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Any Ecommerce or Dropshipping Out There?

Discussion in 'Business Models, Niches, Industries' started by RockyRambo, Apr 14, 2019.

  1. RockyRambo
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    RockyRambo New Contributor Read Millionaire Fastlane

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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!
     
  2. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    How do you expect to find a unique product that is dropshipped? Let's say I have a product and I offer to dropship to other businesses.

    Now this is what you are expecting:
    1) I am going to charge you so little that you get a 20-40% margin
    2) I am only dropshipping for you, so it is unique
    3) I have been selling this for years, but
    a) I've never ever thought about selling it on Amazon or my own website
    b) Nobody else has asked me to dropship it, you happen to be the first person to ask

    Think about it.
     
    Readerly, Xeon, Eskil and 3 others like this.
  3. Kid
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    Kid Bronze Contributor Speedway Pass

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    What Bio said - it might be impossible.

    The solution would be to work on creating unique product and source it from China.
    It might better (if not "only") way to get what you want.

    By unique i mean something that has improvements over existing products
    that customers are already buying (for example, suggestions from negative amazon reviews).

    Just a thing to consider.
     
    Readerly likes this.
  4. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I prefer the idea that I first picked up from @Vigilante, that it is worth finding a product that has not been previously imported into the country where you intend selling.

    It is a lot easier now that in my 2019 book revision I have expanded the number of B2B sourcing links to 41 countries.

    By having your improved product made in China, you are still running the risk of having it quickly copied.

    Walter
     
    Kid, Xeon and Vigilante like this.
  5. RockyRambo
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    RockyRambo New Contributor Read Millionaire Fastlane

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    Thanks Biophase - i guess im not looking for products that are exclusively unique to my store, but products that wont be sold in every store, but point taken.

    Thanks Kid - I've thought about that, there's a lot more barriers to entry (creating a custom product) which is great to keep the masses out, something i might consider.

    Thanks Walter - Yeah, ive visited a few different Asian countries over the years and always see a few products/get lots of ideas to take back home.
     
    Kid and Walter Hay like this.
  6. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    If they sell to you, why wouldn't they sell to someone else? Whatever you find is going to be sold in every store.
     
    Walter Hay likes this.
  7. GrandRub
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    GrandRub Contributor I've Read UNSCRIPTED

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    but dont you think it is a difference if you sell a very broad and trendy product like fidget spinners or "boho jewelry" that is realy sold everywhere - or a very nichy product that you dont see everywhere, but is still dropshipped ? but that product will surely pop up in every niche store and way less possible customers... so you are right i guess :D

    so your strategy would be - find something that isnt sold on aliexpress? because everything sold on aliexpress is very easy to find for every dropshipper from every niche?
     
  8. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    My point is that every dropship product you will see everywhere. What would be the limitation on the number of websites selling a product that is drop shipped from one source?
     
    Smuggo likes this.

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