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Anyone with experience with drop shipping?

Discussion in 'Product Creation, Inventing, Importing, Sourcing' started by regalforte, Dec 20, 2014.

  1. regalforte
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    regalforte New Contributor

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    So about a year ago on this date, me and a friend opened up a store on shopify, got our EIN numbers, contacted a bunch of suppliers, uploaded a bunch of products to our sites, had programmers optimize conversion rates, listed everything at MAP price, and went crazy with google adwords.

    To this day, we've both failed and after uploading over 5000 products to our inventory, we managed to proceed and sell less than 10 items combined with half the items resulting in negative cash flow (due to shipping and discounts). A few months later one of our identity was stolen (one of the suppliers was probably a skunk) and the culprit proceeded to go on a spending spree with my credit card before I caught on and had the fees reversed. Meanwhile advertising fees and shopify fees were piling on. Pretty nice so far.

    Yet everyday I hear stories about people who make millions and live 4-hour workweek lifestyles with drop shipping. So I decided to turn to you guys to ask: Have anyone tried drop shipping? I was thinking of giving it another try now that I have the experience of failing and can learn from the mistakes.

    Is drop shipping still a good fastlane opportunity? Were we just extremely unlucky or inexperienced? Are those $200 online drop shipping courses a sham? (yep we paid for one)
     
  2. Supercar
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    Supercar Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I use some drop shipping to supplement my own product line. Had it been my main source of revenue I would've closed my business a long time ago. The guys who had nothing but low prices all came and went.

    Drop shipping fails the Commandments of Entry (anyone can do it), Control (you have no leverage with the manufacturer, do not control your market, and in your case you do not even own your store), and even Need (other retailers can match the MAP prices, and they know their customers better).

    You would have to grow very big and sink in a lot of money displacing your competition, beating them on price or service, before you could gain some control over your market or manufacturers.
     
    Last edited: Dec 20, 2014
  3. Phones
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    Phones Break your boundaries Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    How did programmers optimize conversion rates if you sold less than 10 items?

    Dropshipping sucks, why? Low barriers of entry, anyone can do it, specially drop shipping from US.

    Drop shipping from China, even worse, anyone can do it, and it takes forever to arrive.
     
  4. Supercar
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    Supercar Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Don't forget that as a new dealer you do not get good dealer pricing. Other established high volume dealers get to pocket 10, 20, 30% of MSRP more than you do.

    With your 4-hour per week customer service you can't offer a Unique Service Proposition either.
     
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  5. jazb
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    jazb Silver Contributor Read Millionaire Fastlane Speedway Pass

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    Dropshipping is so mainstream now, meaning there is a load of sh*t out there for people trying to learn about it. I guarantee those $200 courses are just classes telling you how to copy and paste from amazon to ebay. Theres even MLM schemes incorporated into it. thats how crazy it is now.

    Its the barrier to entry you have to beat. Try ringing up wholesalers and ask if they will send out individual items for you. (you might have to pay extra for it). Find guys off the grid, contact them and convince them to do it.

    Also, this is just an idea. see if you can dropship expensive/heavy items from china. the price is high, but if they ship DHL the product arrives very quick. I think that could work.


    Dropshipping is still great, just gotta think outside the box a little bit.
     
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  6. Phones
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    Phones Break your boundaries Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    The problem with this is that the customer will most likely have to clear customs, which involves having the information of the supplier, and price paid to him. (unless they ship with duty-paid, which I doubt)
     
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  7. H. Palmer
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    H. Palmer Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I started drop shipping last March and so far I've made some easy money with it, although drop shipping is a technique that is not without difficulties.

    The first thing you have to do before loading up any product is calculate your margins.

    You will have to take all the costs into account, that includes your conversion guys, credit card merchant fees, shipping, fees for shopify, adwords, and everything else that needs to be paid in order to operate.

    The transaction fees are easiest to calculate, but costs for programmers and paid ads should be spread out over the total of your transactions.

    I have made between 300 and 900 euros (I am in Europe) per month with an inventory of about 300 drop shipping products. I sold about 60 per month until the end of November when I took a break.

    I haven't been looking over your shoulder, but my suspicion is:

    . you haven't looked at your margins very well.
    . you have uploaded hundreds of random products. Better is to do a keyword check first and see how much competition there is for a given product.
    . you didn't adapt your paid ad campaign after the initial - lack of - results came in. Meaning you should have thrown out everything that didn't perform.

    If you want more in depth background about how to set up a drop shipping website, I would refer to you the knowledge that is taught in Adam Short's Niche Profit Classroom. Adam teaches how to build passive income websites and uses a very ingenious method for a Go/No Go-decision concerning building a new information product with a website around it.

    The exact principles apply to every product however so his technique is very useful for determining successful drop shipping product offers.
     
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  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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    When I started my store it was 100% dropship. But I only had 25 products. Your store with 5000 products was probably way too broad and you couldn't concentrate on marketing any single product or category.
     
  9. JPHerrmann
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    JPHerrmann Contributor

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    To build an effective online store. You need to put time into it. The market is just so saturated. Spend a time promoting your business brand, and make it something thats unique.

    Try to sell higher end products, and look for american wholesalers first.

    Don't be fooled by what most consider "Drop Shipping"... everyone thinks you have to outsource. I have had success as a drop shipper for years in the weigh measurement industry. Drop shipping from suppliers in the USA "Toledo Scale" to the customer. It is much more effective to work with local wholesalers and manufacturers, the smaller they are, the more likely they will do individual orders.

    This link had good info that goes with my example:

    https://ecommhub.com/blog/5-secrets-to-find-reliable-suppliers-for-your-drop-shipping-business/

    Good Luck and try not to get caught up in the hype of importing.

    JPH
     
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  10. Wuz
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    Wuz Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    IMO,

    5000 products is too much at the beginning. You dont have a list of clients (i assume) that is already wiling to buy recurrently from you, so you will not be able to market so many products at the same time.

    So you should first concentrate your efforts in a product, make sure you give something to your customers that few or no one is giving to them and build from there. Separate yourself from the crowd by giving something your competitors don´t.

    you have the resources, now you have to put them at use properly.
     
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  11. H. Palmer
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    H. Palmer Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Yes, it's smarter if you combine drop shipping with other internet marketing techniques.

    For instance, create an opt in page that gives the buyer something for free in exchange for his email address.

    This is easier to do if you run a niche website that offers products that you like yourself.

    If you run a generic website like you are doing now, this is harder, because you have visitors with a lot of different interests and tastes.

    But still, you can think of something to give away for free and at the very least give them the opportunity to sign up for a newsletter that you publish regularly where they can find some discounts.
     
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  12. Kingsta
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    Kingsta Bronze Contributor Speedway Pass

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    Rather than drop shipping, find a product that you believe in/researched well/has good margins. Purchase x amount of that product and sell it on your site. This way you have control of the stock and don't have any trouble with deliveries. Eventually you could manufacture the product yourself if it becomes successful.

    Drop shipping isn't a get rich quick scheme otherwise everyone would do it. It's a lot of hard work.

    P.S If you're looking for a manufacturer try Alibaba etc
     
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  13. G_Alexander
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    G_Alexander Does it Cash Flow? Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    Dropshipping is still alive and well.

    Start with 50 products. Learn them in and out. Write good, organic, content (two to three paragraphs per each item). Don't be spammy. Learn a little SEO (proper ALT tags, file naming ex. "niche--product-01.jpg", quality backlinks...etc. etc.). Have a CLEAN site. Target 1 or two keywords and spend $10 a month initially on adwords...see how that converts for a couple months and tweak accordingly.

    There are dozens of free adwords, SEO, ecommerce resources out there. You are not trying hard enough. Don't throw sh*t at the wall and hope something sticks. Take a targeted approach and be patient.

    If I quit in month six ($2,000 gross sales), I never would have seen month 8 ($10,000 gross sales).
     
  14. DreamDrivenLife
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    DreamDrivenLife PARKED

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    Firstly thanks for adding me to the forum. I'm a 20y/o college sophomore with about a year of experience in shopify.. Generated about $12,000 in sales within my first 3 months and it has inspired me to shoot for the stars. I've received a ton of questions so I decided to start a Youtube channel where I will start a new store from scratch and document the process so that I can give lots of free value to those of you looking for some pointers and techniques. If you're interested, just let me know or feel free to click to check out my channel https://www.youtube.com/channel/UCKf...4shFnIWYzLe9uQ
     
  15. Brando123
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    Brando123 PARKED

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    Hi. I've been working as a social media marketing specialist in a dropshipping company from Singapore. Based from the experience I acquired with dropshipping business, I believe that in your case, being too broad is one of the factor that caused your failure because you could not focus on a specific niche. Actually, it's not really bad at all if you want to be too broad. Actually our company is also drop shipping different kinds of products BUT, although we are too broad, we still pick the right product that we thought that would be a winning product in the long run. You don't need to spend too much on programmers. If you have some background on setting up a shopify store, then you can do it on your own. Spend on getting a good product researcher, good creatives specialist and the last one is a facebook ads expert. Facebook ads is not just as simple as inputting keywords then letting the campaign runs as it is. You should build an audience. These audience are those who are more likely to buy your products. I think that's all I can share.
     

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