Drop shipping – Have you ever heard of the word drop shipping? Well, if you haven’t, this article is going to teach you everything you need to know about drop shipping; how you can you start raking in thousands of dollars using this idea. I have briefly discussed about drop shipping in some of my articles, but with this article I want to expatiate (go deep) on the topic.
What Is Drop shipping?
Drop shipping is the process of listing products on marketplaces like Amazon, eBay or your custom online stores (like Shopify) without having the goods in stock (you don’t have the product at all). Whenever somebody orders for the product and pays into your account, then you’ll go to either Aliexpress or alibaba and place an order for that product using the person’s address. This means Aliexpress or Alibaba will ship the product directly to the person even without you seeing it.
I’m going to explain this in two ways. Firstly, how you can drop ship on Amazon and eBay. Secondly, how you can drop ship using Shopify.
Step-by-step guide on how you can drop ship with Amazon and eBay
A lot of merchants on Amazon and eBay are drop shippers. As a drop shipper, you’ll take your time to look for products that are on high demand or products that people would like to buy – you can do this by doing a little research using Amazon or eBay. After getting a product that is on high demand, the next move will be to look for the supplier of that product.
How to look for suppliers – drop shipping
You can do this by looking for that product on Aliexpress. In case you don’t already know, Aliexpress is an online marketplace where you can find virtually any kind of product. The company is based in China. There are a lot of suppliers of various kinds of products in China making use of this platform on a regular daily basis. You can find virtually anything on this marketplace. And the cool thing here is that the products are always very cheap due to the high competition in the marketplace. For example, some products that cost $30 on Amazon or eBay are likely to cost $15 or less on Aliexpress. Let’s look for the supplier of this product:
Let’s head over to www.aliexpress.com and type the exact title of the product in the search bar. You’ll get tons of results. Now, keep looking until you find that exact product or something similar. Found it you yet?
Found something similar! Now, this is the supplier of a similar product (view image below).
Also, notice the price difference? It’s lower than half of the price of what’s on Amazon. Now that you’ve found the supplier of a similar product, your next move will be to create a store on Amazon or eBay and list the product there (You can list the product on both platforms).
Note: In most cases you’re likely to find the exact supplier of a particular product.
Creating a store on Amazon or eBay is absolutely free – anybody can sign up and become a partaker. So, create account on both platform and list the product. The good thing about this method is that you don’t need to hustle for traffic. The traffic is already there. All you have to do is to make sure that you list your products in a way that it will attract your potential buyers. For example, use clear and attractive pictures and write all necessary details. Also, you should know by now that these platforms are very competitive, so you can reduce the price of your product a little bit in order to attract potential buyers. For example, if other merchants or drop shippers list their products for $30, list yours $25 – that way you’re likely to attract more potential buyers.
After successfully creating your store and listing some products, the next thing you need to do is to make sure that your bank account is synched with your profile. After that, the next thing will be to wait for buyers to come. Remember, in every business, you have to be patient. So, don’t be in a hurry – give it some time and you’ll see, buyers will start trooping in. Remember the saying, “Rome was not built in a day.”
What should I do when customers place orders?
Now, when buyers start placing orders, what you’ll do is this; when somebody places an order, the money will be deposited into your account. Go over to Aliexpress and place an order for that product using the person’s address. This means Aliexpress will ship the product straightaway to that person.
One shortcoming of Aliexpress is that their delivery time is slow if you’re using free shipment. If you’re relying on free shipment, in most cases the product might take up to 1 month to be delivered. Hence, do not rely on free shipping. There are premium shipping services available such as ePacket. For example, if you’re shipping to America, the best service to use is ePacket. With ePacket, Aliexpress will have the product delivered to your buyer within the period of 2 weeks or less. Then in return you’ll pay extra $1 or $2 (which is not a big deal).
Remember I earlier said that you should reduce the price of your product in order to attract more potential buyers. Now, it’s either you reduce the price of your products and add a shipping fee of $2, or you sell the same price as other merchants (drop shippers) and pay the shipping fee with your money. Either way, you have nothing to lose. If you wish to use the second method, remember to indicate that shipping is free, but if you’re using the first one, put a shipping fee tag of $2 to your products.
Like I said earlier, once you place the order using the person’s address (make sure you use e-Packet), the product will be shipped to the person’s exact location. Note: A tracking number will be sent to you, make sure you send it to the person (buyer) via email; that way he/she can track the product without bugging you.
A quick analysis
Now let’s assume that the product cost is $1 on Aliexpress – you can find a lot of cool products with such price tag there, even the ones that cost $0.55, $0.90, $0.70 etc. For example, this necklace costs $0.90 – we can possible sell it for $14 or $15 on Amazon and eBay.
Let’s assume that we list it for $14 on Amazon and eBay and we won’t be charging money for shipping. That means we’re going to minus shipping money from our gain. Our gain for every sale should be $13, but since we’ll be paying the shipping fee with our money, it would be $11 (every sale). This means we’d be gaining $11 for every sale we make. Imagine making up 100 sales within a week. 100 x $11 = that’s $1100 in a week. If you list like 5 products on both Amazon and eBay, you’re likely to make hundreds of sales in a week, which will equate to thousands of dollars.
What to do when the money start coming in
Now your hard work will start paying off. Don’t get too comfortable and start spending your money unnecessarily. This is the part where you need to diversify – invest your money and make more money.
The major shortcoming of Amazon and eBay is that you cannot control your traffic, also, the competition is very high. Hence, I’m going to show you how you can tap the gold mine of Drop shipping massively through Shopify. Using this method, you can easily target a particular audience through Facebook and Instagram.
Drop shipping with Shopify
Shopify is an online platform where you can create a professional store and list products for sale. Before creating our Shopify store, the first thing we must do is to pick a niche. I suppose you know what a niche is.
Picking a niche is very important because it will help us to target a particular set of people (audience), which will make it easier for them to convert. Let’s pick CAT niche for example – this means everything we’ll be selling on our store will be cat related. Now let’s go ahead and create our online Shopify store. We can do this by going to www.shopify.com and signing up. We’ll call our store something like – “The CAT store.”
You can look for some tutorials on YouTube that will give you some guideline on how to create a professional online Shopify store. After creating our store, we’ll start listing products. Remember, since our niche is CAT, we’ll be targeting only cat lovers, hence, every product that we will be listing on our store must be cat related.
Listing products on our Shopify store – drop shipping
Now before we start listing products on our store, we will do some research using eBay, Amazon or Facebook. For example, if you type “cat T-shirts” on Facebook, you’ll find tons of pages with links to some shopify stores selling cat T-shirts and other cat related stuff.
In order for you to know if people are interested in the product (i.e. if people are actually buying the products or not), take your time to read some comments (reviews). If you see a lot of positive comments that means people are interested in the product(s), which also means they’re buying it.
Now we’ve got a product that is selling, our next step will be to go ahead and look for similar product on Aliexpress, then list it on our store and promote it with Instagram and Facebook. There is a plugin called Oberlo on Shopify – this makes things a lot easier. What Oberlo does is that it gives us the ability to import products from Aliexpress directly to our Shopify store. This means we won’t go through the stress of uploading pictures and writing details about our products. With Oberlo, it’s just a click and you’ll have any product imported to your store right away.
How to import products from Aliexpress to Shopify using Oberlo
Firstly, let’s install Oberlo. Do that following the simple steps below:
- Go to www.apps.shopify.com/oberlo
- Next step, click on GET (Note: You must be logged into your store)
- Oberlo will ask for permission to manage your orders, products, and other data, accept and click INSTALL APP.
Now that you’ve installed the Oberlo plugin to your shopify store, whenever you hover your cursor over a product on Aliexpress, a small icon will appear just like in the image below.
That icon is Oberlo icon. If you click on it and select the import option, it will automatically import the product to your Shopify store.
Now we’ll look for that exact product or something similar and import it to our shopify.
After importing the product to our store, we’ll take our time to remove some unnecessary details, such as the name of the store we imported the product from or anything that is related to the store. Also, we’ll change the price to whichever price we wish to sell it. For example, if the product cost is $2 on Aliexpress (where we imported it from), we can sell the product $15. This means we’ll change the price to $15 dollars.
Now, we have our professional looking store with a good product ready for sale. The next thing we need to start making money is traffic.
How to promote your Shopify store on Instagram – drop shipping
Without traffic there will be no buyers; it’s just like having a car without gas. Now let’s look for some traffic. Let’s go over to www.instagram.com and in the search bar, we’ll type “CAT” or “CAT LOVERS” since we’re targeting cat lovers. We’ll be shown plenty of results – a lot of pages that are made up of cat lovers. Some of these pages have millions of followers, others, thousands…
Now what we’re going to do is to pick one of the pages – as a starter, pick a page with a couple of thousands of followers – like 900,000 or 700,000. Our next move will be to DM (direct message) the admin of that page. It’s going to be something like this:
Hello Jake. My name is Molly. It’s really a good job you’re doing with the page – (the title), keep it up. I’m happy to let you know that I’m a big fan.
I’ve been wanting to ask, what does it take to make a shout out? I have some really cool cat T-shirts on my store up for sale.
Thanks for your time.
This is just a sample; you should be able to come up with something better.
We’d get a reply with a price tag – it could be $100, $150 or even $50; it all depends on the individual. In most cases, the size of the followers is also one of the major factors that will determine how much price tag you’re likely to get. For example, a page with 1 million followers will charge higher than a page with 500,000. Whatever the price may be, if you’re not ok with it, bid it to the price you can afford. If he/she doesn’t accept the price, try another person.
Now after agreeing on the price, we’d pay him and send him the link to our store with some really cool pictures of the T-shirt on our store (assuming the product we’re selling T-shirt). What he’d do is this; he would upload the picture of the T-shirt on the home page of the page and add a link to our store. Since this group is made up of 900,000 people who are cat lovers, 20 out of every 150 viewers are likely to buy the product (because the T-shirt has a cat image on it).
The outcome of this
After that is done, you’ll start getting visitors to your store, which means you’ll start receiving orders. Remember that you synched your bank account to your Shopify store – this means that whenever somebody places an order, the money will be deposited into your account. Just like I explained in the first method, when you receive an order, go to the store you imported that product from (on Aliexpress) and place an order for that product using the person’s address. The product will be shipped out to the person without you going through any stress. Remember to always send your buyers tracking numbers (if available).
Make sure you use a premium shipping service, else, you might have a problem with late delivery. Just like I explained above, if you’re selling to somebody in the U.S. make sure you use e-Packet. That way, the product will be delivered to your buyer within the period of 2 weeks or less. But if you use free shipping, the product might take up to a month to be delivered (which is not good for business). The shipping fee for e-Packet service is around $1 to $2. Charge a shipping fee if you have to. Even if you don’t, you have nothing to lose, because either way you’ll still make plenty of gain.
A quick analysis
Now let’s assume that the product you imported costs $4 on Aliexpress. On your Shopify store, you list it for $16. This means that you’ll be making $12 from every sale. But if you’re not charging shipping fee, you’ll be making $10 instead (because you’ll use $2 for shipping).
Let’s assume you’re able to make 200 sales every week (which will be very easy to achieve using both Instagram and Facebook). $10 x 200 = $2000 (every week). $2000 x 4 = $8000 (every month). Now, let’s say you might be spending up to $1500 on instagram and Facebook advert every month (this could be lesser). That would be $8000 – $1500 = $6500 (every month).
Remember, you can create as many stores as you like. Just don’t create more than you can handle. So, you can create like 3 stores with 3 different niches (that is if you want to do this as a full time job).
Now imagine listing products on 3 different stores (with different niches) and promoting them using both instagram and Facebook; what the outcome would be like. With 3 stores you should be able to make close to a thousand sales every month.
Hire a virtual assistance
Now that you’ve started making sales, this means you need a customer service. You can hire one from www.freelancer.com or Upwork. The work of this guy would be to handle any complaints from any of your customers and also to be managing product orders and other necessary data. Note: You must not give him/her full access to your dashboard. With your virtual assistance, your only job will be to make research, look for new audience to target and look for trending or cool products that people would like to buy.
If you wouldn’t like to hire a freelancer, you can hire somebody from around your area (offline) and pay him/her a couple of bucks a month.
Utilizing the power of Facebook Ads
Of all social media platforms, Facebook Ads still remains the best because it gives you the ability to target your audience from any location. Since this method is all about targeting, Facebook Ads is the best Ad platform to use. Note: You have to learn how to use it, else, you might not be able to get the best out of it.
Using Facebook Ads, you can target, for example, cat lovers who live in New York. This means your Ads will be shown to only cat lovers who live in New York.
This is $1m idea. Although, it’s not new to some of us. The good thing about this idea is that not too many people out there know about it, and the few who know are either too scared or lazy to act on. Seriously, you have nothing to lose here. You’re not investing thousands of dollars, you can even start with just $100 and when you starting getting positive result, you invest more.
The only money you’ll need is for Ad; money to pay some Instagram influencers to make a shout out to your store. Finally, I don’t see this idea going extinct. The earlier you act on it, the better for you.
If you wish to use the second method, always make a research on Instagram before picking a niche – make sure there is a reasonable amount of the audience on Instagram in whichever niche you intend to go for.