Anyone do drop-shipping/ecommerce? (19)
I've been getting into it for the past few months - currently have 2 ecommerce stores up, launched recently so I'm still getting my feet wet with it. Was wondering if any of you have been successful with drop-shipping/ecommerce.
If so, what were the biggest factors responsible for your niche's success and what was your gameplan to build up your traffic? Were you able to scale it across several niches and build up multiple streams of passive income? And what do you look for before entering an ecommerce niche?
Here are two guys that I've been studying:
- http://dropshiplifestyle.com
- http://ecommercefuel.com
I never understand why people get obsessed about drop shipping - it's functionally just a logistics thing where you don't stock inventory.
If you want to run an e-commerce biz, make sure you have the margins to pay for customers. If you can take care of that everything else will fall into place.
I used to do drop shipping years ago, bought for 60$ in china, and sold for 150-200$ on ebay USA 
It was great until everyone started doing it.
Nickycakes had a really good interview lately with a guy that went from AM to eCommerce. Give that interview a listen.
Originally Posted by ari_
The reason has to do with cash flow, working capital and float. If drop shipping is done properly, it is almost impossible to have negative working capital (net of advertising costs) since your DSOs (Days Sales Outstanding) and (Accounts Receivable) will be equal to or less than 0.
If you run your own e-commerce business, just having positive margins is not enough. There are countless profitable companies that go bankrupt every day in the world because they run on a negative float.
This is probably one of the most important lessons in business: Profitability is not the same thing as liquidity.
cmdeal - I agree 100%. The Amazon Plum card has been in a Godsend in that regard - automatic net 60 whenever you need it.
The nice thing about doing online is that if you process cards then your cash flow is generally net 1-3 depending on your merchant processor, and your accounts payable are generally net 30-60 depending on how hard you can squeeze your vendors.
My point was rather in overall TAC = a lot of the "e-commerce gurus" basically advocate SEO as the strategy, and my point was that if you can't pay to acquire traffic it's gonna be a rough ride and a tough exit.
Originally Posted by ari_
Here are some guys who are absolutely crushing it and they're not trained affiliates, their gameplan is hardcore branding + viral/high-quality content as part of their organic strategy:
- http://www.ecommercefuel.com/20-mill...-justin-winter
- http://www.ecommercefuel.com/success...-eric-bandholz
- http://www.ecommercefuel.com/finding...ce-jon-beekman
Originally Posted by ari_
On your second point, I agree. I would be surprised if you can use SEO as the sole strategy (indeed for anything these days), especially if you are just starting out and if you are seeking to scale such a business.
http://www.thefastlaneforum.com/comm...my-life.51097/
Great read of a guy doing ecommerce trough ebay for a while, he actually had to stop and find a job for a few years, than he started again and took his business to the next level. Great read with good tips.
1 golden tip: If you look for dropshippers, don't use companies who advertise as dropshippers because everyone and their mom are using them. Search for companies who don't have the dropshipping model or haven't heard of it, you will end up being almost the only one who is selling the item online (no competition) and the margins can be great...
just read the thread where he explains this in detail...gold
Originally Posted by marcovandaar
I just had my first sale on one of my stores yesterday, his part about "retail arbitrage" as a drop-shipper is spot-on, and if you think about it, really not much different than what we're doing as affiliates. Still a middleman who makes it happen by knowing the marketing piece of it really well.
Originally Posted by adsurfer
I guess my thought process was hey, someone mentioned ecommercefuel. The only thing I know about ecommercefuel (the website), is he sold his primary website which was a trolling motor dropshipping site completely dependent on google organic traffic. You said you're new to ecommerce, and as one who has been around the block with Google more then once, I just didn't want you to start a business which has enough headaches, only being dependent on big google. If they advocate other methods, and you use them, then God Bless and I sincerely hope you make tons of money with it.
Thanks man... yeah, that guy Andrew Youderian does a 100% SEO approach with his ecommerce business.
No, definitely good advice from you - I'm sure the SEO game was a lot easier a few years ago. I'm also doing PLAs (Google Shopping, Amazon, etc) to drive traffic and also planning to take a stab at Youtube.
I'm still very much a rookie though, so just speaking from someone who's still a student. My long-term goal is to master Facebook affiliate marketing, make $ with that hopefully, and then eventually leverage that to scale my ecommerce projects. Baby steps...
Originally Posted by cmdeal
I am in the process of using my AM revs to fund multiple ecomm businesses. We have a great fulfillment center we are working with and I would say 50% of products are drop shipped and 50% we own and fulfill ourselves thru the fulfillment house. Personally - I love the business model because it gives us two things.
1. Brand Equity & an Asset if built correctly
2. Singular focus with long term rewards.
Personally - I like the hybrid model of drop shipping and ecommerce. Meaning testing products/niches for low cost w/ drop shipping & proving the niche/product. If it works then you can easily source a similar product and build a brand around it. This way you have limited cash outlay and you don't invest into inventory/logistics until you have a proven product/niche.
I actually just finished setting up a dropship website last month. SEO is my main traffic, but with SEO it takes time until you start seeing results. Plus my niche is different, kind of hard getting merchant accounts.
If you want to do dropshipping, go with products that are ranged from $100-$500. You'll make profit.
I had 2 ecommerce sites for several years. Both sites provided different learning experiences. All my traffic was organic. Anytime I tried advertising, I couldn't convert. Since I was selling clothing and jewelry, it was difficult to differentiate from other competitors. For me, it's one of the downsides to dropshipping. You can't easily create competitive advantages when you don't own the product. Sure, you can differentiate through your ability to serve customers, but it's a bit challenging if you're selling commodity-driven products where people are shopping price.
With one site I was a dropshipper for women's bras. It wasn't as glamorous as it looks. I learned this product had margins too slim and interestingly, most the audience where either women in need of plus sizes or transgenders.
My other site was for men's titanium rings. It worked well for several years until my rankings tanked. I've never gotten the site to recover from the penalties, but it was generating $2k profit monthly (as a side project).
What I learned most about drop shipping is you really depend on vendors and not all vendors are alike. As your relationship goes with your vendors so it will go with your customers. Just because a vendor offers drop shipping doesn't mean they're very good at what they do. Also, you have to watch for vendors that want to play both sides. They want to drop ship for you but they also sell direct to customers so if you're promoting brands and someone leaves your site and searches for that brand you're losing sales.
With my jewelry site I used 3 vendors and each one had different return policies so I had to create my own universal policy so that was another thing learned.
Finally, I found the adding live chat to my sites was the biggest impact on conversions (sales).
Overall, my experience with ecommerce was worthwhile and helped during a time when I was searching for new ways to make money online.
I'll share my experience on what worked for me in drop shipping:
-On page SEO. You must use proper titles, product names that people are searching for. I have a plugin where client can ask a question about a product and it gets posted adding to content on what people actually search for.
I did only on page seo and no other black hat tactics.
-user friendly interface. My website is responsive and works on phones, tablets and desktops. I see stats as 40% desktop, 30% mobile, 30% tablet. So you must take advantage of that. Most of my competitors still have 2000's versions of their site. Another thing is you can buy a product in 3 clicks, no need to register etc.
-fraud. Learn to deal with it, there are clear red flags to spot it - different shipping address, bouncing emails, fax instead of a phone number. Gotta love PayPal for that, best payment system for that. "confirmed address" in a paypal email means no need to worry.
-vendors and customers. Treat them well and you will receive great discounts and good reviews.
Old thread is Old. But, since it was bumped... Ecommerce is my specialty. Yes dropshipping works. No, a business built on SEO will not work.
But, but, SEO is in your user name, fishinSEO. Yes it is and I speak at major ecommerce conferences around the World on SEO as it pertains to ecommerce. But with that said, SEO should never be the sole focus of your business.
Ecommerce is different from affiliate marketing. Dont follow anyone who claims to be a guru or blogs about ecommerce in the same manner as affiliate bloggers. Instead, follow IRCE and Internet Retailer. Ecommerce is a real tangible business.
Diversity is key. There are so many avenues of marketing for ecoms, and you have to exploit everyone. SEO is very beneficial and I have clients that do 7-8 figures a years in organic revenue. On the downside, I have removed manual penalties for some Internet Retail Top 500 companies and every one of them had lost 7 figures in revenue by the time they contacted me.
Traffic for ecommerce:
SEO
PPC
Shop and Compare
Marketplaces
Email Marketing
Paid Social Amplification
Daily Deals
Affiliates
Retargeting
Media Buys
With those handful of sources, there are almost infinite relevant placements for advertising.
About Dropshipping
1st, most people who want to do dropshipping do so because they dont have money to buy product. If you dont have money to buy product, you dont have money to have a real business. How are you going to market stuff? Dropshipping should only be used in the beginning to see what sells and what doesnt. You can buy in bulk for much cheaper and get better margins in return. With Amazon FBA, you dont even have to have storage space anymore.
The good companies do not advertise dropshipping. You have to Google people who sell the product you want to sell and actually contact them. Sounds simple, but it isnt. Most of you will never take the initiative and contact these people.
Any questions?
Well, that is an awesome reply with great content! I guess I never dug dipper into PPC, Marketplaces. I tried those, but just burned through most of the money, not even 1 "Add to cart" lead. What PPC can you suggest?
I agree on contacting companies about drop shipping! That's how I got all of my suppliers and best rates.
In regards to "bulk, cheaper pricing", I only get 10% cheaper deals, since all products that I sell are manufactured in USA and it doesn't make any sense to buy those particular products in bulk. I actually noticed that no one in my industry does, only huge warehouses that specialize in wholesale buy in bulk. Anything that can be made in China makes sense to buy in Bulk I agree.
Thanks for insights!
I do have an ecommerce business that does drop-shipping but it's so slow and I'm looking to diversify. That andrew guy from eCommerce fuel is doing so well with his business. Wouldn't be surprised if he's making 100K a year revenue.
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