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The Affiliate Marketer's Guide To Shopify & E-Commerce (24)


02-04-2017 02:21 PM #1 STM Member Blogs (Member)
The Affiliate Marketer's Guide To Shopify & E-Commerce

THE AFFILIATE MARKETER'S GUIDE TO Shopify & E-COMMERCE


[Reposted from CharlesNgo.com with blog owner's permission.]

There’s been a lot of talk about Shopify E-commerce in the affiliate world over the past year.

You may have heard snippets about how people are crushing e-commerce.

It’s true. As an affiliate marketer, you wanna make sure that you’re on top of trends. If you hop on the trends too slow, then you’re only making it harder on yourself.

I first heard about Shopify + E-commerce in late 2015.

I was running a lot of campaigns on Facebook and kept hearing that a ton of affiliates were doing Shopify.

It didn’t make sense to me at first.

I didn’t see how the margins would work since it’s a physical product, and I didn’t think people had the patience to wait weeks for their orders to come in from China (Amazon prime has ruined us).

On top of that, I like to keep my campaigns simple. Adding in customer service and merchants seemed like a huge pain.

But my team decided to give it a go. I’ve learned that the risk vs reward ratio is always high when launching new campaigns.

And we were able to hit a 4-figure profit per day campaign after only a few days.

Since then, e-commerce has been a large part of our campaign portfolio and it’s here to stay.

There are a lot of opportunities in 2017, but e-commerce is going to be a big one.

It’s a great option for those of you who are jaded with some of the problems with traditional CPA campaigns.

It’s white-hat, and you can build an asset through an email list.

Here’s what I’m going to cover in this post:

  1. Why E-commerce?
  2. An Example: Tactical Flashlights
  3. Ecommerce vs CPA Affiliate Marketing
  4. The Platforms We Use
  5. Pros and Cons of E-commerce
  6. Tips To Make More Money From Your Shopify Store


Why Shopify E-commerce?

Dropshipping / ecommerce is one of the oldest business models in the book.

The first major profits I made were from dropshipping items from Alibaba onto eBay.

What’s changed, and why has it become such a massive hit recently?

It’s a combination of things.

Facebook

Facebook has really stepped up their targeting game the past year.

With much better targeting and advanced pixels, it allows us to profit easier off niche products.

Shopify

It’s super easy to start a store selling any type of product you want with Shopify.

There are alternatives to Shopify, but I always prefer to go for the biggest and the best when it comes to software/services. Plus Shopify has a ton of benefits that other competitors don’t have.

Shopify is affordable to get started, plus Facebook loves Shopify stores.

AliExpress

AliExpress makes it super easy to drop ship products. You don’t have to translate websites & worry about getting ripped off by Chinese gangsters.

Nearly all of the big companies on Aliexpress have live chat with English speakers plus other people leave reviews on companies.

Here’s a quick product analysis that shows why e-commerce has become so big.

Flashlight Ecommerce Example

Flashlights were the biggest item in 2015 / 2016 by far. I don’t know why flashlights, but someone came up with a great angle and thousands of people copied it.

Flashlight offers are all over Facebook ads so I’ll use them as an example.

Product: Tactical flashlight

Sale price: $29 each (including shipping)

Here’s a picture of a flashlight in a drop shipping store I found.



Here’s the kicker:

Check out this screenshot from AliExpress…


On AliExpress.com and you can buy the exact same torch for $4.69 including shipping.

It gets drop shipped from China to anywhere in the world.

There are thousands of different types of flashlights you can buy on AliExpress.

Here’s another similar one for even cheaper:


Let’s look at the math:

Cost of goods: $4.69

Sale price: $29

Revenue: $24.31

This means you can spend anywhere up to $24.31 to bring in a new customer. Most of the profit in ecommerce is made from repeat sales, or multiple purchases.

Don’t forget that Shopify isn’t free, plus you’ve got other costs, but there’s a big margin here to play with.

I did a quick Amazon search, and people are selling similar models there as well.

I’m not exactly a flashlight connoisseur, but this looks pretty familiar…


Here’s the link to the flashlight I found:Amazon link

This is why e-commerce is becoming so massive.

The items you can buy from China are so cheap, and the profit margins are insane.

I know what you’re thinking.

Abandon the CPA ships – throw everything into Shopify e-commerce!

I want to give you guys an unbiased view of both business models.

Here are my thoughts on e-commerce vs CPA.

Shopify E-commerce vs CPA Affiliate Marketing


I don’t think e-commerce is as different from CPA as most people make it out to be. I think of them more as “cousins.”

But I’m sure you wanna focus on one or the other. Here are my thoughts on the differences:

In CPA marketing the profit margins are a lot higher because we’re selling digital offers or going for leads. It’s not unusual for guys to make 100 – 300% ROI in CPA.

In e-commerce with Shopify we’re selling real products, and we have a lot of “real world” costs, so e-commerce margins aren’t as high.

If you get 30-50% ROI in your ecommerce store you are doing well and pushing good volume.

ROI is just one metric though – there’s a lot of money to be made with both business models.

Also, e-commerce campaigns can be difficult to scale because it’s Facebook – you’ve gotta be careful.

CPA is fast money, but it can disappear just as fast. E-commerce is slower, more predictable, long-term money.

The Ecommerce Platforms We Use


Just like CPA marketing, you need software and tools to make ecommerce work.

There are 3 main platforms we use.

Platform #1: Shopify

Shopify is the platform most e-commerce sellers are using to build their store on (they have 275,000+ store owners).

Shopify makes it easy to add new listings, customize the style and look of your store, and add different functionality.

There are a ton of Shopify apps that I use in my stores to boost ROI, but I’m gonna write about that later this month.

The Shopify backend is easy to use and gives you all the data you need. You can see how much you’ve made, trends, manage inventory (if you decide to stock inventory in the future) etc.

Here are a few examples of Shopify stores:

https://www.deathwishcoffee.com/

https://www.trunkster.co/

https://ballandbuck.com/


You can customize your Shopify store to look however you want.

The stores above all look like legitimate brands and retailers.

This is one of the good things about e-commerce: options.

  1. You can start to build a brand and loyal customers, or
  2. You can operate on a more CPA basis where you go for the hard sell and try to make all of your money on the front end.


I like to go with something in the middle – a legit branded site, but I also use a lot of affiliate skillsets (scarcity, urgency, calling out the user, hard-hitting copywriting etc.)

Want to Try Ecommerce? Get a Discount on Shopify


One of the Shopify reps got in touch with me at AWA and said he wants to offer you guys an insider deal.

(Shout out to Adam from Shopify, thanks bro!)

The deal is:



The catch is, they told us not to make the coupon code public.

Here’s the link to grab the disount (I’ll email it to you).

Shopify Discount Link

Platform #2: AliExpress


This is where we get our items from.

Why AliExpress?

Because you can order single items, and they ship anywhere in the world for you.

AliBaba.com has cheaper inventory, but you can only buy in bulk from most stores on their platform.

Here’s my system for using AliExpress:

  1. All of the shipping details of people who purchase get logged into a spreadsheet
  2. At the end of each day, this sheet gets sent to the AliExpress store to fulfil
  3. The drop shipping store sends the products to the people who ordered through my store


AliExpress makes it easy to systemize your stores. This is one of the mistakes a lot of Shopify store owners make – they try to do everything manually.

Hint: Checkout the app Oberlo

Platform #3: Facebook


This is where we get customers from.

Why Facebook?

Because we’re selling niche products – we need the targeting ability of Facebook.

Some affiliates are promoting on other traffic sources, but I don’t see the point.

Imagine you’ve got an ecom store selling military gear.

Who are you going to advertise to?

  1. Males who like the group U.S. Army on Facebook (that has 4.5 million members)?
  2. Or random people on native affiliate campaigns / mobile campaigns?


It’s like shooting fish in a barrel using Facebook.

You find a group of people who you can target, find a product you think they’d like, then target them with Facebook ads.

There are a ton of tools for affiliate marketing out there that might help you as well (domains, hosting, spying etc.)

Continued below...


02-04-2017 02:21 PM #2 STM Member Blogs (Member)

Pros of E-commerce w/ Shopify + Facebook


There are good and bad sides to every business model.

E-commerce has a lot of potential, but I wanna show you both sides of the coin.

It’s 100% Whitehat

Facebook knows that this business model is becoming popular, and they love it. When you target someone with an ad that’s about a product that suits them, that’s the perfect win/win.



Warning: Just because it’s whitehat doesn’t mean you can’t get banned.

The business model is safe, but you’ve gotta be careful with the way you use Facebook. I’ve written about how to prevent Facebook account bans before so study up on that.

Here’s how you could still get your account banned:

1. You could promote your products in a way that’s not encouraged.

For example if you’re using an unauthorized image, or you promote in a way that offends people. Read up on the Facebook ToS to make sure you’re not making any blatant mistakes.

2. You could trigger their algorithms and cause an automatic suspension.

This happens when you do things that Facebook thinks someone shady would do, like double your daily budget every day for a week.

There are TONS of Products to Run

You’re not limited to the offers in your affiliate network.

There are over 3.1 million items in the Health and Beauty category alone on AliExpress.

This is still the early stages of Facebook/Shopify ecommerce and there are a lot of opportunities.

Think about the supplier in China – if you can sell a lot of products, they will do anything they can to keep you happy.

They’ll do discounts, expedite your orders, makeup custom products etc.

You’re Building an Asset

This means you can sell your business one day for a multiple of income. This is a big difference from the CPA world.

There are stores for sale on sites like Flippa.com that affiliates have built, spent a few months working on, and then selling them to people who just want a steady income stream.

There are a LOT of people out there who want an online business, but they don’t know how to build one.

This is one way to make a lot of cash in a short time with e-commerce.

You’re Learning How To Build a “Real” Business

This is a good thing depending on your goals.

When you first start out with affiliate marketing, all you care about is your Voluum profits.

Affiliates never really get what it’s like to work with customer support, inventory, suppliers, accounting and finance, shipping etc.

The reality is that most big businesses have all of these components.

You can make a lot of money fast as a CPA marketer, but often guys who do really well as affiliates want to go onto something bigger and more traditional.

Cons of E-Commerce w/ Shopify + Facebook


Scaling is Harder

When you try to scale on Facebook, there are a lot more things you have to watch out for.



It’s not as simple as increasing your bids. If you shift to another country, remember to localize your marketing.

You NEED to Build a Team

You’re gonna be dealing with customers, shipping, suppliers, Facebook, Shopify etc. This takes a lot of manpower.

You’ll be able to launch your first store by yourself, but when the orders start increasing, you’ll need help. There are a lot of powerful apps that I’ll show you that can help you automate processes, but you’ll still need to start building a team.

It’s Very Facebook Dependent

This business model won’t work without Facebook. I know some affiliates have tried on other platforms, but Facebook is the perfect place for e-commerce.

Facebook is going anywhere, but it’s something to keep in mind.

I used to run some dating stuff on Facebook a few years back and that got banned overnight.

So it’s not the possibility of Facebook disappearing, it’s the possibility that they might change their terms of service.

My Best 4 Tips for Making Money with Ecommerce


E-commerce is a good opportunity right now.

That doesn’t mean it’s easy.

You’ve still got to be a good marketer and come up with unique businesses strategies.

Here are my top 3 tips for building a profitable e=commerce store.

Email Marketing

You’re building an email list of people.

It’s free money every time you email them.

There are apps I’ll show you in the future that automate 99% of your email marketing strategy.

The email list you are building is full of super hot leads. People who buy from your store will likely buy again. You can pitch them different products and offers over and over again.

Use Apps to Increase Your Conversion Rates

Affiliate marketers use “scripts” to boost the conversion rate of their landing pages.

E-commerce affiliates use apps.

There are Shopify Apps for every feature you could want on your site.

Apps will squeeze extra ROI from your store and automate and systemize your business. Without the right apps, you will struggle to get your store profitable.

I’ll talk about the best Shopify apps in a blog post soon.

Understand Your True Costs

CPA marketing costs are pretty simple.

Total revenue – ad spend = Profit.

There are a few affiliate marketing tools and software that you have to factor in, but it’s not a big cost.

With E-commerce there are more numbers to calculate:
  1. Cost of goods sold
  2. Shipping costs
  3. Shopify store overhead
  4. Your marketing team, customer service, project manager
  5. Ad spend
  6. And much more


For example this month John spends:

$2000 on Facebook ads
$500 on Product costs + Shipping

$2500 Revenue

He’s excited because he broke even.

However, he forgot to account for all the extra fees and actually lost money that month.

The Shopify platform, the apps, refunds, development, email list building software etc. all add up.

You need to keep a close eye on the “invisible” numbers with e-commerce.

Decrease Your Shipping Times

One problem with drop shipping an item from China is it can take weeks for the person to get it.

If they wait too long then they might request a refund or even charge back. If they leave negative comments on your ads/pages it can turn off other customers.

One workaround is to ship it from a USA location using a 3rd party.

  1. Find a working product
  2. Order inventory from China -> A 3rd party fulfilment center
  3. The customer will get the item much faster since it’ll be sent from a US location.


But keep in mind your profit margins will be smaller because it’s an added cost.

E-commerce is Going To Be Huge in 2017


I’m excited about the future of e-commerce.

My team are scouting for trends and opportunities so it’ll be interesting to see what they can come up with.

There’s also a next level to this business model.

Once you dominate a niche, why not work with a manufacturer to develop a custom product?

Why not develop a brand and a full-fledged funnel?

No, affiliate marketing isn’t dead.

Affiliates are still doing 5-figures a day.

But it’s nice to have options to be creative and build a more traditional business that uses affiliate skills.

Do you wanna see more ecommerce stuff on my blog?

If you want more content like this then comment/share this post for me so I know what you guys think.

I’m a data driven guy, so I can only tell if a post is good by comments/shares!


02-04-2017 04:41 PM #3 matuloo (Legendary Moderator)

Wow, this is a monster


02-04-2017 06:37 PM #4 pekadis (Moderator)

There's a lot of good stuff in this post, so I'll add some tips from my experience growing an e-commerce business.

1. Get each of your products in your office. Use it, see what's included (and what isn't), assemble it (if needed). Nothing beats hands on experience with a product.

2. Look at all the questions people can ask about the product and answer these questions. Use each question and answer on your site as part of a knowledge base, as a blog post, info page etc. This will get you traffic beyond facebook.

3. Put the most frequently asked questions about the use of the product and send these out automatically when a customer buys a product. I use Magento and use an extention for that, so it's automated. Might be one for Shopify too, if not, there's probably a work around via Mailchimp by creating an auto responder.

4. Keep track of returns percentages. High percentages can mess up your cash flow, customer satisfaction rates and just generally keep you very busy.
Drop products and suppliers that are a hassle as quickly as possible.

5. Negotiate with your suppliers for the best possible deal. And once you have that and have some traction, re-negotiate. Looking back at the prices and deals I have now, compared to just 2 years back, I should have been more aggressive.
A good deal will allow you to make a profit where others can't.
It's all about volume for most manufacturers, so try to get that up as quickly as possible

6. As soon as you have some volume, see if it would make sense to hold some stock yourself. Suppliers love to move bulk, so it could make sense for some products to increase your profit margins and cut down on shipping times.

7. Limit your range until you have some decent volume and knowledge about the product and market. Don't spread yourself too thin in the beginning.

8. Have alternative suppliers at all time. Work with more than one. You don;t want to be in a position where your doing nicely and they have a problem in production, not enough stock, or whatever and have nothing to sell for weeks or months. Have a plan B for your supply.

OK, hope this helps. Gotta get back to work now. Let me know if you want more about specific topics.


02-04-2017 08:54 PM #5 cmdeal (Veteran Member)

Quote Originally Posted by pekadis View Post
There's a lot of good stuff in this post, so I'll add some tips from my experience growing an e-commerce business.

1. Get each of your products in your office. Use it, see what's included (and what isn't), assemble it (if needed). Nothing beats hands on experience with a product.

2. Look at all the questions people can ask about the product and answer these questions. Use each question and answer on your site as part of a knowledge base, as a blog post, info page etc. This will get you traffic beyond facebook.

3. Put the most frequently asked questions about the use of the product and send these out automatically when a customer buys a product. I use Magento and use an extention for that, so it's automated. Might be one for Shopify too, if not, there's probably a work around via Mailchimp by creating an auto responder.

4. Keep track of returns percentages. High percentages can mess up your cash flow, customer satisfaction rates and just generally keep you very busy.
Drop products and suppliers that are a hassle as quickly as possible.

5. Negotiate with your suppliers for the best possible deal. And once you have that and have some traction, re-negotiate. Looking back at the prices and deals I have now, compared to just 2 years back, I should have been more aggressive.
A good deal will allow you to make a profit where others can't.
It's all about volume for most manufacturers, so try to get that up as quickly as possible

6. As soon as you have some volume, see if it would make sense to hold some stock yourself. Suppliers love to move bulk, so it could make sense for some products to increase your profit margins and cut down on shipping times.

7. Limit your range until you have some decent volume and knowledge about the product and market. Don't spread yourself too thin in the beginning.

8. Have alternative suppliers at all time. Work with more than one. You don;t want to be in a position where your doing nicely and they have a problem in production, not enough stock, or whatever and have nothing to sell for weeks or months. Have a plan B for your supply.

OK, hope this helps. Gotta get back to work now. Let me know if you want more about specific topics.
Good stuff ... can you tell us more about your experiences? A case study would be awesome!


02-05-2017 07:37 AM #6 manu_adefy (Veteran Member)

Quote Originally Posted by pekadis View Post
There's a lot of good stuff in this post, so I'll add some tips from my experience growing an e-commerce business.

1. Get each of your products in your office. Use it, see what's included (and what isn't), assemble it (if needed). Nothing beats hands on experience with a product.

2. Look at all the questions people can ask about the product and answer these questions. Use each question and answer on your site as part of a knowledge base, as a blog post, info page etc. This will get you traffic beyond facebook.

3. Put the most frequently asked questions about the use of the product and send these out automatically when a customer buys a product. I use Magento and use an extention for that, so it's automated. Might be one for Shopify too, if not, there's probably a work around via Mailchimp by creating an auto responder.

4. Keep track of returns percentages. High percentages can mess up your cash flow, customer satisfaction rates and just generally keep you very busy.
Drop products and suppliers that are a hassle as quickly as possible.

5. Negotiate with your suppliers for the best possible deal. And once you have that and have some traction, re-negotiate. Looking back at the prices and deals I have now, compared to just 2 years back, I should have been more aggressive.
A good deal will allow you to make a profit where others can't.
It's all about volume for most manufacturers, so try to get that up as quickly as possible

6. As soon as you have some volume, see if it would make sense to hold some stock yourself. Suppliers love to move bulk, so it could make sense for some products to increase your profit margins and cut down on shipping times.

7. Limit your range until you have some decent volume and knowledge about the product and market. Don't spread yourself too thin in the beginning.

8. Have alternative suppliers at all time. Work with more than one. You don;t want to be in a position where your doing nicely and they have a problem in production, not enough stock, or whatever and have nothing to sell for weeks or months. Have a plan B for your supply.

OK, hope this helps. Gotta get back to work now. Let me know if you want more about specific topics.
Oh wow, that's some great info! What about customer support as compared to regular ol' CPA marketing? I thought that will always be a complex challenge for ecommerce.


02-05-2017 07:44 AM #7 iAmAttila (Veteran Member)

Nice post, let it be known you can get banned for ecommerce just as easily as any other. All it takes is an ad too aggressive, an ad that people think is a rip off (masses know its on ebay or ali for 4.99 and you sell it for 19.95) and they report it, bam, suspended no questions asked.

Sure its safer, but it's also 10x more work than typical affiliate offers.

Think customer service, think maintaining a healthy balance in case your paypal funds are frozen for 20 days or more, think managing logistics, think returns, think ordering stock, then by the time it arrives so you can fulfill faster, the item gets saturated thanks to all the rip n runners out there, and you are now left with stock you can't sell.

So yes, ecom is awesome, shiny new unicorn syndrome but there's just so many moving parts, I personally do not advocate it until you know what you are doing and can run it like a real business.


02-05-2017 08:31 AM #8 pekadis (Moderator)

I agree with Atilla that you should run your ecommerce business like a real business.

But that's the whole point right? If you're looking to ecommerce, you're looking at it as something that last longer than a 6 week campaign.
If you don't want that, don't do ecommerce or stick to FBA via Amazon with Chinese products arbitrage, as in the article. But arbitrage never lasts very long in a competitive market.

But everything you want to own yourself, you have to work on it yourself.

What do I mean with that:

- want quick results (potentially), find a popular product, buy in China, sell on Amazon. This can go fast, you use FBA, so all you do is pack, ship and answer some questions. But Amazon owns the customers, dictates shipping and payment terms. Removes your listing if they want. Or when you're too succesful, brings out the same product under the Amazon brand or contacts your suppliers directly.
- Only use facebook for traffic? They own the traffic, so if you don't play by their rules, you're out.

The above ways are great - don't get me wrong. But ideally, you build on the success you get there. So you build a brand, a destination site, your own product line, your customer base.

So yes, more moving parts, but once in place, it's not that hard. A business that has diversified in terms of the vendors they use, products they sell, markets and marketplaces they sell in has a fairly predictable outcome.

As a business owner, you have to make sure the procedures / workflows /processes are in place that guarantee these outcomes. These processes can be automated, outsourced or delegated so you can free up time to work on the business and do what you're good at.

This last part can be hard in the sense that you have to be very structured in your approach to the business.

Anyway, I'll try to address some processes in a few posts, starting with customer service, as this was requested by @manu-adefy


02-06-2017 12:45 AM #9 c0nquer (Member)

Solid post!

Are you guys using Shopify payments, Paypal, Or both? Which do you recommend?


02-06-2017 05:44 AM #10 dean foster (AMC Alumnus)

Great timing. I'm just starting to look for products so I'll be interested in see the followup to this post. Thanks for posting.
Dean


02-06-2017 06:19 AM #11 dean foster (AMC Alumnus)

I see a lot of people talking about using FREE plus shipping method for obtaining sales. Anyone have any experience with such? Doesn't seam like there would be much margin in there to pay for advertising unless your monetizing the back end with email marketing or doing well with upsells or downsells.


02-06-2017 07:08 PM #12 pekadis (Moderator)

OK, so here we go: customer service.

Before we go into the details of how to handle this, customer service it not just a hassle.

It gives you:
- ideas about what you should be selling also (I was looking for X, but can't find it. Do you carry it?)
- where you can improve (same question gets asked over and over)
- ideas for content (only answer a question once and put it in an FAQ)
- competitor info (hey, I saw this product priced at X with competitor Y, what can you do?)

So it's a vital part of the company. This is for another post, but it's important so I do want to mention it here.

Now, for customer service there are 3 parts. Pre sales (product info), Ordering and shipping, post sales (how do I?)

What's important tot realise is that the driver for a lot of customer service is fear. Will it work, will it be shipped, do I really get what I ordered?

Everything the customer might fear, is a hurdle. And it's your job to move those hurdles out of the way as much as possible.

The more you can do that, the less "customer service" you have to do. At least, in the sense that most people perceive customer service: wasting time on people calling / emailing with endless questions and complaints.


So presales, answer questions like:
- What's in the box
- How do you use it
- What's the warranty
- Which accessories do you need, if any
- How long will it take to ship and what's the procedure
- How does it compare to competing products
- What do other customers think of it (reviews)


During the sales /ordering / shipping process:
- How can they pay
- what is the tracking number
- auto mail manual after purchase, as well as any other relevant information, such as links to installation information

Post sales:
- have material ready in PDF, such as manuals (either to be sent by e-mail or to be downloaded from the site)
- have videos or links to videos that show the product is installed / used
- have a database with commonly asked question about use and installation

Those are the most important elements. Now for the practical side, here's what I use:

1. A youtube chanel with pre sales info (unboxing etc) and after sales info (how to install, program etc).
Big bonuses:
- people will trust you more, as they perceive you as an expert
- people will like you more and buy from you just for making the video (not everyone of course, but I have had a good number of sales from people quoting that as the reason for buying)

2. Click desk as a chat channel on the site (clickdesk.com) about $25 per month
Despite almost never having anyone live on the chat, a lot of messages are left. Surely pisses some people of, but that's offset by a large factor in people who contact us that otherwise wouldn't have.

3. Auto responder after every sale with specific information about the use and installation on a product ($199 plugin called magento follow up mail by Aheadworks)
Also asks for a review after a few days, so it's a very small automated follow up campaign.
You won't believe how many thank-you mails you get when you implement this - plus less need for active support

4. Use canned replies that are quickly trigger - phraseexpander.com - $149 pro license each for 4 people
If there's one product we use a lot, it's this.
I built a database with common answers, segments for sales quotes, you name it.
A lot of e-mails have a common theme or question, so a lot of info can be reused. This program alone will save you hours per week (and not just for customer service)
Highly recommended


5. Have tracking numbers sent out automatically by the vendor or whoever ships the product.
Most questions about the purchase are: When will I get it? With a tracking link sent by e-mail, they can figure it out themselves and get mailed when there's an exception


As for the fear for the amount of work for customer service, the volume of work will depend on the way you work and what you implement.

What do I mean:

Dropshipping via Aliexpress -> pretty sure you'll have to answer a lot of questions about arrival dates. That's because you can't always give them a firm date of delivery, don't know exactly when it ships and who will deliver it.
If shipping is under your own control, or you have a supplier with a good system, you can inform your customers with more details, which will lead to less questions.

It's all a trade off and how you want to set up your business.

As I mentioned in a previous post, you can always automate, outsource, delegate. Find out what works for you.

This is what works for us, hope you find it useful.


02-08-2017 05:35 PM #13 pekadis (Moderator)

OK, let's talk numbers.

This is the juicy stuff right? Because why would you try something new if you don't know what to expect.

Some background first to put all of it in perspective.
- I am playing a long game, building up a brand and solid company
- Products sold are premium products from well known brands in my industry
- We sell products for which the e-commerce market was non-existent until I started it.

Turnover (excluding sales tax / VAT):
2012 (started in august) - 39K
2013 - 149 K
2014 - 298 K
2015 - 480 K (added 1 employee around July)
2016 - 797 K (added a second employee in Jan)

So what are the biggest cost:
- cost of goods sold - 575
- salaries - 70 K
- shipping cost - 30 K
- sales related expense (not advertising, but domain names, hosting, saas) - 14K
- other misc expenses - 24K

So results in a gross profit of about 80K, which is basically my income as far as the tax office is concerned.

Only pay myself 2k a month, so the profit can be used to further grow the company.
In case you are wondering...my wife works too and I ride my bicycle to work (wife uses the car). We have a family of 4 (2 kids)

Now for the business, I did an appraisal through a business that specialises in selling companies and they use the following formula:
Gross profit -/- reasonable salary for owner (50 K) times a factor - in my case about 7 because of the grwoth rate.

This would give me a value of 210.000 now (80-50)*7

With the same cost structure and a 40 % growth rate, this will be 1.4 *80 -/- 50 = 62 * 7 = 434 K as the value of the company.

So there you go.
Some idea of what you could be building.

Compare that with your own numbers to see whether it would make sense for you to follow a similar path.

Hope you like the info.


02-13-2017 10:55 AM #14 caurmen (Administrator)

Those tips on customer service are GREAT.

I couldn't agree more about it not being just a hassle. The feedback you get is incredibly valuable.


02-15-2017 01:10 PM #15 evy123 (AMC Alumnus)

Wow Everything in this post is solid gold! Thanks.


02-15-2017 01:49 PM #16 cmdeal (Veteran Member)

Quote Originally Posted by pekadis View Post
OK, let's talk numbers.

This is the juicy stuff right? Because why would you try something new if you don't know what to expect.

Some background first to put all of it in perspective.
- I am playing a long game, building up a brand and solid company
- Products sold are premium products from well known brands in my industry
- We sell products for which the e-commerce market was non-existent until I started it.

Turnover (excluding sales tax / VAT):
2012 (started in august) - 39K
2013 - 149 K
2014 - 298 K
2015 - 480 K (added 1 employee around July)
2016 - 797 K (added a second employee in Jan)

So what are the biggest cost:
- cost of goods sold - 575
- salaries - 70 K
- shipping cost - 30 K
- sales related expense (not advertising, but domain names, hosting, saas) - 14K
- other misc expenses - 24K

So results in a gross profit of about 80K, which is basically my income as far as the tax office is concerned.

Only pay myself 2k a month, so the profit can be used to further grow the company.
In case you are wondering...my wife works too and I ride my bicycle to work (wife uses the car). We have a family of 4 (2 kids)

Now for the business, I did an appraisal through a business that specialises in selling companies and they use the following formula:
Gross profit -/- reasonable salary for owner (50 K) times a factor - in my case about 7 because of the grwoth rate.

This would give me a value of 210.000 now (80-50)*7

With the same cost structure and a 40 % growth rate, this will be 1.4 *80 -/- 50 = 62 * 7 = 434 K as the value of the company.

So there you go.
Some idea of what you could be building.

Compare that with your own numbers to see whether it would make sense for you to follow a similar path.

Hope you like the info.
Great stuff!


02-16-2017 07:10 AM #17 manu_adefy (Veteran Member)

Regarding customer support, a book that really hits the nail on the head about customer support being more than putting out fires: https://www.amazon.com/Delivering-Ha...dp/0446576220/

For those that don't know, Zappos was bought by Amazon, who based on reputation and personal experience has AMAZING customer support; yet Zappos is miles ahead of Amazon too.

It's described as a company culture book, because that has more appeal, but the biggest point about it is how that culture translates to amazing customer support. Time to reverse engineer Zappos


02-16-2017 10:51 AM #18 cbrughmans (Member)

Hi Pekadis, amazing feedback and input you are giving here.
What is holding you back to scale way harder and bigger? You seem to have all the aspects of an e-commerce business perfectly under control. Is it traffic you are missing to scale to multi-million dollar revenues a year? Or is it something else? Just curious why you are not making 10,000,000 a year - there's other webshops out there that dont have this level of control and that make high-7 numbers a year.

Quote Originally Posted by pekadis View Post
OK, let's talk numbers.

This is the juicy stuff right? Because why would you try something new if you don't know what to expect.

Some background first to put all of it in perspective.
- I am playing a long game, building up a brand and solid company
- Products sold are premium products from well known brands in my industry
- We sell products for which the e-commerce market was non-existent until I started it.

Turnover (excluding sales tax / VAT):
2012 (started in august) - 39K
2013 - 149 K
2014 - 298 K
2015 - 480 K (added 1 employee around July)
2016 - 797 K (added a second employee in Jan)

So what are the biggest cost:
- cost of goods sold - 575
- salaries - 70 K
- shipping cost - 30 K
- sales related expense (not advertising, but domain names, hosting, saas) - 14K
- other misc expenses - 24K

So results in a gross profit of about 80K, which is basically my income as far as the tax office is concerned.

Only pay myself 2k a month, so the profit can be used to further grow the company.
In case you are wondering...my wife works too and I ride my bicycle to work (wife uses the car). We have a family of 4 (2 kids)

Now for the business, I did an appraisal through a business that specialises in selling companies and they use the following formula:
Gross profit -/- reasonable salary for owner (50 K) times a factor - in my case about 7 because of the grwoth rate.

This would give me a value of 210.000 now (80-50)*7

With the same cost structure and a 40 % growth rate, this will be 1.4 *80 -/- 50 = 62 * 7 = 434 K as the value of the company.

So there you go.
Some idea of what you could be building.

Compare that with your own numbers to see whether it would make sense for you to follow a similar path.

Hope you like the info.


02-16-2017 05:57 PM #19 pekadis (Moderator)

@cbrughmans Fair point!

I'll be perfectly honest - I am the biggest bottleneck.

Why?

You start out on your own and build things up.

So you can do everything, know everything, but also are juggling with too many things:
Website issues, stock levels, finances, logistics etc.

And yes, growing the business at the same time.

So you need to build a team, delegate and move forward.

I have spread myself too thin and have not been ruthless enough in creating a support structure through outsourcing, delegation and automation.

Working hard on that now so that there are standard operating procedures in the first place. Not the most fun work, but a necessity if any of the 3 options above can be used.

It's hard sometimes, as I like the business development side more than anything else. But it has to be done.

I'll share the lessons learned here.

In any case, thank you for your comment!


03-07-2017 12:32 PM #20 buck johnson (Member)

Quote Originally Posted by STM Member Blogs View Post
Pros of E-commerce w/ Shopify + Facebook


There are good and bad sides to every business model.

E-commerce has a lot of potential, but I wanna show you both sides of the coin.

It’s 100% Whitehat

Facebook knows that this business model is becoming popular, and they love it. When you target someone with an ad that’s about a product that suits them, that’s the perfect win/win.

  • Facebook loves that the user is getting a good experience
  • The consumer loves it because they are getting shown things they are interested in
  • The affiliate loves it because they get paid


Warning: Just because it’s whitehat doesn’t mean you can’t get banned.

The business model is safe, but you’ve gotta be careful with the way you use Facebook. I’ve written about how to prevent Facebook account bans before so study up on that.

Here’s how you could still get your account banned:

1. You could promote your products in a way that’s not encouraged.

For example if you’re using an unauthorized image, or you promote in a way that offends people. Read up on the Facebook ToS to make sure you’re not making any blatant mistakes.

2. You could trigger their algorithms and cause an automatic suspension.

This happens when you do things that Facebook thinks someone shady would do, like double your daily budget every day for a week.

There are TONS of Products to Run

You’re not limited to the offers in your affiliate network.

There are over 3.1 million items in the Health and Beauty category alone on AliExpress.

This is still the early stages of Facebook/Shopify ecommerce and there are a lot of opportunities.

Think about the supplier in China – if you can sell a lot of products, they will do anything they can to keep you happy.

They’ll do discounts, expedite your orders, makeup custom products etc.

You’re Building an Asset

This means you can sell your business one day for a multiple of income. This is a big difference from the CPA world.

There are stores for sale on sites like Flippa.com that affiliates have built, spent a few months working on, and then selling them to people who just want a steady income stream.

There are a LOT of people out there who want an online business, but they don’t know how to build one.

This is one way to make a lot of cash in a short time with e-commerce.

You’re Learning How To Build a “Real” Business

This is a good thing depending on your goals.

When you first start out with affiliate marketing, all you care about is your Voluum profits.

Affiliates never really get what it’s like to work with customer support, inventory, suppliers, accounting and finance, shipping etc.

The reality is that most big businesses have all of these components.

You can make a lot of money fast as a CPA marketer, but often guys who do really well as affiliates want to go onto something bigger and more traditional.

Cons of E-Commerce w/ Shopify + Facebook


Scaling is Harder

When you try to scale on Facebook, there are a lot more things you have to watch out for.

  • Your targeting will likely change, which means your ROI will change
  • You need to watch that you don’t scale campaigns too aggressively or else you might get banned


It’s not as simple as increasing your bids. If you shift to another country, remember to localize your marketing.

You NEED to Build a Team

You’re gonna be dealing with customers, shipping, suppliers, Facebook, Shopify etc. This takes a lot of manpower.

You’ll be able to launch your first store by yourself, but when the orders start increasing, you’ll need help. There are a lot of powerful apps that I’ll show you that can help you automate processes, but you’ll still need to start building a team.

It’s Very Facebook Dependent

This business model won’t work without Facebook. I know some affiliates have tried on other platforms, but Facebook is the perfect place for e-commerce.

Facebook is going anywhere, but it’s something to keep in mind.

I used to run some dating stuff on Facebook a few years back and that got banned overnight.

So it’s not the possibility of Facebook disappearing, it’s the possibility that they might change their terms of service.

My Best 4 Tips for Making Money with Ecommerce


E-commerce is a good opportunity right now.

That doesn’t mean it’s easy.

You’ve still got to be a good marketer and come up with unique businesses strategies.

Here are my top 3 tips for building a profitable e=commerce store.

Email Marketing

You’re building an email list of people.

It’s free money every time you email them.

There are apps I’ll show you in the future that automate 99% of your email marketing strategy.

The email list you are building is full of super hot leads. People who buy from your store will likely buy again. You can pitch them different products and offers over and over again.

Use Apps to Increase Your Conversion Rates

Affiliate marketers use “scripts” to boost the conversion rate of their landing pages.

E-commerce affiliates use apps.

There are Shopify Apps for every feature you could want on your site.

Apps will squeeze extra ROI from your store and automate and systemize your business. Without the right apps, you will struggle to get your store profitable.

I’ll talk about the best Shopify apps in a blog post soon.

Understand Your True Costs

CPA marketing costs are pretty simple.

Total revenue – ad spend = Profit.

There are a few affiliate marketing tools and software that you have to factor in, but it’s not a big cost.

With E-commerce there are more numbers to calculate:
  1. Cost of goods sold
  2. Shipping costs
  3. Shopify store overhead
  4. Your marketing team, customer service, project manager
  5. Ad spend
  6. And much more


For example this month John spends:

$2000 on Facebook ads
$500 on Product costs + Shipping

$2500 Revenue

He’s excited because he broke even.

However, he forgot to account for all the extra fees and actually lost money that month.

The Shopify platform, the apps, refunds, development, email list building software etc. all add up.

You need to keep a close eye on the “invisible” numbers with e-commerce.

Decrease Your Shipping Times

One problem with drop shipping an item from China is it can take weeks for the person to get it.

If they wait too long then they might request a refund or even charge back. If they leave negative comments on your ads/pages it can turn off other customers.

One workaround is to ship it from a USA location using a 3rd party.

  1. Find a working product
  2. Order inventory from China -> A 3rd party fulfilment center
  3. The customer will get the item much faster since it’ll be sent from a US location.


But keep in mind your profit margins will be smaller because it’s an added cost.

E-commerce is Going To Be Huge in 2017


I’m excited about the future of e-commerce.

My team are scouting for trends and opportunities so it’ll be interesting to see what they can come up with.

There’s also a next level to this business model.

Once you dominate a niche, why not work with a manufacturer to develop a custom product?

Why not develop a brand and a full-fledged funnel?

No, affiliate marketing isn’t dead.

Affiliates are still doing 5-figures a day.

But it’s nice to have options to be creative and build a more traditional business that uses affiliate skills.

Do you wanna see more ecommerce stuff on my blog?

If you want more content like this then comment/share this post for me so I know what you guys think.

I’m a data driven guy, so I can only tell if a post is good by comments/shares!
Love this thread.


12-11-2017 06:43 AM #21 ianternet (Senior Member)

I just got started myself... 2 things come to mind when we are expanding.. one how are you dealing with international shipping, are you allowing the user to pay the 20$ to ship around the world? you can find so many of the same items on amazon for almost 1$ more and this I believe can help with customer support and refunds and returns? any thoughts on that? drop ship from amazon as a gift? anyone tried?


12-11-2017 09:21 AM #22 caurmen (Administrator)

Usually e-Packet means that shipping's considerably less than $20! Product selection comes into this: don't try to sell things that are too bulky/heavy or your margins will be eaten by shipping.

I don't know anyone personally who's tried dropshipping from Amazon, but I know people have tried the model with some success. There are no tools I'm aware of to enable that so it might be a pain in the ass - however, people have definitely done it at scale so it could work.


12-12-2017 11:12 AM #23 cbrughmans (Member)

Hi guys, i cant find the article where Caurmen explains how to set up postback tracking with a Shopify store. Can someone help out?


12-12-2017 12:01 PM #24 caurmen (Administrator)

It's not out yet, I'm afraid - but I'll be writing it early in the New Year along with some other Shopify customisation / automation stuff.


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