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Frequently Asked Questions
What is dropshipping?
Dropshipping is a buzzword people use for a simple supply chain strategy that’s been used for decades.
It’s just the act of selling products you don’t own and never touch. You ship straight from your supplier to your customer when you receive an order.
While you could take the time to research suppliers and work out special deals, most of us are just ordering from AliExpress (think Chinese Amazon) in the early days.
How much money can I make?
The typical model goes as follows: Identify an audience you want to serve and a product they will be dying to buy. Ideally the product should cost you less than $10 shipped, for you to go on and sell for $29 to $49.
So, typically the profit margin is 80% to 90%.
Here’s an example of a $3 product that can be sold for $30 to $50 with a fancy new website…
Cheap and generic looking on AliExpress, but the 4.5 star average reviews from 819 customers tells me people are loving it.
So how about a little make-over…
Just like that, it’s a whole new watch. (Watch my free video tutorials to see how I build sales pages, step-by-step)
Now with $27 to $47 in profits per sale, you need to make sure your ad spend per sale is less than that. What’s left over is your net profit.
But the shipping times are too long! How can I compete?
ePacket shipping (most AliExpress sellers offer this) takes about 2 to 3 weeks to arrive in the U.S. ePacket is super cheap, if not free, because of certain trade deals between China and the U.S.
DHGate offers many similar products, oftentimes with free DHL shipping (7–10 days).
Is this too long? Can you still compete with Amazon?
The goal is not to compete with Amazon. Your value proposition is usually not “fast shipping”.
Sending tracking info is easy to automate with Ezusy (this will automate orders, too). If customers e-mail with complaints or questions (most won’t), you can respond with a variations of the following:
“Hi! Thanks for reaching out, and thank you for your business. [YOUR BRAND] is currently experiencing unprecedented demand due to X promotion. In an effort to deliver your order as fast as possible, our suppliers have kindly agreed to ship directly to you. We appreciate your understanding, and would like to offer you [GENEROUS COUPON] as a small token of our gratitude.”
It’s rather uncommon to get e-mails like this, but you may as well turn it into an opportunity to bring them back again! Even bragging on ‘direct-from-supplier to keep prices low’ from the very beginning is a winning strategy.
If your strategy relies on repeat orders for previous customers, by all means— start buying up inventory as soon as you can afford it. Then fulfill orders yourself to reduce shipping times.
But most of the time, it just won’t matter.
I can’t find a good product. I’m about to give up. What should I do?
Let me be frank— no matter how much reading you do, you’re not going to have the ‘gut feel’ that drives product decisions.
Not until you take action. Get some experience under your belt. Really internalize the info you are reading.
Most of us never go into our projects with 100% confidence they will work.
We do enough looking around until we have a gut feel, and then we just try it.
See what works, what doesn’t. Have some ‘ah-ha’ moments. Iterate, adjust.
If product/niche selection is ‘holding you back’, you need to be more honest with yourself about why you actually aren’t moving forward (fear of failure, typically).
The best thing you can do for yourself is to build a damn sales page already and start promoting something.