Jeffrey Smith
New Contributor
Here is my first (and probably last) attempt at "push" marketing. I saw a webinar about eCommerce. The huckster was showing very impressive sales figure netting before taxes about $200,000 per month. Yes, per MONTH. He went on to explain his basic method for high profit margins.
His webstore was hosted by Shopify. He used AliExpress.com as his dropshipper. AliExpress is the retail version of the Alibaba.com wholesaler. Drop shipping means that you don't hold inventory. When your customer orders a product from your webstore, you receive confirmation that payment was received and then you notify your dropshipper to send directly the product to your customer, and the dropshipper puts your company label and address on the package. The package looks like it came from you.
Shopify has several apps, a few are free and the others are paid monthly. One of the free apps is called "Oberlo" that provides an automated connection between your Shopify account and AliExpress. I had a hard time pronouncing it, until I realized that it sounds like what the Wicked Witch guards are chanting in the Judy Garland movie, "The Wizard of Oz": "o-BER-lo, YO oh, o-BER-lo, YO oh." (My thought process can be very non-linear.)
When an order comes into Shopify, you tell Oberlo with a mouse click to fulfill the order. Oberlo talks directly to AliExpress through the Google Chrome extension to place the product order from your AliExpress account, including the shipping details. If you have 1 or 100 orders, Oberlo can automate the entire process. Oberlo is a *MUST* for a dropshipper and it's free to use with no extra charges. As a former software geek, I am thinking, "Wow, this is exactly what I need, because I am so illiterate with web technology."
But then a tiny voice in the back of mind was whispering to me, "You're not seeing the whole picture."
My Shopify experience was a free 14-day trial. I purchased for $14 a 1-year domain name to link to my Shopify webstore (Shopify automatically handles the connection details). I decided to try "Jewelry" and used Oberlo with its Google Chrome extension app thing to point and click at the AliExpress jewelry stuff that I wanted to try selling. Oberlo imported the entries into my webstore.
I ran into some issues. I needed to figure out how to:
1. Offer "free product plus shipping cost" entries, as well as "ordinary" retail products?
Answer: Go to YouTube and find "how to" videos for Shopify.
I found several similar answers, but none worked exactly as shown. I found the solution with my own experimentation.
2. Advertise through Facebook ads?
Answer: Go to YouTube and find "how to" videos for Facebook advertising.
I found several similar answers, but none worked exactly as shown. I found the solution with my own experimentation.
3. Deal with returns?
Answer: Eat it. Returns probably won't happen, because the customer must pay for return shipping. $5 shipping to return a $2 product doesn't make sense.
But that tiny voice was still whispering to me, "You're not seeing the whole picture."
Wake-Up Call #1: "You must collect and pay sales tax exactly as required by the regulations, or the government will literally fine you out of existence and throw your a$$ in jail."
OMG! I don't want to be an agent of the government. Oh, well, let's take a look at the sales tax thing; maybe it's not so bad... OOPS! Big mistake. My eyes glazed over as I looked at the sales tax compliance regulations for my state, county, and city. I'd rather grind sand into my eyes.
But that tiny voice was still whispering to me, "You're not seeing the whole picture."
I was working "balls to the walls" to maximize my 14-day free trial. My goal was to generate enough sales in 14 days to recoup my investment, which would be over $300 for the annual basic membership, plus the cost of the URL domain name, plus the cost of about 10 e-books ($3 each) about getting started in Shopify and Facebook ads (the e-books were all mostly useless), plus the cost of one Facebook ad ($35).
After about a week, and only 4 days of running my $5-per-day Facebook ad for a free product (only pay for shipping), I got my first order! Shipping charge to customer $10, product cost and dropshipping from AliExpress $3. Net profit would be $7 (70% profit margin). I still had not resolved the sales tax compliance issue, but the customer was out-of-state and I didn't have to collect sales tax.
But that tiny voice was still whispering to me, "You're not seeing the whole picture."
I jumped onto Oberlo to fulfill the order. Oberlo says, "YOU DO NOT HAVE ANY ORDERS". WTF? Shopify shows an order, fully paid and ready to be fulfilled. Shopify customer support says, "We don't know what's wrong. Go call Oberlo." Wait, you've helped me before with Oberlo issues. What's different now?
Wake-Up Call #2: ARE YOU F*ckING KIDDING ME?! You're passing the buck on an integral app that thousands of Shopify webstores depend on, and you don't have a direct connection to the Oberlo support staff?
Suddenly, that tiny voice was not whispering anymore; it was yelling at me, "Selling overpriced costume jewelry to people who are too stupid to order it directly from AliExpress is NOT YOUR MISSION! This customer support screw-up is your perfect excuse to jump ship before your free trial expires. You want a business with high-value (affluent) clients who can recognize value, decide quickly, and have the capacity for many high-profit opportunities. You want clients who will entrust their money to you, because you can multiply it and return it to them in a reasonable time. You already know the perfect vehicle, Real Estate, far better than most brokers. You just need to tweak what you are doing to find the right high-value clients to get the ball rolling."
Clarity of thought and certainty of mission have a way of revealing the wrong path, even when that wrong path seems to be working.
In less than 10 minutes, I cancelled the order and refunded the customer's money ("So sorry, the product is unavailable"), I locked the webstore to stop any more potential sales, deleted the apps, verified there were no other orders, then deleted the webstore. I went over to Facebook, stopped the ad, and deleted my account. I ignored the email from Shopify apologizing for their customer support snafu. I am SO done with eCommerce retail sales.
Many others love Shopify, but eCommerce of selling overpriced junk jewelry to poor people violates my ethical standards and self-respect. I probably spent less than $50 to learn a valuable lesson about my character and what motivates me.
My high-value clients won't invest in my real estate deals until they are comfortable investing in me. High-value clients are word-of-mouth referrals. An accredited investor knows other accredited investors. That's "pull" marketing.
I must re-focus on finding great deals, getting the deal under contract, then showing it to my few accredited investors who will bring in their friends to help finance the deal. The best part is that I am paid to find great deals, and the investors get back all of their investment plus profit (mostly tax-free), and it's backed by solid real estate. Now, THAT is offering real value that matches perceived value.
What the hell was I thinking when I tried eCommerce? I want high-profit per transaction with low volume, not low-profit per transaction with high volume. Just one real estate deal per month could earn $50,000+ net to me each month, plus monthly passive cash flow for years, plus back-end profit split of resale or refinance. No sales tax bullspit on real estate deals; just income tax, which I already pay, and there are some nice tax shelters for real estate.
"If you're going to be thinking anyway, then think big." -- Donald Trump, Real Estate Entrepreneur
I am glad that I did my own research with e-books and YouTube, instead of buying into that $2500 "eCommerce coaching crap." Everything he was offering to teach is available at low-cost or no-cost, when you're willing to spend some time researching for yourself.
Shiny object syndrome almost cost me dearly. That is, it almost cost me my self-respect.
His webstore was hosted by Shopify. He used AliExpress.com as his dropshipper. AliExpress is the retail version of the Alibaba.com wholesaler. Drop shipping means that you don't hold inventory. When your customer orders a product from your webstore, you receive confirmation that payment was received and then you notify your dropshipper to send directly the product to your customer, and the dropshipper puts your company label and address on the package. The package looks like it came from you.
Shopify has several apps, a few are free and the others are paid monthly. One of the free apps is called "Oberlo" that provides an automated connection between your Shopify account and AliExpress. I had a hard time pronouncing it, until I realized that it sounds like what the Wicked Witch guards are chanting in the Judy Garland movie, "The Wizard of Oz": "o-BER-lo, YO oh, o-BER-lo, YO oh." (My thought process can be very non-linear.)
When an order comes into Shopify, you tell Oberlo with a mouse click to fulfill the order. Oberlo talks directly to AliExpress through the Google Chrome extension to place the product order from your AliExpress account, including the shipping details. If you have 1 or 100 orders, Oberlo can automate the entire process. Oberlo is a *MUST* for a dropshipper and it's free to use with no extra charges. As a former software geek, I am thinking, "Wow, this is exactly what I need, because I am so illiterate with web technology."
But then a tiny voice in the back of mind was whispering to me, "You're not seeing the whole picture."
My Shopify experience was a free 14-day trial. I purchased for $14 a 1-year domain name to link to my Shopify webstore (Shopify automatically handles the connection details). I decided to try "Jewelry" and used Oberlo with its Google Chrome extension app thing to point and click at the AliExpress jewelry stuff that I wanted to try selling. Oberlo imported the entries into my webstore.
I ran into some issues. I needed to figure out how to:
1. Offer "free product plus shipping cost" entries, as well as "ordinary" retail products?
Answer: Go to YouTube and find "how to" videos for Shopify.
I found several similar answers, but none worked exactly as shown. I found the solution with my own experimentation.
2. Advertise through Facebook ads?
Answer: Go to YouTube and find "how to" videos for Facebook advertising.
I found several similar answers, but none worked exactly as shown. I found the solution with my own experimentation.
3. Deal with returns?
Answer: Eat it. Returns probably won't happen, because the customer must pay for return shipping. $5 shipping to return a $2 product doesn't make sense.
But that tiny voice was still whispering to me, "You're not seeing the whole picture."
Wake-Up Call #1: "You must collect and pay sales tax exactly as required by the regulations, or the government will literally fine you out of existence and throw your a$$ in jail."
OMG! I don't want to be an agent of the government. Oh, well, let's take a look at the sales tax thing; maybe it's not so bad... OOPS! Big mistake. My eyes glazed over as I looked at the sales tax compliance regulations for my state, county, and city. I'd rather grind sand into my eyes.
But that tiny voice was still whispering to me, "You're not seeing the whole picture."
I was working "balls to the walls" to maximize my 14-day free trial. My goal was to generate enough sales in 14 days to recoup my investment, which would be over $300 for the annual basic membership, plus the cost of the URL domain name, plus the cost of about 10 e-books ($3 each) about getting started in Shopify and Facebook ads (the e-books were all mostly useless), plus the cost of one Facebook ad ($35).
After about a week, and only 4 days of running my $5-per-day Facebook ad for a free product (only pay for shipping), I got my first order! Shipping charge to customer $10, product cost and dropshipping from AliExpress $3. Net profit would be $7 (70% profit margin). I still had not resolved the sales tax compliance issue, but the customer was out-of-state and I didn't have to collect sales tax.
But that tiny voice was still whispering to me, "You're not seeing the whole picture."
I jumped onto Oberlo to fulfill the order. Oberlo says, "YOU DO NOT HAVE ANY ORDERS". WTF? Shopify shows an order, fully paid and ready to be fulfilled. Shopify customer support says, "We don't know what's wrong. Go call Oberlo." Wait, you've helped me before with Oberlo issues. What's different now?
Wake-Up Call #2: ARE YOU F*ckING KIDDING ME?! You're passing the buck on an integral app that thousands of Shopify webstores depend on, and you don't have a direct connection to the Oberlo support staff?
Suddenly, that tiny voice was not whispering anymore; it was yelling at me, "Selling overpriced costume jewelry to people who are too stupid to order it directly from AliExpress is NOT YOUR MISSION! This customer support screw-up is your perfect excuse to jump ship before your free trial expires. You want a business with high-value (affluent) clients who can recognize value, decide quickly, and have the capacity for many high-profit opportunities. You want clients who will entrust their money to you, because you can multiply it and return it to them in a reasonable time. You already know the perfect vehicle, Real Estate, far better than most brokers. You just need to tweak what you are doing to find the right high-value clients to get the ball rolling."
Clarity of thought and certainty of mission have a way of revealing the wrong path, even when that wrong path seems to be working.
In less than 10 minutes, I cancelled the order and refunded the customer's money ("So sorry, the product is unavailable"), I locked the webstore to stop any more potential sales, deleted the apps, verified there were no other orders, then deleted the webstore. I went over to Facebook, stopped the ad, and deleted my account. I ignored the email from Shopify apologizing for their customer support snafu. I am SO done with eCommerce retail sales.
Many others love Shopify, but eCommerce of selling overpriced junk jewelry to poor people violates my ethical standards and self-respect. I probably spent less than $50 to learn a valuable lesson about my character and what motivates me.
My high-value clients won't invest in my real estate deals until they are comfortable investing in me. High-value clients are word-of-mouth referrals. An accredited investor knows other accredited investors. That's "pull" marketing.
I must re-focus on finding great deals, getting the deal under contract, then showing it to my few accredited investors who will bring in their friends to help finance the deal. The best part is that I am paid to find great deals, and the investors get back all of their investment plus profit (mostly tax-free), and it's backed by solid real estate. Now, THAT is offering real value that matches perceived value.
What the hell was I thinking when I tried eCommerce? I want high-profit per transaction with low volume, not low-profit per transaction with high volume. Just one real estate deal per month could earn $50,000+ net to me each month, plus monthly passive cash flow for years, plus back-end profit split of resale or refinance. No sales tax bullspit on real estate deals; just income tax, which I already pay, and there are some nice tax shelters for real estate.
"If you're going to be thinking anyway, then think big." -- Donald Trump, Real Estate Entrepreneur
I am glad that I did my own research with e-books and YouTube, instead of buying into that $2500 "eCommerce coaching crap." Everything he was offering to teach is available at low-cost or no-cost, when you're willing to spend some time researching for yourself.
Shiny object syndrome almost cost me dearly. That is, it almost cost me my self-respect.
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