Drop Ship Lifestyle Stories: Bing
My journey in drop shipping didn’t begin when I came across an ad about drop ship lifestyle. I was already doing drop shipping since 2012. The only caveat is, I was working for someone who was doing this. Where the profits went directly into the company’s pockets. Where I was paid a salary and a couple of points off of gross sales.
My foundation in drop shipping begins with working for this company for over three years. While my position focused on B2B sales and relationships with companies, it followed the same fundamentals as Drop Ship Lifestyle. You won’t find any kind of retail or online arbitrage here.
Just like the DSL model, we forged relationships with key suppliers whom we work with on a day to day basis. Only when we secure an order from the customer and get paid do we dispatch an order from our suppliers’ warehouse. We have a good working relationship with our suppliers due to the sheer amount of volume and business that we give them. That means that we’re able to buy items at the lowest tiered pricing available and in effect, put more money into the company’s pockets. (an average margin for a deal would be 37%, but it’s fairly common to see 60 and upwards of 70%; I once was able to close a $114k deal at 40%).
However, there were two major differences:
1) Variances in price: because the business catered mainly to B2B customers. We’d be selling items anywhere from $1-$5,000+. For a B2B model doing a large volume of transactions this is fine since the average order size would end up being $300-$500 range.
2) No MAP enforced: This is the reason why many DSL businesses are thriving today. I can’t tell you the number of deals I’ve both won and lost by undercutting and being undercut by the competition. Also, working for a company has it’s restrictions. Sure, while I can dictate how much or how little I can let go of an item for, I had to be accountable for each of the sales. For a company of our size, keeping margins at 30% and more would mean that we’d be able to keep the lights open.
(A MAP price is a minimum amount that resellers agree not to advertise below. For example, if a backpack company sets a MAP price of $50 for its best selling item then all resellers are obligated to advertise at $50 or more. This includes brick and mortar stores and Amazon resellers.)
Things Shifted In Japan
In February of 2016, my family and I went on a holiday trip to Japan. It was my first time in Japan after fantasizing about going there since I was a kid. Let me tell you, Japan did not disappoint. I fell in love with the culture, food and the quirkiness of everything in it. I left Japan with a mission to go back and live there someday.
I was drumming up ideas on how I would be able to make this dream a reality during our flight back to Vancouver. I brainstormed some ideas. From private labeling dietary supplements to becoming an English teacher. However, after putting some thought into these ideas, none of them seemed to resonate with me.
I fondly remember coming across Johnny FD’s blog and reading up on how he got his foot into drop shipping. I was frantically going over his income reports month over month. My eyes grew wider as I witnessed his online business grow continually larger.
Why I Invested In Drop Ship Lifestyle
I decided to initially buy the Drop Ship Lifestyle Labs Mini Course to satisfy my curiosity. I wanted to see how Anton’s program was structured before plunking down a significant investment. After watching 1 or 2 modules of the mini course, I was convinced that Anton’s model works.
The course addressed the two issues I had with drop shipping for someone else. First, working with suppliers who enforce MAP pricing. Because no one wants to compete and be undercut solely on price. Secondly, finding a product to sell between $200 and above. These two factors and Anton’s explanation of the “why’s” convinced me to purchase the full course. I must admit, that was probably the most expensive investment I have ever made. But, I believe that investing in yourself is always the right choice.
I purchased the full course on February 23, 2016. By April I had my niche chosen, the sample store built up, and was about ready to start calling suppliers. Soon after calling suppliers, I quickly learned that my niche was complex. The niche I chose was regulated by the US Government. Being Canadian meant that I was a foreign company exporting products in this particular niche. Even though I was planning to sell and distribute exclusively in the USA. Learning about this set me back for the next couple of weeks.
Thankfully I got myself out of this slump some time in June. I was able to brainstorm a new niche and start laying the groundwork for my current store. On September 1st I was able to go live with ads. I wish I can say that everything was smooth sailing from there on but I ran into several roadblocks along the way.
- Three weeks into launching my very first store, I was notified that my Shopify Payments account was deactivated. Because my niche was considered high risk. Every transaction that went through Shopify Payments (which was pretty much everything at that point) was held for 45 days.
- While looking for an alternative solution, I had turned on PayPal Express Checkout. Which worked great until I attempted to withdraw the money. I then received an email from PayPal stating that the funds cannot be withdrawn and that my funds were being held for 180 days.
- The hold was finally lifted after providing some paperwork and business went on as usual. I immediately withdrew everything I had from PayPal to prevent this from happening again.
From this point forward, I’m happy to say that things went smooth. Despite the store being closed for a total of two and a half weeks I was able to reach the coveted $100k milestone within 87 days.
The next steps
While some people are in it to build a bunch of stores to flip or quickly multiply their income, I tend to think about the long term. So my focus is on optimizing my store to convert buyers at a faster pace. With the store just being just 4 months old, I believe there is a lot more I can do to significantly increase revenue.
Some steps I’m taking are:
- Optimizing product descriptions
- Optimizing SEO
- Churning out blog posts
- Reaching out to influencers
- Opening up the gates to affiliate marketing
- Enhancing my knowledge in digital marketing
After all, it’s much easier to focus on what’s already working and optimize it than building something new.
You can follow my journey on my blog.