Where to Next with Ecommerce? (13)
Hey everyone.
I was running aliexpress dropshipping over the summer and came to the realization that it doesn't seem worth the investment... ie. no long-term asset getting built and it's becoming unsustainable.
I am passionate about ecommerce and am wanting to go down a more sustainable route involving owning my own products.
My question is:
Where do I get started with this? I have seen quite a few people on the forum discussing their own products, but how do you get them manufactured? This is the initial hurdle that is tripping me up.
Any advice would be greatly appreciated!
I don't think dropshipping wouldn't be worth it ... of course the easiest days are over, but with the right products, there is still a lot of opportunity.
But ok, not everyone has to feel the same about it, and the move to sourcing your own products is actually the right step to take at some point 
I just talked to a ecom guy not so long ago, his approach was pretty simple, he talked to large/wholesale sellers on aliexpress, made a deal with them to make branded copies of their products for him and since he ordered VERY large amounts of products, the prices were MUCH lower than the default retail price. Pay attention to the word VERY, in case you're not able to order large quantities, the prices won't be what you are looking for.
Most of those products are really just branded copies, not many ecommers can actually develop their own products, that's very costly.
There are definitely more approaches to this, the one I mentioned doesn't have to be the best either ... so let's see what the more experienced ecom guys have to say ... anyone?
Have you found a niche or direction that you want to move into long-term? The nice part about dropshipping is that you can test lots of different products and niches easily. Conversely, if you are creating your own products then you are going to invest a lot more up front in the design and manufacturing costs - then you could still have a dud. I would delay that risk as long as possible and only invest in a product you are truly passionate about and have a real unique angle on.
Really appreciate the tip Matuloo! It got me thinking of some different options I could look into.
Originally Posted by joshtodd
There's a lot here that can be discussed.
First of all, what is your own product?
To me, it's something that's distinctive in the eyes of the consumer.
In my case, there are a lot of products we resell. Which means, we're a reseller for a different brand. Yet our product is the complete offer, which consists of the physical product, the price, the information and videos we add, plus the service (like after sales, delivery times etc).
This explains why we can sell the exact same product in larger quantities than others.
So this leads to the question of how to differentiate yourself in the market. Plenty of options there on the elements I mentioned that we use.
There's nothing wrong with dropshipping
Dropshipping in itself means your supplier ships something for you to your customer. We do that as well.
What you are talking about is referred to as drop shipping, but really, it isn't just that. It's arbitrage - buying something on the left, then selling it on the right for more.
With Facebook as a medium.
That works because markets aren't perfect in the sense that everybody has the same information.
But these days, markets are very efficient, because a lot of things are visible and can be tracked.
Not by the majority, but by the smart people you're competing with.
The real question is where your strengths are
Maybe you have a lot of money, and can do the bulk buys like @matulo mentioned. Maybe you know a lot about a certain hobby, market or product.
But that's the first dimension.
Now, add something you are good at as well. But on the sales side.
This could be facebook ads, copywriting, or you might be a natural on Youtube.
Doesn't matter, any channel can work.
If you can add more dimensions, it can become more specific, but down narrow down too far. Have a look here for a nice one about Ikegai (even though I wouldn't suggest going that deep for this)
This is all high level stuff, so not loaded with practical examples. And it's all about what you can bring to a market.
However, you can also look at it from the product side.
Like, what sort of business and products do you want:
- Location independent with dropshipping, or working with outsourced logistics or your own stock and more control?
- easy to sell and ship stuff, or a little bit more complicated and less competition?
- High margins and small volume or fat margins and less volume?
- Local suppliers or further away?
Finding an answer to everything above will narrow down the options you want to consider and will be happy with in the long run.
Originally Posted by pekadis
- Location independent with dropshipping, or working with outsourced logistics or your own stock and more control?
- easy to sell and ship stuff, or a little bit more complicated and less competition?
- High margins and small volume or fat margins and less volume?
- Local suppliers or further away?
Finding an answer to everything above will narrow down the options you want to consider and will be happy with in the long run.
Cheers!
That depends on what the product is and what sort of business you want.
So high volume, lower quality or small volume, high quality for example.
Some ideas could be:
- check the trade platforms like zentrada (mainly European suppliers), 1688.com, Alibaba, Asiansources etc.
- visit trade shows (or just check the exhibitor list and figure out who's doing what)
- Google
- if there are any forums for users of a certain product, see if there's something that can be learned there
- talk to people in the industry
It might be hard to figure out, but that's not necessarily a bad thing. Because it will be difficult for others as well Which means you'll be ahead for a long time and the competition will be less, as most people want to make easy money.
I'll give you an example of why this can be good.
I have put together a kit with products that consist of a range of products from different sources, but that all work together to create a DIY solution. Sounds a bit vague, I know.
However, it took me 18 months to put together, because it was all so hard to source (and I am in the industry, so know my way around).
Now, I have shitty section on the site and a few Youtube videos describing what it is and explaining how it all fits together.
Result is on average 5K a month for this.
So I know the potential is a lot bigger, because the people buying are taking hurdles to get it (not the best info, no slick sales page, no funnels, ads, not even great navigation on the site to get there).
They buy because they really want it and we are doing better than everybody else, just because we can say we have a solution.
There is another side to this though, which I am confronted with often and that's not talked about.
Which is that people love to put things in boxes. So a supplier loves to classify you as X, so they can apply the rules of engagement they have for company type X.
If you don't fit their boxes, interactions can come with more friction.
And that's because they have no rules of engagement for deviant companies. Best example of this is manufacturers who are used to retail and are now clueless about this whole internet thing and Ecommerce.
On final note - don't disqualify good potential matches if they can't dropshop. There are excellent 3rd party logistic companies that specialise in fulfillment for ecommerce businesses.
We have gone through the process and it can work well, provided you can give them what they need. But that's for another post, as there's a lot we learned and prepared for.
Hope this gives you some food for thought.
Wow! Pekadis dropping some knowledge bombs - another one for the newsletter!
As was mentioned, dropshipping isn't the problem per se, it's the long delivery times resulting from the typical
(And more and more people have figured out they could order directly from aliexpress, to cut these store owners out of the equation.)
So, if you could figure out how to minimize delivery times, then dropshipping could still be a good option.
If you're wanting to venture from dropshipping, sourcing from Alibaba.com would be another option. Most/all of what you can find on aliexpress, you can probably find here. Many of these are direct manufacturers. You cut out the middlemen. And minimum order quantity can start as low as 1-100 pieces. And you can do testing with
However, if you decide to source the goods yourself, it would mean having to figure out how to store and deliver them to your customers, as well as provide customer service. The simplest way to do this would be to find a fulfillment centre that is in your target country. So you would source the goods and ask them to be delivered to the fulfillment centre, which would then deliver them to your end customers for you (either that or you'd arrange for a delivery company to pick up the orders from the fulfillment centre and make the final deliveries). Some of these would even handle customer calls for you at a cost (or you could just outsource this to a call centre somewhere - even in another country, like India).
This may sound complicated, but the harder something is to set up, the more you'll have an edge over the masses of people that are going the easy way of doing shopify+aliexpress.
Once you can shrink the delivery time from 4-6 weeks to 1-2 days, you can justify charging more, AND you can start building a group of faithful buyers that will buy from you again and again - as you will be selling to them time after time on the back end, via email etc.
You may think it must be so much more expensive to source things yourself - but if you execute this correctly, the finances should work out.
Cost Savings: increased lifetime-value of each customer + savings from ordering directly from the supplier for cheaper + higher selling price justified by short delivery times
Extra Costs: shipping from manufacturer to fulfillment centre + import taxes and fees + fulfillment centre storage and packaging costs + customer service costs + costs of delivering from fulfillment centre to customer
And of course, if you design your sales funnels well (to include upsells, downsells, cross-sells...), that will help immensely in maximizing your profits as well. Don't just send visitors to shopify product pages!
Hope that helps at least a little bit in offering another alternative.
Amy
I'm doing some testing right now with ShineOn customized jewelry. Print on demand is so attractive to me, because you can get all the benefits of dropshipping (low cost to get started mainly), you can speak directly to an audience with both the theme of your store and the individual pieces. Jewelry also has good AOV $50+, and is easy to ship. ShineOn ships within a week throughout the US.
What do you guys think of this approach?
Originally Posted by esoteric
Best of luck and please do update us on how it works out for you!
Amy
Hi, as Pedakis, Matuloo and Vortex have already told you, dropshipping isn’t the problem. The problem is bringing to life the theoretical elements of this ecommerce model. I don’t need to tell you how convenient selling things from your store and having them shipped from the manufacturer is, but I can tell you that a lot of the popular systems nowadays used have a lot of “but”s that practically fill with Xs the CONS column and keep the PROS column of dropshipping almost empty.
And this is where we, as a company, kick in. We are dropshippers and we love doing ecommerce this way, therefore we have put together a system meant to move those Xs to the PROS column, briefly:
-You work with one tab open
-You have 7/15 days shipping which is way better that 20/40 days, always with a tracking code (this detail gets rid of Stripe and Paypal blocking founds and clients that start wondering where the hell their product are, and you can be damn sure that they won't be coming back to your store for a second purchase)
-All the products available are in a catalogue from which you select what you want to push to your store and select the shipping time.
-We have a sourcing division that is able to find literally anything you want that isn’t present in the catalogue.
-We have nothing to do with Aliexpress or similar companies, we have our own factories and partnerships.
-You have a 1:1 relation with your suppliers because you turn to us for everything you need, we are a B2B company, not B2C.
-You get an invoice for all your transactions.
-You manage fulfilment literally with one click, once you get an order (or a bunch or tons of orders), you send it to us and we take it from there. You and your client get the tracking code a few days later.
-You have a dedicated eCom manager that doesn’t only assist you in case you need help with the platform, but that can help you scale up your business by suggesting you products good for your niche and adequate strategies in order to scale up your business. The eCom managers rely on aggregated data in order to give you advice without revealing other clients strategies so that you can be sure you will always have good suggestions but all information about your activity is safe.
-The customer lifetime value is something we pursue because that’s crucial for scaling up so we aim to put you in the condition to give your client the best user experience.
-With this being said, you can really set the bases to scale up your business. For this reason you can also go bulk through us in order to increase your margins and decrease delivery time.
-WE DO BRANDING, on literally anything. Who has met us in Barcellona, NY, Prague, Rome and will see us in Casablanca, Bangkok, Las Vegas etc knows it. From the boxing to the flyers to the product, the sky is the limit.
So either you want to work with a shop or a landing page, we really put you in the condition to just set and bring to life your marketing strategy without waisting time on technical operations. Our motto is “marketing on you, the rest on us” because that is what makes your ecommerce special. You have all the time to build and communicate the WHY of your activity, as you know that that’s what you’re actually selling rather than your products.
You can create your account and speak to our eCom managers for further information if you’re interested. But beyond anything, I want you to know that dropshipping isn’t dead, what’s dead are the online businesses of who don’t understand how to embrace these new technologies and adapt their strategies to the online market trends.
uDroppy's proposition sounds interesting, I've also been meaning to try out a similar service like spocket.co, which only uses suppliers from US & EU.
Most of the success stories I've heard, however, involved test-launching 3-4 products per day to find a winning product so I'm not sure if services like these would have the inventory and the novelty factor in products to be able to do that, compared to a place like taobao.
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