing a new or innovative product.
When it comes down to it,
the only way to succeed in drop shipping
is to be an incredible marketer.
There are three types of sales and marketing tactics
that I'll touch on here for drop shippers.
And we'll go from the lowest cost
to the highest cost options.
First up is sales hacking through local buy
and sell platforms like Facebook Marketplace.
I mean, let's say you wanna offer
this very handsome dog bow tie or neck tie with a collar.
Your cost is about three US dollars including shipping.
You can first order say 10 of them
and post one for sale on your local Facebook marketplace
for $25, but list it
in your drop shipping businesses website for $15.
When someone on Facebook marketplace reaches out to you
through Facebook Messenger
because you know they want their dog to be fancy
you can reply with something like this,
"Hey, you can pick it up today or tomorrow for 25
but if you're able to wait two to three weeks
you can actually get it for just $15 from this website."
Totally up to you
but thought I'd share this much cheaper option.
This strategy is just one example of sales hacking
and with this one example for 10 units on hand
it costs you less than 30 US dollars
to carry a tiny inventory, lets you get free eyeballs
through local buy and sell platforms
and either drive traffic to your website
or sell for much higher margins if they're in a rush
and choose to pick it up from you.
Either way, you get eyeballs on what you are trying to sell.
The second tactic
that's still super affordable in terms of money
is to me an absolute necessity,
and that's content marketing.
Whether you take product photos, lifestyle photos,
create short form video clips or long form tutorials,
creating content for social media, Google and YouTube
is a great way to get free eyeballs
and help potential customers experience
what it would feel like to have your product in hand.
Within the content.
You can add call to actions that send people
to a buy now page to increase the likelihood of sales.
Find out where your target customers hang out online
and find out which types of content
they engage with the most.
Create that kind of content featuring your product in use
and then link your product page for in-app shopping
with Shopify's many social integrations.
content marketing is a huge differentiator
between drop shippers who just list products
and hope they move and drop shippers
who put themselves in their target customers shoes.
Imagine what they need to make a purchasing decision
and create the content that speaks to their needs
to help them add to cart and check out with confidence.
The third tactic is paid advertising.
Now a lot of people think this is expensive
but when done right it doesn't have to be.
With content marketing needing time,
to both create and time to grow through consistent uploads
paid ads allow you to reach customers quickly
which is why you'd be hard pressed
to find a six or seven figure annual drop shipping business
that started in the past five years
that does not leverage paid ads.
The good news is with a niche product
and therefore hyper-targeted audience
you can narrow down your ad spend very effectively.
The whole point of ads is to make money
so for every dollar you spend
you should be making two.
And with social ads you can get effective results
with as low as $50 to test and tweak
until you find a formula that works.
The process with all paid ads
is to first create amazing copy and ad creative.
I mean all the money in the world won't solve
unengaging content.
The only investment this part requires is brain power.
Next, understand your costs of doing business
as well as your margins on your products
which will inform you of your minimum return on ad spend.
Next, you create your ad campaigns
and set your budgets and financial targets
in order to hit that minimum return on ad spend.
So as long as the sales you generate through ads
outpace your ad spends, you are in the green zone.
The ongoing job after that is to test and optimize
your targeting and your ad creative
to widen that gap so that each advertising dollar
returns more and more into your bank account.
Find the formula, tweak the formula, fund the formula
and continue to optimize the formula to earn more
and more money.
Understanding ads of all types
can be an hour long video on their own
so I welcome you to check out
our in-depth tutorials on Facebook and Instagram ads
in this playlist that'll link right up here.
With marketing and sales tactics
that'll differentiate you from the crowd
it is now time to move on
to analytics informed improvements.
As you start your business and reach your first 50 sales
you should really start to be able to study analytics.
Analytics in your Shopify backend
will show you in clear numbers,
valuable insights including raw sales data, shopper behavior
and financials like your profit margins.
When it comes to sales analytics
understanding your conversion rates
between product page visits and sales
will help you determine what works and what doesn't.
As just one example
maybe you notice two similar products you offer
are selling at wildly different volumes.
Maybe it's the product description
perhaps it's the product photos, maybe it's the pricing.
Isolate each variable and testings out to see
if the numbers improve.
Customer behavior analytics
are worth paying attention to as well.
Pay attention to where your customers are coming from
so you can optimize your marketing and landing pages.
When it comes to financial analytics
looking at your profit margins on all of your SKUs
can inform you on what products to feature more prominently
whether in social media posts, paid ads,
or heck even in the featured product section
of your website.
Learning to read interpret an action
against your analytics is an ongoing task
and the good news is the more you learn the better you get
and the better you get the more sales you make
and the more sales you make the more you can offer
and the more you can offer the more you learn
and the positive feedback loop continues
as you grow and scale to higher and higher profits.
Extracting, interpreting, and actioning analytics
is yet another gigantic differentiator
between those who just start a business
and those who actually continue to do business.
Lastly, especially if you're looking to build a brand
that stands, the test of time is customer service.
There are many drop shippers who have done damage
to the industry by accepting failures
to their customers as just part of reality.
They rather collect money and escape accountability
when things go wrong.
Sure, they may turn a quick buck
but as more and more negative reviews pile up
their pool of customers eventually dries up.
The top drop shippers, they do everything they can
to ensure their customer's issues
are resolved beyond expectations
and with the potential gigantic margins available
through job shipping,
there's no reason why you can't go above and beyond.
For example, let's say your product arrives damage
to your customer as your volumes increase
and your sales go up.
Having the funds to enable you to both refund your customer
and resend them their product on your dime
should be a drop in the bucket,
but will lead to a level of loyalty and happiness
most businesses dream of.
Of course, this is assuming this type of thing
does not happen frequently, and if it does
this goes all the way back to the beginning of this video
where we talked about vetting and choosing good
and reliable suppliers.
But customer service means putting yourself
in your customer's shoes at all times
especially when dealing with complaints.
I mean, if you spent your hard-earned money
and did not get what you paid for
what would you want the company to do
for you in order to make it right?
Drop shipping is absolutely still viable today.
With a combination of deliberate research,
effective marketing, leveraging analytics
and prioritizing customer service
maximizes your chances of not just making drop shipping
a fulfilling side hustle but even becoming a business
that helps you achieve financial freedom
and the ability to make money from anywhere.
While starting an online store seems daunting at first
the hardest part is actually just starting
and Shopify is the most robust platform for you to create
your drop shipping business.
With seamless integrations
to drop shipping product suppliers,
drop shipping management apps
and a seamless store management backend.
If you are ready to take the plunge
I welcome you to claim your free trial to Shopify.
You can source products, list them and start making money
all while you're still in your free trial.
You can claim your trial by clicking the link right up here
or in the link down in the description below.
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Thanks for kicking in with me
and I'll catch you in the next video.