Aliexpress Dropshipping Sucks!

[Sanj Modha]

Why the ad won't make you money, eTox:

Let's say that you have X product that has a $10 margin. The assumption is that the cherry picked passionate audience will love the product thus you are assuming that a) the product is right b) the audience is right.

Plan of attack: Launch a PPE ad @ $10/day for 3-4 days. During this time frame, you are going to reach approximately 4K people and spend $40 on ads. Assuming that your super targetted passionate audience size is 300K then you've reached 1.3% of the audience where the total ad spend would be $3K to burn through that audience size.

Now the outcomes:

1) 0 Sales. Swallow the cost and move on!

If the ad did not make you any money after 4 days of spending $40 on ad spend, then it won't make you profit going forward because you have sampled a decent sized audience of 4K people. Assuming that you will get 1 sale the next day, that would be $50 per 1 sale. That would assume that the audience will bring back 60 more sales giving you $600 on a $3,000 ad spend. The likelihood of it giving you money later on assuming you product is right and your audience is right is good, but not good enough to make any profit.

Why could that happen?

• It could be because the product that you've selected was simply sold to that audience before so many times that people just don't want it or don't care about it.
• It could be that the product is awesome, it's cool, but that's basically it. People like it, but it's not a life changer. Maybe they think it's a cool idea, but that only it.
• The assumption is that the targeting and product selection was right.

2) 1-3 Sales. Move on...

Even if it made you 1-3 sales, say 3 then you've made back $30/$40 ad spend. This is still not good enough. Even if you spend more money over the course of next 5 days and figure out that it's selling, you most likely will see that it's breaking you even or at best giving you a few dollars in profit. Now think of the headache you will get for yourself for $1-$3 dollars per sale. You will have to handle hundreds of customers to get only few hundred dollars. Swallow the cost and move on!

3) 4 Sales. Think about.

When your ad has brought you back as much as it has taken, then it's time to wait for a few more days and see how it's going. If you believe in the product and know that the engagement is high, people clearly love it and visit the landing page, it's just you need the conversion to be higher then it's time to scale.

4) 5+ Sales. Scale!

There is no need to explain this.

Therefore, don't be a pussy and spend money to make money. You have to lose in order to gain. You can never absolutely know whether one product will sell or not that's why WE TEST! Spend money to get data and if it's telling you to ignore the product and move on, then listen to data!

@IGP @Sanj Modha What are your thought's on this? Am I right, wrong?

That's pretty much it in a nutshell. Here's what I do:

1) Look for products with at least 60% gross margin. This gives you plenty of 'wiggle' room when running ads.

2) My 'magic number' is $5/sale. That's the sweet spot so before you run anything - ask yourself 'how much am I willing to pay to acquire a customer?' If you have plenty of margin then you can increase the max CPA and still make a healthy profit.

3) If I spend $1 on ads I should make back AT LEAST $3 in revenue - that's my golden formula but it's harder during Q4 when competition for ad space is brutal. So I'm happy with 2:1 at the moment. If you have healthy profit margins you'll do just fine at 2:1.

4) Profit pays my bills - focus on the bottom line not the top line.

5) Scale the winners and dump the losers. Rinse/repeat.

 

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[IGP]

What's your take on copy?

I have not concluded yet, but from my understanding its this: people don't like to be sold where they hang out. So getting people excited and engaged about a product they like on facebook and then driving them to your website where you do the actual selling?

You need good copy on the ad AND on the LP...

Good copy will sell someone without them knowing they are being sold!

 

[Sanj Modha]

I don't mind selling to people at all. In fact I love it. Sales cures all illnesses!

Why do people buy anything? 1) It's an extension of themselves. 2) It makes them feel special or invokes an emotion 3) they NEED it.

How you sell will change with technology but selling principles and the psychology is always the same.

 

[eTox]

You need good copy on the ad AND on the LP...

Good copy will sell someone without them knowing they are being sold!

Could you please help me out with this @IGP and @Sanj Modha? I would love to see an example of an ad copy from a pro with a product of your choice I am grateful that you guys share awesome insights with us, and I do believe that an example from both of you will not hurt us, but rather make us stronger!

Looking forward to a sample from both of you! :embarrased:

I hope I am not too cocky or asking too much!

 

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[Sanj Modha]

The FB ad is about getting the CLICK. That's all you're doing. You do this by:

1) using a nice, relevant banner image.
2) asking the right questions: 'Do you suffer from acne? Would you like a safe, 7 day solution?'
3) CLEAR call to actions: 'Click here now! Go here' etc
4) targeting the right audience

The landing/sales/product page is where you CONVERT the prospect into a customer. You do this by:

1) providing testimonials, reviews etc
2) using a YouTube video explaining the product
3) trust symbols like PayPal Verified, SSL etc
4) delivery times
5) accurate sizing information if you're selling clothing

Put yourself in the customer's shoes. What do you need to know before making a purchase? It's exactly the same train of thought.

 

[eTox]

Progress update:

What I've learned after spending $600 on ads.

Some stats:

• $600 spent on ads. 25 Campaigns, 43 adsets.
• 20 products launched. 3 unique products purchased. 18 failed. 1 at break even. 1 is promising.
• 13 orders. $455 in revenue. $255 in gross profit.

eTox, never give up. It's when the times get hard, you start working 10x harder!
"If I feel that I am tired and can't do anymore. This is the time to take 10x more action and kill it!"

If I could share what I've learned with you guys here, over the past 23 days it would be to follow the breadcrumbs. Others are here to help you and it's not that they aren't clear enough, it's that you won't shut up and listen.

The update:

After spending a decent amount of time studying from the available information ONLINE (Yes online, yes outside the forum, so get the F*ck out of here and realize that the forum won't teach you! There are shit loads of gold on the internet. Determine what you want and need to learn to move on to the next stage and go F*cking do it...) I was able to come up with a pretty good blueprint for validating whether a product is a potential winner or not.

The question is: is my assumption with regards to identifying potential winners legitimate? To verify this, I have to launch and learn. I will only claim that yes, perhaps it is, after I have identified winners with it and have made sales I will share my findings.

The next important thing that happened is that one should not be afraid to learn. It's not that I am afraid to learn, it's that I am afraid to spend money. But to make money you have to spend money. Facebook is all about data. YOU PAY FOR DATA. Then you act on that data. To learn you must spend.

Achievements:

• Created a blueprint for identifying winning campaigns and which ones to kill immediately.
• Facebook is all about data! Get rid of emotions and act on data. It's what the market says that matters, not what your emotions with regards to some product tell you.
• Had a realization that to learn, you must spend. Don't be afraid to burn that cash. You'll learn much more. Be patient. It takes time.

I have learned much more, but first I would like to solidify my knowledge by following with massive execution. I will post back with results and achievements. I just don't want to sound that I know everything. I really don't. Let me show you, instead of telling.

 

[eTox]

PS: can't believe I've wrote out my first formula how to find products for niches. Let me test it out and I'll get back

 

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[DillanE]

Progress 0(Yes online, yes outside the forum, so get the F*ck out of here and realize that the forum won't teach you!

Yikes, i was really enjoying reading through this post. Humble yourself.

 

[eTox]

Yikes, i was really enjoying reading through this post. Humble yourself.

Thank you for calling me out on this. Sometimes I get so angry about the truth that I just can't hold back. But I do believe and realize that humble is the way to be.

 

[eTox]

What I've learned after spending $1,000 on Facebook ads

I guess it's time for an update. The more you take action, the more you results you get. However, the fewer minutes you spend on the forum :S

Some stats:

• Total Sales: $1,022
• Facebook Ad Costs: $1,030
• COGS: $625
• Products Launched to Date: 54
• Number of Orders: 34
• NET LOSS: $633

I have learned a few things now that I have launched few products. And I feel like I need to spend $3K more just to practice and internalize the results I've got. Well, I believe I can handle some more debt. No one canceled dry noodles and canned beans.

I have realized that it's not about the PROFIT that you make when starting out, it's more about the MONEY YOU SHOULD SPEND. The number one key to failure from my experience is being afraid of spending money to make money. I believe that Facebook is all about testings and validating assumptions. You never know what will work, you need to test it. But the crucial part is to know when to kill those ads.

Killing the ads.

I believe that my greatest mistake and the greatest thing ever happening to me up to this point in ads is failing to kill those campaigns that aren't bringing money. It's a play on hope. You hope that just few more dollars will bring a sale, though it never comes. Knowing when to kill is crucial. I believe that if I had killed the losers at the right time I could have broken even, or have been in little debt. Though I am happy that this happened to me. I have learned a lot.

 

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[RoadTrip]

Nice update. Congrats on the progress. About killing the ads: from what I've read in a couple of fb groups is that even 5 dollars should tell you whether to kill the ad or continue, because facebook optimizes immediately. I would say 5-15 dollars would be enough per targeting. Are you isolating your targeting for one audience per ad set only?


Verzonden vanaf mijn iPhone met Tapatalk

 

[IGP]

What I've learned after spending $1,000 on Facebook ads

I guess it's time for an update. The more you take action, the more you results you get. However, the fewer minutes you spend on the forum :S

Some stats:

• Total Sales: $1,022
• Facebook Ad Costs: $1,030
• COGS: $625
• Products Launched to Date: 54
• Number of Orders: 34
• NET LOSS: $633

I have learned a few things now that I have launched few products. And I feel like I need to spend $3K more just to practice and internalize the results I've got. Well, I believe I can handle some more debt. No one canceled dry noodles and canned beans.

I have realized that it's not about the PROFIT that you make when starting out, it's more about the MONEY YOU SHOULD SPEND. The number one key to failure from my experience is being afraid of spending money to make money. I believe that Facebook is all about testings and validating assumptions. You never know what will work, you need to test it. But the crucial part is to know when to kill those ads.

Killing the ads.

I believe that my greatest mistake and the greatest thing ever happening to me up to this point in ads is failing to kill those campaigns that aren't bringing money. It's a play on hope. You hope that just few more dollars will bring a sale, though it never comes. Knowing when to kill is crucial. I believe that if I had killed the losers at the right time I could have broken even, or have been in little debt. Though I am happy that this happened to me. I have learned a lot.

How could you have possibly tested 54 products with only 1K in FB ads?

You need to work on product selection more BEFORE you start running ads. Don't run ads on any old product. Do some due diligence and spend some time on critical thinking and then run ads.

You should be spending $200 (minimum) testing 5 products. Not $20 testing 50 different ones.

 

[eTox]

How could you have possibly tested 54 products with only 1K in FB ads?

You need to work on product selection more BEFORE you start running ads. Don't run ads on any old product. Do some due diligence and spend some time on critical thinking and then run ads.

You should be spending $200 (minimum) testing 5 products. Not $20 testing 50 different ones.

@IGP thank you for sharing your wisdom I indeed f#ked on product selection part and I am utterly terrible at it. Since I have a variety of products to dropship my biggest concern is product selection. I really don't know what to try out. BUT,

here is the big BUT: what I liked about this approach was I able to learn, and I believe uncle IGP will approve this. I did not know what products to pick so I picked a niche and stuck with it. Then I asked myself what products could I sell? So I chose 5 product types and took 1-3 products from each and then 5 or more from another one and I ran $5 PPE ads for few days to see if there is any engagement. This way I was able to get a better understanding of how to pick the products because I would place a mental bet on a product's success and see if I was right. I was also able to get a better insight into when exactly and at what circumstances to kill those ads.

From my findings, cheap products that sell for cheap barely work for me both with cheap price, and giveaways. Products that are $20-40 retail are the ones that have brought the sales for the most part. And one drastic thought is that more expensive products ($30-50) sell better when they are listed more expensive like $30 instead of $20.

Now back to the original trail of thought: by launching mass amounts of products and campaigns I was able to a) have a better understanding of what products sell and for what prices b) when to kill campaigns as not to lose money on them and see the product's potential through customer engagement.

That being said, I need to stop doing that, because I am clearly only losing money this way and rather focus on careful product selection as IGP has suggested. This is what I am going to do for now and get back with results on this.

Also, I've figured that niches that aren't popular aren't popular for a reason and that's because it's harder to target the right people because they have few passionate groups and just a few large broad interests in them. Therefore it's harder to identify buyers. However, I may be wrong on this. But I do believe that going to a large established niche is a better move now like going from over abused turtles to a popular dog breed.

PS: I feel the pain of selling non-custom merch. But my goal out of dropshipping is not to make a killing, but rather to learn how to research an audience, find out what they want, and learn how to properly launch campaigns that will make, not lose money.

 

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[eTox]

I thought it was time for an update.

• 50 Orders
• $1750 Ad Spend

I have stopped drop shipping from Aliexpress right before Christmas. I just couldn't handle any more these low margins, high shipping times, and these customer few customer support questions due to my suppliers messing everything up.

I then decided to sell really cute t-shirts to women. I hired my first designer on Upwork and being the optimist I am I paid generously $20 per design and got myself 10 really good (What I thought) designs both for mugs and tshirts. I spent a week creating a perfect website, adding all the products. I then launched the ads.

That's when the reality started tumbling down on me. I was not even getting half the results I was from the products I advertised from Aliexpress. It simply showed that a) the targeting was spot on b) people loved the designs c) nobody cared enough to even visit the website to find out more. This just shows the assumptions I've made.

It's funny that I look back now and realize that I've blown almost $280 CAD on useless designs, $250 CAD on ads, $25 on set up fees. There we go. That's how money is wasted. $550 bucks on ego went down the drain. Why? Because a) I assumed I knew it all now b) I didn't validate my ideas

Up to this point the amount of money I've spent on learning the ecom game is probably over $3K due to fees, costs, and ads. And right now, I feel more confused than ever. Yes I've learned a ton and I wouldn't trade this knowledge for anything.

Where did I get the money for all of this? Well, the games that I've made last year started paying off in August with 1K,2K,3K a month. I was about to collapse with my last $20 in the bank not knowing what else to do. Nothing to eat, just rock bottom. And then the money from my last year's efforts started pouring in like angels from the sky.

Damn, what a lucky douchebag I am sometimes.

So enough of snot and tears for now.

 

[eTox]

Where am I right now?

The income stream is losing it's trend and I am confident it will die off this month. So I really need to get some shit running profitably...

I have:

• $2.5K to invest
• State of confusion

What I have tried:

• Promoting Aliexpress products on Facebook
• Promoting custom merchandise on Facebook

What have I learned?

• I am confident in targeting the right people
• I am confident in researching niches
• I believe I have identified a process and guidelines for testing products
• F+S never worked for me

What are the outcomes?

Dropshipping from Aliexpress is really lucrative in the sense that you don't touch, nor hold inventory. But on the flip side, it's really bad because you have no control.

1. The profit margins are slim to none after ad spend and products ain't that cheap on there
2. Suppliers tend to F*ck up all the time
3. Really slow shipping times with ePacket + Chinese holidays for the win...
4. Promoting products that were sold and promoted before
5. Lot's of customer complaints

Basically, I liked selling that way but now it's just unbearable. But only if a) the shipping times were faster b) the profit margin was greater. I have to say that I could take a product and sell it, but it costs just way too much. When you add my novice advertising skills and add a $10 CPA on top of that plus the testing costs for the product, my profit margin is almost close to none.... $5, but with lots of testing debt on top.

Selling t-shirts. I still believe tshirts are selling. Maybe not as crazy as they were before, but I believe people are buying them. The mistakes that I have done are that I invested in the designs before seeing whether there was demand for them or not. I also tested shitty designs.

I feel like I could still sell t-shirts, but there has to be a better spin to it. I feel like I have to spend a lot of money creating nice designs and lot's more testing to find winning products. The same thing applies to other custom merchandise like mugs, clocks, etc.

It seems that it takes $20 for a nice design, then it takes around $10-$60 to test that design. It's basically either the design fails right away and you spend $20 design + $10 ad spend or it fails later down the line and you spend $20 on the design and additional $60 or so on testing. As far as I understand it's a numbers game. The more designs that you launch and test, the more chances are that you will find one that will win.

The question is... how many designs should I create and test before I find a winner. I am confident now that I can create lot's of designs and test them but I am even more confident that I will sell none... The cost of testing is just too much, creating your own shitty designs isn't even an option.

It just all comes down to the same F*cking thing.

ARE YOU SOLVING A PROBLEM OR A PAIN POINT? NO? THEN GET THE F*ck OUT. lol...

 

[eTox]

You should be spending $200 (minimum) testing 5 products. Not $20 testing 50 different ones.

I guess @IGP is always right... The problem is me. I am afraid to spend $200 more bucks testing just 1-5 products. I feel like they are just going to fail and I will yet again lose my money.

But then again ...

You need to work on product selection more BEFORE you start running ads. Don't run ads on any old product. Do some due diligence and spend some time on critical thinking and then run ads.

Was it really that hard for all of you guys when you were just starting out? Or am I the only one struggling with this so much in my mind... I feel like going insane!

 

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[RoadTrip]

Was it really that hard for all of you guys when you were just starting out? Or am I the only one struggling with this so much in my mind... I feel like going insane!

Yes, it still hard for me. I've tried a few hundred dollars on testing products through Aliexpress. Had lots of clicks but almost no add to carts.

Have you only done the Free + Shipping? What if you were selling higher priced items? You mention you already know how to put a product in front of the right audience, which is the biggest challenge most of us face.

 

[Azure]

Does anyone actually need the products you're selling? Seems like you're just clicking around on AE trying to find something.

Work backwards from a problem.

 

[eTox]

Guys, Aliexpress is a dead end. It's not a business. It's a fantastic way to learn about selling and acquiring massive heeadaches with customer support. It's a sure way to lose your head and money.

I would not do it again if I wanted to make money.

 

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[IGP]

Guys, Aliexpress is a dead end. It's not a business. It's a fantastic way to learn about selling and acquiring massive heeadaches with customer support. It's a sure way to lose your head and money.

I would not do it again if I wanted to make money.

Everything has its purpose...

You use it validate your idea, not to build a business. And you damn sure don't use it during Nov. Dec. Jan. ie. (Singles Day, Christmas & Chinese New Year)

 

[Sanj Modha]

Use Aliex to build relationships. Put your wholesale hat on and you'll find some Gold.

 

[Ravengaar]

Guys, Aliexpress is a dead end. It's not a business. It's a fantastic way to learn about selling and acquiring massive heeadaches with customer support. It's a sure way to lose your head and money.

I would not do it again if I wanted to make money.

Hi, I've been following this thread and was wondering what happened? Thanks for sharing.

 

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