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Hey everyone,
I was just after some feedback from people in ecommerce who've had experience dropshipping.
Background - I've been trying to build an online business for many years now, started in affiliate marketing for a few years with no luck. In 2017 i jumped into ecommerce using the whole aliexpress/shopify/facebook approach and ended up breaking even with about $10k revenue in total. After moving on and trying some more affiliate marketing & online marketing consulting i finally made a choice at the end of 2018 to focus on ecommerce as it's a real business with long term prospects (unlike affiliate marketing campaigns) and also doesnt require dealing with clients (i want to be able to work completely online, at any time of the day, anywhere in the world).
The Plan - My plan was to build a completely premium ecommerce store in my chosen niche with great customer service, high quality unique products, and a brand that feels great, feels trustworthy and will build organically over time. Previously i had done nasty and cheap aliexpress style dropshipping (3 week shipping with average products wrapped in garbage bags and duct tape) which does not fit the requirements of my store at all, as i want reasonable shipping times (no more than 5-7 business days), and quality products that are presented well and don't have that cheap feel you get from aliexpress. So the logical step from here for me was to find and use local dropshippers in the US, companies that have warehouses full of the type of products that i want to stock and sell on my ecom store. My short term plan is to use dropshippers only to fulfill and in the longer term i would wholesale and self fulfill my highest selling products to give myself a much better margin. I planned to hit this using a mix of SEO, Adwords, FB ads & email marketing.
Currently i've set myself up legally, have an incredible looking website, and am now in the process of contacting dropshippers and trying to get some prices on products to figure out how viable this niche will be for me (im aiming for gross profit somewhere between 30%-40% which will give me some advertising budget and hopefully some sort of profit - longer term id expect to increase this by wholesaling my own products and getting more of my traffic from SEO and my email list)
The Problem - Just the last few days ive really been doubting my plan for a number of reasons, i was aware of these issues before but had the confidence that it's such a big market that i could slice off a small piece for myself and didnt think they were deal breakers.
1) My current niche (baby products) and products im looking to sell (strollers, car seats, diaper bags, etc) put me in the position where im not only competing against large online competitors (Amazon, Ebay) but also brick and mortar competitors (Walmart, Target, etc) who both have SEO ranks ill never be able to beat (had planned to focus my shop blog on low competition related topics though), large advertising budgets and (assuming) lower prices.
2) A lot of my products are also slightly pricier ($100-$400) and are the sort of thing people might want to inspect before they commit to (more likely to go in store to Walmart or Target, try thing out, etc) and i feel like i might be setting myself up for a fall here trying to compete with them. (Assuming they'll have lower prices and also brand recognition).
3) So far the number of actual dropshippers ive found servicing this niche is a lot less than i expected and i've got a feeling that i'll end up selling similar or the same products as Amazon/Walmart, etc and will struggle due to people comparison shopping. I had hoped to find a lot more niche dropshippers so i could find UNIQUE products that would help me get some sort of a competitive advantage and that people couldnt just go to Amazon and get it 20% less with faster shipping. These assumptions might be totally wrong but they also make a lot of sense in my mind (please correct me if im wrong though!)
The Question - I'm just doubting myself and my plan basically and would love some feedback or advice about my plan from people who've got Ecom or dropshipping experience. Also just wondering how it's possible to make local dropshipping (US based suppliers) profitable with such lower margins (ive heard anywhere from 20%-40% margins but will know more once i get access to my dropshippers catalogues)?
Im strongly considering going back to square one and focusing hard on finding a much smaller niche that Amazon/Walmart cant service properly and don't dominate the SERPs so that i can have a greater chance of success (less online comparison shopping, less brick and mortar stores for them to visit and test products in person, less SEO competition, less Adwords & FB competition, etc). My only concern here is that i may not find any decent dropshippers to work with or they may only have a very small variation of products to sell. (as that's been the experience with my current huge niche so far)
Is there a better way to make local US based dropshipping work successfully? The head-space im in right now i just suddenly feel like it's all a lot work with very fine margins and little profit at the end of it. Longer term i play to wholesale but initially id like to start with dropshipping.
Any tips, advice, 'slapping some sense into me' or no sugar coated type answers from ecom/dropshipping veterans would be really appreciated, thanks!
I was just after some feedback from people in ecommerce who've had experience dropshipping.
Background - I've been trying to build an online business for many years now, started in affiliate marketing for a few years with no luck. In 2017 i jumped into ecommerce using the whole aliexpress/shopify/facebook approach and ended up breaking even with about $10k revenue in total. After moving on and trying some more affiliate marketing & online marketing consulting i finally made a choice at the end of 2018 to focus on ecommerce as it's a real business with long term prospects (unlike affiliate marketing campaigns) and also doesnt require dealing with clients (i want to be able to work completely online, at any time of the day, anywhere in the world).
The Plan - My plan was to build a completely premium ecommerce store in my chosen niche with great customer service, high quality unique products, and a brand that feels great, feels trustworthy and will build organically over time. Previously i had done nasty and cheap aliexpress style dropshipping (3 week shipping with average products wrapped in garbage bags and duct tape) which does not fit the requirements of my store at all, as i want reasonable shipping times (no more than 5-7 business days), and quality products that are presented well and don't have that cheap feel you get from aliexpress. So the logical step from here for me was to find and use local dropshippers in the US, companies that have warehouses full of the type of products that i want to stock and sell on my ecom store. My short term plan is to use dropshippers only to fulfill and in the longer term i would wholesale and self fulfill my highest selling products to give myself a much better margin. I planned to hit this using a mix of SEO, Adwords, FB ads & email marketing.
Currently i've set myself up legally, have an incredible looking website, and am now in the process of contacting dropshippers and trying to get some prices on products to figure out how viable this niche will be for me (im aiming for gross profit somewhere between 30%-40% which will give me some advertising budget and hopefully some sort of profit - longer term id expect to increase this by wholesaling my own products and getting more of my traffic from SEO and my email list)
The Problem - Just the last few days ive really been doubting my plan for a number of reasons, i was aware of these issues before but had the confidence that it's such a big market that i could slice off a small piece for myself and didnt think they were deal breakers.
1) My current niche (baby products) and products im looking to sell (strollers, car seats, diaper bags, etc) put me in the position where im not only competing against large online competitors (Amazon, Ebay) but also brick and mortar competitors (Walmart, Target, etc) who both have SEO ranks ill never be able to beat (had planned to focus my shop blog on low competition related topics though), large advertising budgets and (assuming) lower prices.
2) A lot of my products are also slightly pricier ($100-$400) and are the sort of thing people might want to inspect before they commit to (more likely to go in store to Walmart or Target, try thing out, etc) and i feel like i might be setting myself up for a fall here trying to compete with them. (Assuming they'll have lower prices and also brand recognition).
3) So far the number of actual dropshippers ive found servicing this niche is a lot less than i expected and i've got a feeling that i'll end up selling similar or the same products as Amazon/Walmart, etc and will struggle due to people comparison shopping. I had hoped to find a lot more niche dropshippers so i could find UNIQUE products that would help me get some sort of a competitive advantage and that people couldnt just go to Amazon and get it 20% less with faster shipping. These assumptions might be totally wrong but they also make a lot of sense in my mind (please correct me if im wrong though!)
The Question - I'm just doubting myself and my plan basically and would love some feedback or advice about my plan from people who've got Ecom or dropshipping experience. Also just wondering how it's possible to make local dropshipping (US based suppliers) profitable with such lower margins (ive heard anywhere from 20%-40% margins but will know more once i get access to my dropshippers catalogues)?
Im strongly considering going back to square one and focusing hard on finding a much smaller niche that Amazon/Walmart cant service properly and don't dominate the SERPs so that i can have a greater chance of success (less online comparison shopping, less brick and mortar stores for them to visit and test products in person, less SEO competition, less Adwords & FB competition, etc). My only concern here is that i may not find any decent dropshippers to work with or they may only have a very small variation of products to sell. (as that's been the experience with my current huge niche so far)
Is there a better way to make local US based dropshipping work successfully? The head-space im in right now i just suddenly feel like it's all a lot work with very fine margins and little profit at the end of it. Longer term i play to wholesale but initially id like to start with dropshipping.
Any tips, advice, 'slapping some sense into me' or no sugar coated type answers from ecom/dropshipping veterans would be really appreciated, thanks!
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