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Last edited 10 months ago

The key to HIGH PROFIT drop shipping This post is outdated

Hi guys, 

Not promoting anything here, just want to share a thought I had about dropshipping and how it's influenced my business decisions moving forward. 

I used to be obsessed with finding any product I could, usually cheap, less than £100 items and drop shipping on ebay, using other retailers as the unknowing dropshippers! I used an app that compared product prices to find the cheapest online. I thought I was a genius!!

I was making money, granted, however every sale I made, I would only be scraping a tiny margin, maybe 10-30%. And I would still have to make the sales to make even that! 

So I thought, what if instead of selling cheap items and making 30% (30% of £100 = £30) why not sell high end items that people still buy online (30% of £1000=£300)! So in each case, I make one sale, both with the exact same margin, but in the latter, I make ten times the profit! From one sale! In other words, I would need to make an extra 9 sales which is more time, more effort and potentially more money spent in advertising. 

It was a no brainer and a real AHAA moment for me! Hope it makes you think about your business if you're dropshipping and helps you make more profit! I have now moved away from ebay because working out the fees constantly was a pain and I chose to find a solid long term supplier and set up on my own store. I do not miss those ebay fees!

Thanks

Check out my store, any feedback welcome and greatly appreciated! myluxurybed.co.uk

Guy

 

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Replies
Dan Member
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10 months ago

Hello Guy,

  I like the approach you're taking with the much higher price points for your products. I keep going back and forth in my head ......should I just find some Chinese dropshippers with cheap products, and just jump in the game like the vast majority of ecommerce sellers out there, or go to the other end of the spectrum? I have found a couple of potential suppliers ( not China ) for a much higher end niche $500-1200 U. S., but I still need to research that niche more ,  

   Are you strictly online sales, or do you have a brick and mortar store?  If you are only online, that would definately encourage me to look much harder at the the niche I'm thinking more and more about.

    Took a quick look at your site, very nice beds. 

     Thanks, Dan.

rito Shopify Partner apps.shopify.com/trust
Posts:
244
10 months ago

Hey Guy,

That’s awesome that you were able to make it work. For others considering taking the same approach, keep in mind that there are pros and cons to doing so. Yes, you can earn more per sale, but in most cases, the costs (Ie. Sales/marketing) of obtaining the sale will increase in-kind. Meaning that if you have difficulties converting sales for lower end products, for most individuals, it’ll be harder to covert sales for higher price points.

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Posts:
23
10 months ago

That's fantastic. I am online only and also working with dropshipping. Most of my products are in the high price point end of town.

I have been operating since May 2016 though have only sold some of the smaller, cheaper items such as lamps, candles and cushions. 

Can I ask how lon g you have been operating and what you do marketing wise as online only?

As with I think most people, traffic is my major issue.

Thanks, 

Danny - domu.com.au

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10 months ago

That's solid strategy, though for peeps like me still starting out (opened my store in November) selling high priced items isn't financially feasable, yet. When a customer buys from you, you don't techincally have that money until Shopify deposits it into your account, so you have to use your own money to buy said product. I defs can't afford that right now. Maybe in the near future.

 

Tim

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10 months ago

hello, interesting, i am looking into drop shipping and finding it frustrating so far. whats this app you used to compare online prices?

cheers

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10 months ago

Traffic is the hardest part of the business, and it's all trial and error. Once you have developed your audience, and tested their response to both spectrums of pricing then its better to expand your direction of higher or lower end items. The key is to have relative content to your audience and build from there. My company does plenty of drop shipping for a large list of different websites. We supply just about any category from Home goods, electronics, apparel, pet supplies, gifts, jewelry, and accessories. We are always looking for good websites to parnter with on our items. Plus shopify makes it easy to integrate into our software for immediate tracking.

edo radzi Member
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10 months ago

Do you provide known brand name items?

edo radzi Member
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3
10 months ago

Do you provide known brand name items?

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10 months ago
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upvotes

First off, thanks for all the replies. And traffic, having this post sent to shopify memebers via email has so far sent over 1000 extra people to my store (its only been 17 hours). Got to be good for SEO ranking right? 

I will try answer all of the above questions.

Traffic is most definetly the hardest part of selling anything online and it is important to have a solid plan in place to bring customers to your store. I have a 9 step marketing plan (I like to see it as an engine, they all help keep everything ticking over). 

1. Affiliate program! Although mine hasn't gone live yet, I believe this will increase sales massively! Affiliate programs are such a great way of advertising your business, while only paying for the advert if you actually make sales! You pay a commission per sale and if you get the right websites advertising your store, things could really start to take off! Keep it targeted, and promote your program to any influencers in your niche yourself! I have reached out to Instagrammers, bloggers and other furniture companies not directly competing wiht me and have got an amazing response, and a lot of websites waiting for my links. I use Paidonresults.co.uk Their service is great and they have helped some high profile websites grow. 

2. Of course PPC advertising. I am just learning the ropes, testing the waters and working out what works and what doesn't. 

3. Social Media. No brainer really

4. Posting to all free directories online! Helps with seo ranking, and could bring new customers to your store. Make sure all information is consistent.

5. Post on forums - like this one

6. PR - Because I donate 10% of the profits to charity, local news is all over it

7. Magazine ads - I advertise in local and national magazines. Country Life, English Home, just a few in my niche, and I know there are magazines out there for every niche! What better way of targeting an ad than to advertise to people already subscribed to a magazine on the topic! 

8. Flyers and leaflets - I print good quality leaflets and post them to the high end more affluent areas around where I live. Good to do when I'm bored and good exercise too! 

9. Email - Not something im very well versed in as yet, but slowly getting to grips with Mailchimp and growing my list. 

It's just trail and error and figuring out which works best. When you find one working better than another, make sure to spend more time and money developing what works to make it work even better! If you find you're getting no results from something, don't waste your time, some things just don't work for some businesses and it's often hard to work out why. 

Paul - the app I used to compare prices was pricespy. Made some nice profit on ebay using it, just be sure to check the links for stock levels, there's nothing worse than making a sale on ebay, going on the cheaper site to fullfil the order and finding it out of stock!

My store is online only, no brick and mortar store. We're looking for other products to start another store too and I find greater profit potential lies with products without a brand! Branded products are easier for customers to compare and find the cheapest online. Of course you can have success selling branded products if you find the right suppliers, but my path has led me to stick with what I know works! I wish everyone the best of luck! 

Guy from myluxurybed.co.uk

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10 months ago

Thanks for all the advice guy...

I am (slowly) doing a lot of the above. The afflliate program I have not looked into though, this is interesting so I think I will do some research. 

We are loosely in the same niche as most of my product is furniture but I am yet to have my first furniture sale, everything so far has been cushions, candles and lamps - the cheaper stuff.

Posting on this topic definitely got me some more traffic yesterday thats for sure :)

Out of curiosity, how do your flyers do? Have you figured out a way to track this traffic? Like a discount code or anything or is that more just awareness.

Thanks again

Danny - domu.com.au

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10 months ago

Thanks for sharing your valuable inputs. It really gives a lot of motivation to move forward. 

Affiliate marketing is something need to know more about it.

Thanks a lot

Shahani

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10 months ago

Thanks for this insight. I dropship as well and I'm trying to approach the market by underselling everyone but it seems like people prefer to buy at higher prices. Strange. Lol 

i used to sell the hover boards when they were still popular but I joined too late. Now I'm doing what I have a passion for but getting the sales are hard. 

Www.meadowandwolf.com

aej Member
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2
10 months ago

Hi,

a question from a newbie.

For dropshipping usually, everybody uses China manufacturers.

These manufacturers ship goods from their China address.

So customers visited and purchased your products in the US, Canadian,European or Australian e-shops receive goods from China.

Are they not surprised?Or confused?

Thanks.

 

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10 months ago

Thanks everyone! I have never and probably will never dropship from china. Delivery takes too long and quality isn't always the best from my experience. I'm sure people have had success doing it but I prefer to get things from the UK. 

Flyers yeah I put a unique discount code on to measure how many responses I get from each area. 

 

aej Member
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10 months ago

But is it a right decision to take from UK?

The China is the main source of goods,I think...

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10 months ago

Hi Guy, I'm new to shopify and learning about dropshipping. If you are taking from UK, do you get it from those manufacturers without an online presence? Just trying to understand what is the best way to search for the dropshipper if they are locals and won't they be your competitors (thus affecting the margins)? 

I kinda agree with aej that China seems to be the main source of goods, just depending how to carefully selecting the quality suppliers vs the subpar. 

Heng from www.yolohas.com.au

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10 months ago

Hi Heng...

I am in Sydney also and only currently work with Australian manufacturers & wholesalers.

The way I found all my suppliers was going to trade shows and simply asking the questions "do you drop ship" have a conversation and tell my story, what I am trying to achieve etc. Some companies that don't normaly do it have agreed to do it for me.

FInding dropshippers is the easy part - getting traffic is the hard part ;)

Good luck

Danny - www.domu.com.au

Ron Member
Posts:
5
9 months ago

Eliminate this by not using Shopify Pay. Use PayPal, and the $ is yours the same day. This allows easy and rapid reinvestment.

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9 months ago

Hi Guy,

I'm curious. You're drop-shipping, but beds are large, expensive items to ship. Are you buying and dropshipping from Ebay, or drop-shipping from the manufacturer, say, Southeast Asia?

Aren't damage and returns a killer for profit?

 

Thanks,

Bart

 

 

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6 months ago

Danny 

I see your using an Underground Media theme, Where did you get the shopping basket from?

 

Roger

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6 months ago

This is a very interesting idea. Something to think about going forward. I had a look into affiliate marketing but never went forward with it as it ment having to put some money in which I could not afford. Might be worth revisiting again.

Traffic really is the most difficult part, more importantly, relevent traffic. I have tried instagram paid influencers but there was no benefit as I was breaking even or losing out. First I need to work on my website to make it look more professional, it seems basic at present. I have big plans for my business but first need to take some baby steps.

Feel free to check us out at www.rkwatches.com. We welcome constructive feedback. 

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6 months ago

Hi roger, no we use a standard free theme, can't remember the name but the basket came with it

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Last edited 6 months ago

Hello rachid
I love how you created your site on watches, I will be happy to share in private messages ideas to let us know our business
If you want to converse with me here is my email address.
lionel.tmbusiness@gmail.com

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6 months ago

I do wish that there was a way to charge shipping per individual items.

For instance on my store: www.brandedwearclothing.com 

Im doing a free+shipping on one item with 3 different shipping prices (1 item =8.95 ..2 items=11.95..3 items=14.95) 

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6 months ago

Hi Roger, 

I found an app in the store by Cupel Apps, its called "Instant Cart" and you can modify it to change colours etc.

Its a one off fee of $25... Or so I thought. I clicked on it today to get more information for you and it updated the app and changed the look and feel to colours I am not happy with and I cannot make changes now unless I pay another $25 which I am not happy about.

It was fine before, this is a bit disapointing.

I did add it however, as I had a couple of customers say they couldn't find my cart, so its a good idea.

:)

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6 months ago

Hi Guy,

Good post. I visited your store and the first thing that hit me was you sold beds and matresses but no bedding and bedroom decor items. These products could be easily drop shiped from aliexpress and I believe China offers ePacket to the UK so delivery times would be minimal.

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6 months ago

Like some others, I am also trying to explore Dropshipping to make a few bucks. Have been trying shopify for 2 months, need to explore more area to expand product range and also "how".

I do also think of those dropship from China wholesales. But when I think of youngsters who are tech know-how, one look will know the product comes from somewhere which they can get lower price, I doubt they will want to get from my store.

Great to know there are many here who are also new and learning.

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6 months ago
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Hi all,

Just to add to your initial comment.  Having more expensive products is great when they sell.  As some have explained it does cost more to market them so the cost per sale is always more.

It's always nice to have a range of products across a different price range.  Also this is good for upselling.  People like to make the least amounts of transactions as possible.  If you have a luxury bed, the customer will want everything that can go with it.  If they have money to spend, they will.

I saw in a blog (sorry can't find it to link here) about having a range of prices and qualities on similar products.  Eg. Product A is $999, Product B is $1700 and Product C is $3200.  It was basing the fact that most people would quickly look past Product A as there must be something wrong with the quality or just that the quality is surely low.  They would then either jump straight to Product C or make a decision between B and C.  If you only had Products A and B listed you can massively under sold the chance to take a nice profit from a large ticket item.

In another business we have a product that was RRP of $1499.  Once week we for no reason trialled it at $1799 and sold twice as many.  The cost of an item = the customers preseed persetson of quality.  This is of course within limits and needs to fit into a price range for similar products etc.

Our current business model is to have two products that are right as the price point of some other competitors.  We can run these at cost even to gain a customer base (once we have a customer they will re-order continually, hundreds at a time, it's just that sort of product).  We will then introduce some new products that this same customer base will want and are looking for already with a higher profit margin.

We did drop shipping with another business and I personally think it's a hard game.  For me this is the ladder and where you need to be:

Bottom = the consumer
Next step = the retailer/drop shipper
Next step = the wholesaler
Next step = the manufacturer
Top of the ladder = The one that is all of these.  Become the manufacturer and you can decide to sell to whoever you please, which ever works best for you business model.  Selling B2C or 'Top to the bottom' is the best and most rewarding as you own the market space.

We don't own a factory and physically produce products with our own hands but we are the importers and therefore deemed a manufacturer by law/insurance anyhow.

If you are looking buying products from importers remember they are buying them cheaper.  Start inventing your own products or ways to make peoples life easier and produce your own products.

Remember if something was easy, everyone would be doing it.  It takes a lot of hard work, or if you have the money can buy what someone else has started.

If you want to have a look at what we are doing check out our page: www.protectorpack.com (this is up for sale)

Hope some of this info enlightened you.

Jeremy

 

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6 months ago

Guy

thank you so much for sharing your success.. you mentioned your nine step traffic strategy.

Can you go over that more? Is it a funnel or 9 different sources of traffic?

My FB ad results are tragic (using the two F's in traffic as expletives!) so any heads up on traffic is magic!

Thanks again for spending so much time on explaining your strategy.

 

Christine

 

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6 months ago

I gave up on drop shipping for this reason.

Drop shipping to canada takes way to long.  To the US is fine people can expect it in 7-14 days, but with epacket to Canada or mexico you're looking at way over 20 days...and emails from frustrated customers.
Not to mention anything you import over 100.00 value has brokage fees that the customer has to pay.

I went with print on demand...less troubles.

Canada Proud Tees https://www.canadaproudtees.ca
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6 months ago

Guy,

Really intresting post and great to hear of the success you are having. 

We would be intrested in working with you in the U.K if we thought there was some mutual benefit. You can take a look at us here: www.glencraft.luxury -  we are a Luxury mattress manufactuer with a Royal Warrant for supplying Her Majesty The Queen.

You can reach me here: dominic@glencraft.luxury

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6 months ago

The below article is more relevant to home décor and furniture niche but some points are generally applicable to any niche.

We launched our store (discountsland.co.uk) just under 6 months back and although there is lot of work to do, we have been getting some decent sales with average cart value at about £300. We are using all the free bits (theme, apps etc) and use paid apps only if they bring results. We’ve just crossed the 5 figures sales mark on the website and a little more than that selling furniture on marketplaces. I have a fair bit of experience with different platforms (shopify, wix, ekm, wordpress, woo commerce etc) and also in online marketing and we’ve spent about £2.5 k roughly on online marketing (PPC, Paid social, affiliate etc) in this period. All our sale have come from organic, PPC and direct clicks or assisted clicks and sales through social media.

For most stores (one man show, low investment, starting out) with high end and expensive products only 2-3% might be able to survive or sustain for a longer period. You will need a big marketing spend and budget to make any impact and crack the sales. Without a physical store selling expensive furniture is tricky, because even if customer does not visit the actual store they know it’s there which gives them confidence if nothing else. Also the inability to see the actual product is a hindrance in getting sales for this kind of niche. Branded clothing and designer stuff might get away with this obstacle but expensive home décor would generally struggle.

  • Affiliate program: I’ve worked with few affiliate companies as a merchant and also as an affiliate. Paid on results being one of them. We’ve got about 140 affiliates promoting our current store including the likes of market leaders like quidco, topcasback, myvouchercodes to name a few but that hasn’t resulted in any sales whatsoever. We even ran special promotions with quidco and topcashback but again no results. As an idea it does sound appealing and make you think it will work but unless you spend lot of money working with individual affiliates to get top placements on their sites which could run in 100’s of £ you will struggle to get any visibility and clicks. We have under 10 clicks coming daily from all of these affiliates with no sales. As a result I’ve decided to stop the affiliate program. It does not work unless you brand is searched for or you are willing to pay lot of money to gain visibility which in my opinion defeats the purpose as you want it based on results without having to spending marketing budget to give away something for getting a sale. Just doesn’t make sense.
     
  • PPC: This has brought us most sales apart from organic and direct sales. As I said I have good level of experience with PPC  (google, bing, yahoo & lot of other networks) have certification and all sorts but this is something which you have to try, a/b test and see what bring in the maximum results. Most stores here will not have a budget to use 3rd party companies for this sort of things but it’s something worth learning if you want to go the online way.
     
  • Social: You will get clicks from social networks but don’t really expect much in terms of sales. We have done paid marketing, narrowing down the audience to best match our niche and have got loads of clicks and interest but not that many sales. It’s important to have a social presence but as a lone operator it might be too much work doing everything for the store. So initially focus on the network which you think works best for your niche and concentrate your efforts there. Lot of people are talking about instagram but the biggest issue with that is not being able to link your product directly from the photo/video. For items like furniture etc you will not be able to afford giving things away to influencers like you might be able to for fashion/accessories etc. So choose you channel which gives you maximum benefit as opposed to a popular fad.
     
  • Email: Most important marketing tool at your disposal which hands down gives you more conversion at a relatively low cost. It’s a must for any online store and not just sending marketing emails but some level of automation is required to gain the maximum benefit and sales.
     
  • Onsite Optimisation: Very important to have this in place.

As far as I am concerned the most important things to address on your site from customers point of view are:

  1. Trust in your store (reviews, online presence, ranking, links, social media presence etc)
  2. Delivery times and prices
  3. Return policy

Hope it all works out for you guys. Best luck to all.

 

 

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Last edited 6 months ago

Great this worked out for you. From our experience, social proof and trust seals help with conversions...

ranjitkollu Member
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Last edited 6 months ago

Check out our unique idea at www.coolphabets.com. Let us know what you think. Feedback/suggestions are welcome.

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6 months ago

Wahid Latif, Great site and lots of useful information there.

My store is higher end furniture and homewares so your post has not filled me with confidance haha.

But I will persist...

:)

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6 months ago

that is a great idea, I found plenty of resources in China with high quality and top of teh line products, but the problem I am facing is that Shipping takes to long to get to customers. US customers expect to get their item within days from ordering where it takes a minimum 7 to 10 days to be delivered from china and in some cases it took over 35 days. 

any one has find a soution to this shipping delays ?? Advise?

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Last edited 6 months ago

Buying from China will give you a higher profit margin, it's just a matter of finding the top sellers. As for delivery, make use of epacket.. It's usually a lot faster.

I buy from both China and the UK.

Trafic is just my only issue, its giving me headache