E286: Yes, A Successful Dropshipping Business is STILL Possible in 2019October in Ecom-Crew-Podcast
In the ecommerce realm, opinions on starting a dropshipping business really differ. Some people say it’s dead, others insist that its the only way to go.
Well, dropshipping is still very much around. But as Amazon moved into a position of dominance, its appeal has waned. The fact that some so-called “gurus” who sell dropshipping as an “easy” way to earn millions hasn’t helped either.
However, there are those who own sustainable dropshipping businesses.
Dave Couillard, our resident design expert, is one of them.
I’ve asked Dave to join me in this podcast episode to talk in detail about his website, HardCases.ca. This will also serve as his formal introduction as a business partner on EcomCrew.
Here are some highlights from our discussion:
- Dave’s ecommerce journey: from web design to dropshipping (12:59)
- What a typical day for him is like (19:13)
- Sourcing products and finding suppliers (23:10)
- Running a dropshipping store (44:40)
- Pros & cons of dropshipping (59:37)
I hope our discussion didn’t only prove informative but encouraged you to look at dropshipping businesses in a different, albeit more positive light.
As always, drop any questions you may have in the comment section below. If you enjoyed this episode, please leave us a review on iTunes.
Get a copy of our Amazon domination book and just pay for shipping. Order it here.
Until next time, happy selling!
Full Audio Transcript
Dave: I was really, really sad to see this. Almost, almost sold my Shopify stocks this morning.
Mike: (Laughs) That’s awesome.
Mike: This is Mike and welcome to Episode #286 of the Ecomcrew podcast and hello from Las Vegas, Nevada! Here for a couple of more days before pulling out and heading down towards Southern California for a little bit change of scenery. It’s been awesome hanging out here with old friends. We used to live in Las Vegas. I mentioned this on the podcast earlier and so Las Vegas is a lot different for us than it is for most people, we don’t come here for the gambling and the shows and all that stuff. It’s more about hanging out with friends, although some of those other crazy things do kind of peak in to our time here in Vegas, it seems like, inevitably. But it’s been an awesome time hanging out here and sad to be moving on, but also looking forward to it as well.
Today, I have our third partner in Ecomcrew, the often not talked about Dave Couillard, who is behind the scenes making us look good at every moment and we talk a little bit about that. But along the way, we’re talking about Dropshipping and is Dropshipping dead? I think it’s an interesting take on it because Dave runs a very successful dropshipping company and so, we talk about being able to run a dropshipping business successfully in 2019 and beyond. And we’ve actually done some episodes about is dropshipping dead? And I’m not really a huge fan of dropshipping, at least in the way that people talk about these days.
Mike: This “Get Rich Quick” scheme of dropshipping in these courses that are out there and these Facebook ads that you’re probably all seeing as well that make us marketers look bad. At least the people like Dave and I, Dave, Dave and I, I should say now, that want to provide valuable content and we never sell the dream and we never talk about how easy this stuff is. And so those people really drive me crazy. But there is a lane for dropshipping out there if you do it right. And so that’s what this episode’s about.
And with my promise of not talking too much about the episode, repeating myself, I’ll leave it at that. So let me do talk about one other thing before we get in today’s episode, which is our Amazon domination book. It’s not exactly apples to apples about today’s topic, but we haven’t talked about the book in a long time and I did want to mention it. Ecomcrew.com/book. It’s a free plus shipping offer. So we are going to send you the book for free, we just ask you to cover the costs of shipping and handling. There’s no other gimmicks or anything like that. We’re just trying to get people to consume more of our content. And it’s a very similar model that we’ve done with our e-commerce stores, the things that we’ve talked about a lot on the Ecomcrew podcast. You know, I’m a big fan of free plus shipping offers.
Mike: So the whole idea is to give someone an immense amount of value upfront, have them really enjoy your content and your branding, your product. And then hopefully because of that, they become a bigger customer later. And so just being forthright, that’s exactly our hope here. I mean, obviously we talk about Ecomcrew Premium on the podcasts from time to time. We have our other courses. We’re very rarely ever sales-y about it. As you guys know, we’re probably, if anything, a little bit uncomfortable being the sales guys but you know, so these free plus shipping offers are something I’m more comfortable with because we’re giving stuff away for free. And if you do feel that there’s value there, that’s our favorite way to sell someone something in the future, right? They consume the podcasts, they consume the book, they consume our blog, whatever it is, all for free. And, you know, hopefully you realize that this is our passion. This is the thing that we love doing, that we love helping people, that we love e-commerce, that we’re e-commerce nerds and that you want to be a part of that community. And if not, all the content still there for you for free. We’re gonna be just fine either way, which is a pretty cool position to be in. So anyway, Ecomcrew.com/book. That’s the link to go get Amazon Domination, that’s the book that Dave and I wrote with the help of all the awesome people back in the Philippines office, put that together for us.
It basically talks about how to launch an Amazon product in 2019 and beyond, the white hat way without having to do all these tricks and gimmicks. So how to build a list and test products beforehand and make sure that you’re not going to order the wrong thing and all those cool things. So anyway, go check that out, ecomcrew.com/book. And now on with the show.
Mike: Hey, Dave. Welcome to the Ecomcrew podcast.
Dave: Thank you, Mike!
Mike: Yeah, man so we affectionately refer to you as the other Dave around here because obviously Dave Bryant was here first. But along the way you joined the team. We haven’t talked much about that. And I do wanna talk about that on the podcast because I think it’s a good opportunity. But before we get into that, cause I always have to let people know what we’re gonna be talking about, we’re gonna be talking about your dropshipping business, and you’ve built a rather successful dropshipping business and it’s still very viable even in 2019, 2020 and beyond. And I think that people can learn a lot from this. And the reality is, is that dropshipping is not dead. There’s still tons you can do on dropshipping to be successful. I think what is dead is what got discussed at the Shopify meetup yesterday because it still seems like they’re pushing tons of dropshipping stuff over there.
Dave: Yeah, I felt bad being there because I went there with a client of mine who also owns an e-commerce store. So we thought we were going to be learning about good strategies, how to build a good brand and good customer support. But then there was these talks about how to dropship from Aliexpress or find other sources from China for cheap products that you can ship around. Nothing related to building something stable that you can you know, and that you can live with for 10, 15 years and maybe even resell for a good amount. It all seems like shady businesses that you see on Instagram that are only there for a week or a month. So I was surprised that it was kind of vouched by Shopify. They sent this invite last week and we decided to join, go meet the people there. But I was really, really sad to see this. Almost, almost sold my Shopify stocks this morning.
Mike: (Laughs) That’s awesome. Yeah, I mean it’s– I don’t know. In any industry when you see things that are too good to be true, and this “Get Rich Quick” kind of thing, most likely it is too good to be true. I mean, there is a small window of time where it was too good to be true right. I mean, you look at dropshipping when it first came available, when Shopify first came out and this would have been like 2013 or something or whatever it would’ve been, 2014. Yeah, there was plenty of room to navigate in this dropshipping world and Amazon wasn’t the grill that it is now. And so, yeah, there was an opportunity for a moment in time to kind of get rich quick, if you will. And you know, what ends up happening with that is that some people take advantage of that– take advantage of other people and they’re like they’ll make courses and start promoting the fact that you can do this and they use themselves as a case study. But the reality is they’re probably even doing themselves any longer and it really is not even remotely a viable way to make money, in my opinion in 2019.
Dave: Yeah, yeah, exactly. And this is definitely not something that I’ve done in the last almost 10 years with my dropshipping business. I don’t know. I mean, I never started that business to just make money. I really cared about the product that I was going to be selling on that website. And I really cared about helping my customers, so. And it seems to me that it’s been shown not to work. You know, like there’s tons of gurus out there promoting that type of dropshipping, but there’s also tons of people who’ve tried it and failed. And, are back to work somehow like they’re back to a regular job because they’ve been deceived.
Mike: With some debt, because they probably ran up some bills along the way which is even worse.
Dave: Yeah, for sure.
Mike: Yeah, Cool. So that’s going to be like the foundation for what we’re gonna talk about today. Basically how to build a successful dropshipping site even in 2019 and beyond. But as I mentioned off the top, I mean, you’re now officially an Ecomcrew partner, a part of the team here. And we haven’t had a chance to talk about that on the podcast, so I thought now, if we could just take a couple of minutes, because I don’t want to chew up too much time away from the main topic today. But I also want to kind of introduce everyone to you and make sure that people know that you’re– even though you’re behind the scenes most of the time, it’s really the catalyst for what’s helped Ecomcrew grow and really look above our weight, bat above our weight, because I mean, the graphics and the things that you produce are just second to none. So let’s talk about that journey. I mean, we first met you through e-commerce fuel, which is another great community, which I always recommend, everybody, go check out eCommerceFuel.com. It’s a private community for seven-figure plus sellers. And it’s the same way that I met Dave Bryant. And so it goes to show you just how important masterminds and communities are. Oftentimes the people that you meet are more valuable than any pieces of information that you’ll learn from those communities. And along the way, we started traveling to China together and we just, both Dave and I, realized just how special you are when it comes to graphic design. And next thing you knew, you were doing some stuff kind of part time for us. And now you’re like an official partner.
Dave: Yeah, yeah. Thanks for making this official in this podcast, Mike. I’m really happy. I mean, this is something I’ve been wanting to do for a long time. You know, like either teach online or help other entrepreneurs. I’ve been, I’ve been doing some consulting for years before, so I help independent businesses. But like, you guys are doing it on a larger scale. And I think that’s amazing. So when I saw the content that you guys were putting out there, I thought it was really good, you know. But as a designer from trade, I felt like there were things that I could have probably done with you guys that would have helped the company grow and be being exposed out there a little bit more. I remember just watching Dave’s first course on importing. I bought the course for myself because I wanted to start importing and see how it was. And he was filming with his laptop. The content was great. But yeah, he was filming with his laptop. You know, I could kind of, see under his nose and the ceiling up there. It felt like, you know, I could bring my knowledge about design and photography or video. And it really helped the business. And now I hope I can also create more videos. I’m not as comfortable as you are in front of the camera or in front of the mic actually. But I think I could also bring that perspective of design and photography and video in today’s e-commerce world which is quite important.
Mike: Yeah and I think this is where the three of us get along so well, even though we are constantly at odds with each other, it’s actually kind of a really funny dynamic. If anybody could ever be a fly on the wall, we’re never yelling at each other, but it’s hard to come to a consensus because we all have different ideas. But the end of the day, we all have a very unique skill set. So as you mentioned, for whatever reason, I don’t understand how this even happened, but I’m like kind of a natural now behind the microphone and the camera. Something I would have paid someone a huge bet, y’know bet someone a lot of money that that never would have happened. Dave Bryant’s just a prolific writer, which is something that I’ve never enjoyed doing. So that makes that easy.
And you really have an eye for the graphics, photography and then, the thing that’s also interesting is we’ve all taken different approaches to our e-commerce businesses and we bring a different background in terms of how we got here. It’s very, very different. And so all those things like help lead to making even more content. And I’m excited to, besides just this podcast, there’s some other stuff that we’re working on. You just did a webinar for Ecomcrew Premium, which was like our most successful we’ve ever done. It got the most questions and most replays. People loved your tips on how to make some subtle changes and things with photography and graphics that produce much better conversions. And you show people how to do that without having to read 20 books about Photoshop. So that’s just a couple examples of what you’ve added there. So I think that what would be really good here is to just talk a little bit about your background introduction. I think that it’s good for both this conversation we’re having right now about why you’re a part of Ecomcrew, but it also lead to the main topic we want to talk about today, which is the dropshipping. So talk a little bit about you, you’re another Canadian, so you’re up there in in French Canadia, right?
Dave: French Canadian, so that’s where the accent comes from. Yeah, and I actually, I’m 41 years old right now, so I’ve been in the business of design or web design for more than 20 years. And I soon started doing web design for clients as soon as I got out of school and then eventually started my own freelancing business. I’ve worked for a few companies for ad agencies, but I mostly work for myself all that time. And I started doing e-commerce maybe 10 years ago selling dog collars. I was doing photography for dog rescues and I thought I could help those rescues with their website and maybe doing the photography and selling dog collars to help them raise funds and things like that, so. And then in I would say 2011, where I decided to start another brand, called Earth Rated Poop Bags with a partner. We started selling poop bags imported from China, that was not dropshipping. It was our own brand, so I worked on the marketing for that. And at the same time, I started my first hardcases.ca business which is a drop shipping business. So I’ve always been doing multiple projects at the time. The same time, I think, you know, it’s all about putting the hours and liking what you do eventually. You don’t see those hours going through, but that’s where I’ve learned a lot about Photography, Video, E-commerce and things like that, so…
Mike: Yeah and even though Dave has somewhat of a thick accent at times, you weren’t misunderstanding him. He really is saying poop bags. That’s what he first told me. Is was like, what? You do what? But you built like a really big business out of that. And we’ll probably do another whole episode on that someday because there’s a– it’s about to kind of come to fruition. And it’ll probably be a really fun story to tell in completion. But we really wanted to talk about dropshipping today. So as you mentioned, hard cases.ca, so that’s the site you started in 2011. And for you, it was very much a lifestyle choice, right? I mean you were working lots of hours at Earth Rated and had some personal stuff that kind of came up and decided that you didn’t want to be spending your entire life in an office and went out on the road and started doing hardcases.ca.
Dave: Yeah, I mean, Hardcases started maybe four years before I decided to go on the road, we really started Earth Rated Poop Bags at the same time I was starting Hardcases.ca and I was still consulting for clients. So kind of doing three things at once overall and Hardcases was actually just some kind of a luck. There were these cases that I was using for photography and they were made in Canada here just north of Montreal. I love those products and I thought the brand was great, but they were doing really poor marketing of pushing those cases. Like most people know about Pelican cases, but they didn’t know about the Nanuk cases. And since I was in love with them, you know, I thought maybe I could help them with their marketing, do their websites. So I got into a meeting with the V.P., their Vice President of Sales, and eventually he told me, like, we don’t need a website right now, we’re not ready for that. And on the spot, I just said, well, how about I build my own website and start selling these cases for you guys? Like, could I get a reseller type of price? And, you know, I didn’t know what to say.
Dave: It was just an idea that came out of my head right now. And yeah, they said yes, they printed that contract right there and we signed on it. And one week later, you know, since I had the knowledge of how to build website, I opened up my Shopify site on Hardcases.ca and started selling those Nanuk cases so, yeah. And after that, I was still doing Earth Rated at the same time. Earth Rated started to take a little bit more of my patience, I would say, because I had to go to the office and work with employees there. And, you know, I was the, I would say vice president, co-founder of the business. So eventually I kind of lost interest in the product because I was kind of redoing the same thing all the time. We didn’t have the budget for a full design team so I was doing everything myself. And well, I decided to sell some of my shares and go on the road, that was another kind of dream that we had, my girlfriend and I with the dogs at that time, no, no babies. And we decided to, I decided to sell some of those shares and leave.
Yeah and now, you have babies.
Dave: Yeah. Yeah, well just– we got prepared for that big trip and we had our first son just before leaving. So he was eight months old when we started traveling in a trailer all across North America and parts of Mexico. So at the same time, so we stayed 4 years on the road, had our second baby on the last year. And now we’re back home, trailer’s in the backyard. We bought a small house and we can settle in a little bit. Our older son is going back to– is going to school for the first time. And yeah, we’re I mean, it’s good to settle back in. I like it. I think I can now focus a little bit more on my business and Ecomcrew and having more of a stable type of schedule now so I like it, I like the change too, so its good.
Mike: And now I’m in the opposite world like back where you were, because this is our Second Forway doing this, and so the schedule and reliability and all those things is definitely a lot more difficult. And that’s the part that I’m struggling with, but that’s another topic for another day, so.
Alright, let’s talk about a few things regarding dropshipping. So I mean, we already kind of hit on the fact that, you know, there’s just tons of bad information out there. You know, if you see any type of thing about get rich quick selling, doing dropshipping. And I would also say the same thing with Amazon. And everyone that listens to this podcast knows that we’re the furthest thing from someone that’s going to ever tell you that. But just always be wary of that, right? I mean, I hope that at least one person or maybe a handful of people that are listening to this podcast today decide maybe that dropshipping’s a better path for them. You know, it’s still e-commerce. It’s still very fulfilling in a lot of ways. And we’ll talk about the pros and cons. But in a lot of ways, it’s a better business because there’s no inventory but there are some cons and we’ll talk about that. But it is hard work. I mean, how much time have you invested, you know, into this business and what is a typical workweek look like for you? And is it tailed off or is it being consistent over time?
Dave: I would say that this year I’ve started slowing down. But in the previous years, which is 8 years because it’s– I’m on my 9th year right now, the 8 years that I’ve built hard cases. I spend a lot of hours. I would say easily, sometimes 10 hours a day, 15 hours a day when no big rush happens or when I need to maybe create some kind of content page. I’ll make sure that everything that I do is top notch as much as I can. But, you know, after having my sons, you know, you eventually figure out that there’s more important things in life than just work. And once your son tells you that, you know, he’s four or five years old, he says dad’s always working. This message gets into your head. But it’s definitely a lot of work if you want to make it a good business, especially in a competitive environment. If the product you’re selling is being sold by other companies, like my product is sold in other stores, you know, you have to put the hours in. I was lucky enough that I had a lot of experience. So maybe there’s things that I can do much faster than people that don’t know how to do it or never done it before. But at the same time, I invested a lot more time than I would have thought dropshipping would have needed or what is being said when you hear about dropshipping, how easy it is. It’s not– It’s not easy.
Mike: Right, yeah but I mean, you have a very defensible and reliable business now where those guys don’t, right? And that’s the difference.
Dave: Yeah. Yeah. I mean, even the manufacturer to my suppliers comes to me now for information and data. Because I have a lot of clients. I’m their biggest reseller in Canada. That’s the country I focus in. But other sellers also focus on other types of products. I’m the only one since 2009 who has only been selling Nanuk cases for them. So I represent the brand really well. And I have tons of people who think I’m the manufacturer actually, and I don’t lie. But, you know, when they come to me and they start talking me, they really think I’m the one building these cases in my backyard or something. I don’t know.
Mike: Yeah, yeah, I mean, and that’s because you’re as knowledgeable or more knowledgeable than, like you said, than the manufacturer themselves, and certainly a lot of people that work at the manufacturer’s. I mean you’re adding value, which is ultimately the important thing here.
Dave: Yeah, and I don’t know everything because we have tons of types of client that can use these cases, like I’m not a– I don’t own any firearms and I have tons of questions about firearms, how can people put their guns in there, like what brands and things like that. But eventually, you know, you just do your homework. You go and look for information that most people are maybe too lazy to find out on their own and you bring them back to them and they’re really happy. It’s a lot about, you know, being there for the client. At the same time, if you don’t know the answer, like I can ask my supplier and they have like designers for tech specs and other guys that are more experts in firearms that can even give me these answers. It’s all about being there and being fast on replying to these questions so yep.
Mike: Alright, cool. Let’s go through like Dave Couillard’s Secret System of like step by step, how to create a profitable dropshipping store in like, let’s say 2020 and beyond, cause we’re already getting close to the end of 2019. And we kind of– You’ve shared some notes with me and I went through these and I think that this is like just a great framework. So, I mean, the idea here is that if you’re thinking about getting into dropshipping, this would be the way that I would do it. And I also did dropshipping with treadmill.com. So as we’re going through this list, I’m going to tell you the things I think that you don’t want to do and use treadmill and myself to throw myself under the bus in terms of that. So what do you think about going through and doing that, Dave?
Dave: Yeah, for sure.
Mike: Alright man. So step one here you have is how to find products and suppliers, right? Because I mean, you can’t really dropship anything unless you have something to dropship to people. So what’s your secret strategy there in terms of how to find the right products and suppliers?
Dave: Yeah, that’s actually usually the hardest part, right. This is where most questions come in, usually related to what should I sell? And people start having, you know, you go– if you go to China, you go on AliExpress, there’s so much stuff there. And that’s definitely not where I would start. Basically, there’s tons of products that are already being sold online that could work for you. But maybe there’s a market that you could target instead, some kind of a market or a niche that you could dominate. For myself, for example, I promote the Nanuk brand, which is not as big as Pelican. Pelican’s pretty much saturated all over the US. There’s tons of distributor doing it. Nanuk at that time, didn’t have a lot of people. Again, it was kind of a luck for me to kind of decide to sell these cases on the spot. But at the same time, while I look at it today like it was a great decision and a great choice. So I was also– right now I’m focusing on Canada, the market in Canada. There’s like millions of people here and there’s tons of Canadian who needs these types of cases. I could also focus in the US and try to sell there, which I do, but I don’t focus.
Dave: I’m just available if some people want to buy them. But the competition over there is so much more important and it would cost me a lot more to try to sell a Canadian made product in the U.S. even though the market is huge right. So I’m focusing on a smaller market, but a market that is really warm or hot for buying Canadian made products. So it’s a lot easier for me to compete and even dominate on the search engines also at the same time. You know, Google.ca doesn’t have as many good Website as Google.com might have, you know, for results. So it’s a lot easier for me to do this here. So that’s the thing you could do, right? You could find a product that works and then try to market it to a different country or a different– even a state, if you’re in the U.S., maybe you want to be the best in your state. It might feel like you’re closing yourself off to a certain market only. But, you know, if you dominate it, eventually, maybe grow to the other market if that’s what you want. But start with something like that where that gives you a little bit of momentum and credibility or even traffic on your website.
Mike: Yeah. So using comparison here again with treadmill and where I think I went wrong. You know, everyone was selling treadmills. Sports Authority and the manufacturers themselves and just all these different big fitness websites that are in the US and so, instead of doing exactly what you’re saying, which is to, you know, to find an untapped niche where the products are not as exposed well. We just were trying to go head to head with all the big boys. And because we had treadmill.com and because I knew nothing about e-commerce, I thought, well, we can just dominate this because we’re treadmill.com but the reality is, is that we weren’t going to be able to add anything to that– to that space. Another set I’ll pick on while we’re going through this example is Right Channel Radios, which was run by my buddy Andrew Youdarian over at e-commerce fuel, which we were just talking about. He sold that to another friend of mine a few years ago. And that’s like a great example of what to do right. Because CB radios is like a very technical product. There was still a lane there where there wasn’t some expert website that existed that could sell those products so even though it’s the United States and it’s you know, he was selling to the whole U.S. and it’s a very crowded market and there’s lots of people selling those products. There wasn’t a subject matter expert there. So I think that those are two other good examples for finding a good product.
Dave: Mm hmm. Exactly. Yeah. The markets are different in any types of product, like a product could be sold to different markets. I have competitors who only focus on firearm owners. You know, I could only focus on camera or lens owners, people who have these digital cameras or advanced cinema guys and I have wholesale clients like I could just focus on that and dropship for these types of wholesale like schools and universities and/or big government agencies, like there’s different ways that you could bring a product that already exists that’s already being sold online. But focus it on the specific market that maybe you have an expertise in or an interest in also at the same time.
Mike: Yeah, and I think the things that you just mentioned, they’re also highly passionate audiences. So there’s people that are going to do a lot of research before they buy and they’re going to be fanatical about the thing that they purchase. I mean, people that are into firearms are very much like that and people that are into photography are very much like that and you have this ancillary product that goes well with both of those niches to protect those pieces of equipment or that firearm. And then the same thing could be said about Right Channel Radios, people that are into CB equipment. A very passionate niche, it’s a very tight community and so you can leverage this. Again, where we went wrong with treadmill, people are not passionate about their treadmill, that’s actually a purchase that they’re making out of frustration because they probably are overweight or, you know, things of this nature. And they’re not passion about that. It’s a pain point in their life that they’re miserable about. And, you know, they just want to get it out of the way and cross off that New Year’s resolution thing. And there obviously is a subset of people that are on the other end of scale that are fitness nuts and are really passionate about their equipment. That’s a very small subset of that and not a big enough subset to go after in this space. So that’s another kind of thing to layer on top of it.
Dave: Mm hmm. So another point that I think is important when trying to find a product or a supplier is try to find products that are actually maybe more expensive than you would think, right, because or at least have a higher perceived value. I say this because again, the gurus are pushing cheap dropshipping like fidget spinners for $5 and t-shirts for $25 or stuff that is under $50. You know, it feels like that’s everything that’s being sold out there, even cheaper than that. Well I sell products that are– they have an average order value of $250. That’s Canadian. But still, you know, it’s still a decent amount and I sell to some customers that will buy like large amount of cases at the same time for wholesale or universities and things like that. So the orders that I get, they are worth it. I don’t need hundreds of clients every day to make a living, like I could get like 5 clients per day or even less sometimes, you know, depending how much they spend and a lot of those clients come back, so higher revenue is also like less customer service tickets. So at the same time, if you’re selling thousands of those little spinners, how many people you think are going to complain, have problems with their spinners and send you emails after that, like that time that you’re spending on a $5 widget versus the time I might spend helping a customer for a $250 order. Like I would rather spend 30 minutes with a guy who might spend $250 on this case and maybe buy another one next year, then, you know, like help this other guy with a spinner that’s not spinning or whatever.
Dave: So, again, I don’t need thousands of visitors to make a decent revenue. I’m focusing on Canada like we don’t buy as much as in the U.S. here. So that all fits together, right? I’m fine selling to Canadians only because I get enough orders and it’s still growing, you know, without me– like I still work on the business but like with that level of average order value, like, yeah, I don’t need that many customers. And that also leaves you a lot more margin for advertising, because if you’re not advertising your website, the only place you could be selling at that point is maybe on Amazon and even on Amazon now, you need money to be able to promote your product either by giving away some products to raise your rankings and reviews or do some advertising with a Pay per Click on Amazon. So it’s the same thing for me, like I use Google advertising and you know, I can spend $25 to gain a customer because I know that the average order value is $25. But if I have to spend, you know, $15 or $20 to sell a $5 widget, I mean doesn’t make any sense. Now I can’t advertise anymore so I’m just trying to push stuff through Facebook and hoping that I can build a community by not spending any money? That’s really hard. It takes a lot of time, so yep.
Mike: Yeah, and I think HardCases and you know exactly, so it’s in that $250 sweet spot average order value. Right Channel Radios is another great example, same type of thing. I think the thing that we got ourselves in trouble with at treadmill, you gotta be careful about getting into the four figure average order value. You know you got a thousand dollar, $2000, $2500 piece of equipment. People are going to be a lot more price sensitive and shop it a lot harder when the price point is at that level, not quite as much at $250. I mean, certainly people will, but there’s like, there’s this curve that happens right, where if you had to plot this on a graph, it would be the chances of someone really pricing this out versus not: it goes up as the ticket price goes up, right? And so everyone was like looking to save $5 or $3. And we would help them for hours with answering all their questions and they would go buy it somewhere else for $3 less. And certainly you run that risk with hard cases, but not quite as much. And Right Channel Radios is the same thing. And another really good thing to look at is you can price the main components really competitive and make yourself look like the cheapest place or at least one of the cheaper places and make all your money on the accessories and Right Channel Radios like really had that going for it where you could sell cables and mounts and antennas and all these other things that people would never look at the pricing for. But they were looking at the price of the main unit and with treadmill, we didn’t have that ancillary stuff. I mean the only thing we really could sell them would be delivery services or something, and that was something they also kind of compared. You don’t really need other things when you’re buying a treadmill to go along with it. There’s a couple of small examples, but it was a very low uptake. And so you have accessories, right? You have the foams and other things and that’s another great way to make money.
Dave: Yeah and locks and things like that. And you’re right about that. Like if somebody spends $250 dollars on a case like a TSA padlock for $30 doesn’t seem too cheap.
Dave: It doesn’t seem too expensive, I mean, versus the price of the case at that point. And whatever they’re putting in there and you’re already spending $250 probably to protect thousands of dollars of equipment. So why not add one or two locks on top of that for $80 or $60? Then, you can create these bundles. And yeah. It’s good. A good way also to do some remarketing afterwards. You know, get people back in for other accessories they might need once they start using their product. Maybe they want to have this lid organiser so that they can be organised even more. So they come back and spend another, you know, $60/$80 on the website. So yeah, accessories are amazing. Especially if the product tends to that, that’s perfect.
Mike: And someday, we’ll talk about this on the Podcast, but your first ever physical product is actually going to be an accessory that you’ve developed. We’ll leave that carrot hanging out there for people to be interested about that for another time. But I think accessories are definitely a really good spot.
Dave: Yeah, that’s a good thing about like the business that I have right now, so I get a lot of insight from clients and now I know I could be creating my own products based on this demand. You know, I can– things that my suppliers never gonna get into, maybe I could get into and sell some of these accessories or bundling products with unique elements so that even my competitors are gonna be like, where did he find this extra thing, right? It’s not coming from the supplier. Well, that’s my new brand, you know. So now I’m creating kind of a unique product inside my dropshipping business.
Mike: Yeah, and I actually think that this is where the real gem is and in a dropshipping business and a lot of e-commerce businesses, this is something that I learned with IceWraps and we bought IceWraps.com back in 2015– now, it wasn’t a dropshipping site, we were actually buying and reselling– it very well could have been a dropshipping site. In fact, it might have been easier than having to buy all this inventory. But what made IceWraps, a multi-million dollar business for us, was getting to know the products, the customers, the pain points, no pun intended, of all the different things that were in that niche. And that’s what led us to develop our products in that space. And now our private label stuff is 90% of what we do it versus you know, before we were doing a 100% other people’s stuff and we never would have even dreamed of selling ice packs in these types of random things if we weren’t in that business. And I would challenge all the people out there listening thinking, “Oh, it’d be great to sell ice packs”, you don’t have the knowledge that we have. I mean, we went through hundreds and hundreds of phone calls with customers. We used to have to take phone calls and we dealt with the returns and knew exactly why people were returning them and we dealt with all the customer service tickets and things of that nature. And so we made what might have been a very subtle change, but it was a major thing that fixed stuff that was in the industry. And that’s kind of one of things that you’re doing with your product that you developed. I mean, you’ve made the best mousetrap for the thing that you’re developing and it really is a great product and you never would have developed that probably if it weren’t for owning HardCases. And I think that you probably will have a successful product in your hands.
Dave: Yeah, yeah and my first idea was actually to make it just to learn. You know, that’s when I joined Dave’s course, back then importing from China and I went to China with you guys and started, you know, finding suppliers. You introduced me to some great suppliers and like the whole experience was there and it just worked out. Right now, I’m selling these products that I’ve imported and I create these bundles. So that’s perfect.
I just wanted to come back to the– like, I know some people might say, well, where do you find these high priced products? I mean, for myself, again, I was lucky enough to go to that supplier and wanted to do their website and just asked for– to be a distributor for them. But you could do the same thing, you could drive around your neighbourhood. Maybe if you have an industrial park somewhere and there’s tons of manufacturers where, you know, you could just look at them, what they do and check their website, maybe you could help them by being better at marketing than them online. Maybe you could– you know how to build a website which they don’t have, you know, like you could make these deals with these companies. You could also use Google Maps and find other suppliers around your place.
Dave: It doesn’t have to be around your place. But I feel like when I drive down on the highway and I see all these big manufacturers like some of them, I’ve never even noticed. But now I see their signs, I’m like “Oh man, what do these guys do?” You can find some of those markets in automotive, aerospace, like precision instruments, even pharma(ceutical) that you know, that they have products that maybe you could dropship for them because they don’t have the knowledge or they’re either big enough that they don’t even think they need a website, but– or they have an old type of sales mentality where they have a few salespeople that are pretty much like, you know, finger in their nose at work, in front of their computer and waiting for the phone to ring, when you might have learned a few things on how to do marketing online or how to use social media to create ads to send to a Website. You know, these are all things that you can learn online with courses. But, you know, you go to these businesses maybe eventually after you’ve done your little work and took your notes and tried to sell your services by being their sales rep or some kind of company that can sell online as a dropshipper.
Mike: Yeah, and it’s actually a really interesting strategy because I think that because the world is going more and more online, these brick and mortar and/or warehouse type places are probably struggling more now than they were 10 years ago. And it’s funny because if you went to them 10 years ago with this concept, they probably would have told you to go away and leave us alone, because why would we want to work with you? Now that they’re probably seeing their sales in a decline, they’re probably looking for any opportunity they can to hope something like that takes off. So I think that people will be more receptive than ever to things like that and I think it’s a great strategy, because then you have a face to face. local relationship over anything else. That’s going to definitely outperform to just having an online relationship.
Dave: Yeah, and that’s exactly a great segue to my third point here on how to find suppliers and how to maintain these relationships with them. If you have a supplier that’s close to you, like my supplier is about two hours away from where I live, so I can drive there and meet with them. And being close to those suppliers and then, for them to see your face again is super important, like having this solid relation with them. I think that was one of my biggest advantage because I have a lot more insights like I go to to my supplier and I see the design team there working on the new cases coming out. I see them working on these new accessories coming out like, they let me take pictures sometimes that I can kind of share with my own subscribers on my newsletter or on social. And then I’m kind of in the know, right, and at the same time, I can share with them some information if I want to. Like you don’t have to share everything, but if you have a good relationship with them, show them that you want to help the brand grow. The bigger the brand grows, then the better for you also, because not all searches coming from Google are going to be branded search. And if you’ve done a good job of ranking your web site, then you get the sales from that, you know. And that’s what I’ve been doing with my supplier. I’ve been really close to them.
Dave: Even the people I work with over there, like the girls that take my orders and send them to the shipping department at the back, like I have a close relationship with them. And, you know, on Black Friday, when they have to work extra hours, bent over, entering orders and things like that, there’s a lot of things that are not automated at my suppliers, so they have a lot of orders that they’re entering by hand. It gets really hard for them. So, you know, I’ll send them some gifts. Last year, I sent them some massage for their shoulder, like electronic massage. So they could work during the Black Friday rush, you know, for five days, just filling up my orders. Like it’s still the– I would go there and work with them, you know, and encourage them like I can’t do their work because, you know, I’m not employee over there, but I’m still there vouching and helping them and having this relation, building it up, you know, Christmas time I’ll send them gift cards and I’ll pay for pizza for the Department of Shipping in the back. You know, you can’t really buy your like gifts for everyone, but you can kind of do things that are going to make people remember you. So now every time I go to my supplier and there’s new people there, people introduces me as being HardCases and they’re like, “Oh! HardCases!” like everybody talks about HardCases over there, so that’s what you want right? You want to be almost indispensable for your supplier.
Mike: Yeah, and I mean, I think this goes to everything in life. I mean, relationships are really important and we do the same thing with our physical product manufacturers. I mean, it’s the reason why Michelle and I have invested so much time to go over to China a couple times a year, back in the day. And it’s a lot of work and 12 time zones away and a huge long flight and an environment that I’m not super comfortable in and don’t particularly enjoy to be in. But the reality is, is that because of those relationships, we do much better than our competition because they’re not willing to take that extra mile. And it’s not always, you know, it’s not just a self-interest thing, I mean that’s just a part of my personality. You know, I always approach things more from a perspective of what can I do for them versus the other way around. And, you know, think of like how many communications where the first touch point is what can someone do– “How can you help them?” basically And instead of the other way around and it’s so frustrating, especially running something like Ecomcrew, we’re constantly– like every email is people that are just constantly trying to to get something out of us. And typically people that are in the software space or they run some type of law firm or they have a podcast guest for us, so they want us to market an article for them and give them a backlink. All the– I mean, it’s dozens of e-mails that are coming in a week. That’s just foolish. And, you know, so if you have people that you develop relationships with and go out of the way like you’re saying, they’re going to think of you first and you’re gonna have a much better relationship with them over the long haul.
Dave: Yeah, you gotta treat them with respect, like errors are gonna be made, delays are going to happen. You’ve got to understand and be fine with it. And usually, you know, if you have a good way of doing business with your customers like, I like having tracking sent to my customers, like the night that the shipment has been done and how is– it hasn’t always been perfect with my supplier. But since I’ve kind of pushed that a bit more, they’ve become more aware of it. And they also want to be a brand that respects my customer at the same time, right. So they are making the efforts and they are implementing any new strategies and new techniques and new systems over there to make sure that this is done. So you’re bringing a lot of value at that point, which they usually never have because they never had to deal with customers on the day to day like I do at the same time, right.
Mike: Exactly. Alright, cool, so let’s shift gears a little bit and let’s talk about actually running a dropshipping store because it’s obviously a little bit different fundamentally in the backend where you’re going to be handling things. So you don’t have your own products, you’re thinking of launching a dropshipping store with the criteria you’ve kind of laid out here. Where do you go from there? What’s like the first step?
Dave: I mean, there’s tons of steps, right. The steps that I think are special about my business are some of the ones that I’m going to talk about here. One big thing and it’s not everybody’s thing also, like I have been in discussions with Dave B about this exactly, like I like to be real and don’t– I don’t hide behind my company. There’s a lot of those crappy businesses out there like you don’t know where that product is from. The “About Us” section is pretty vague. There’s no names there. You don’t know if it’s a– I mean, it usually is a small company, you can kind of see that from the way the website is built. But at the same time, like you don’t know who’s gonna be selling these products like if you go to HardCases.ca and you scroll all the way to the bottom, you’ll see my face and it’s actually pretty big. And if you call the 1-800 number, it’s going to be me answering the phone, not right now because I’m on the podcast. But if you send an email usually to the like, the customer support, I’m going to be answering that email. And then again, that’s the discussion I’ve been in with Dave.
Dave: Yes. I could still do sales, I think, without a 1-800 number or without answering all my emails and my phones, my phone calls. But the reaction I get from the customers when they are speaking with the owner is a totally different- like they are flabbergasted, like a lot of them are just like, “Really? I never thought you would answer the phone”, like it is– and I answer some of those phone calls or emails late at night. You know, not in the middle of the night, but, you know, after dinner or when the kids are asleep. And, you know, because there’s like people from Vancouver and different time zones and if they can get their answer right away, they will love that. And they usually will convert at the end, you know, at the same time. So I don’t hide behind my brand. I don’t hide behind my products. And, you know, I know these products are excellent at the same time. If you have to hide because you know your products are bad, that’s not a good sign, right. It’s not the kind of drop shipping business that’s going to last for long. And it actually, I don’t think any of my competitors is doing it. Like I’ve seen names sometimes on the website, but I’ve never seen faces like the picture and being the guy.
Dave: And I get that even from– I’ve worked with some half-competitors a little bit like buying some accessories and things for the cases. And these guys, like they see me in the videos and they’re like, you’re famous online. I guess that’s the way I run this type of drop shipping business. And it’s not for everybody, but with the average order value that I get and the relationship that I build with some of the customers that come back every month, every year, every six months, they buy again and again. Then I think it’s worth it for myself. But I think it could be worth it for you, too, because if what you want is have this kind of lifestyle business where you’re not necessarily growing it to be billions of dollars, I think it’s doable. And you can pretty much do a good revenue with this business in it. I like it, too. I really like having people, you know, tell me that they’re happy that I answer the phone or answer their email. It’s quite, it’s good for the ego a little bit but it’s a good part of it.
Mike: Yeah, I mean, I just mentioned this actually in another recent podcast, I think it might have been last week but I was just hanging out with Pat Flynn at Brand Accelerator Live and he did a talk about superfans and a really good tie in to that because if you’re doing all the things, you know, that you were talking about where you just don’t have you as a part of the site and you don’t really care, you’re not responding. You’re never going to get super fans. You got to really go that extra mile and I would highly encourage people to go check out the book. It’s a great book. You know, we don’t need to spend a whole lot time here on that. But I think that you’re dead on when it comes to this type of thing and especially when it comes to dropshipping. I mean, people have opportunities to buy this stuff elsewhere. You have to differentiate yourself and create fans and those experiences and go the extra mile. I mean, you go buy from a competitor of Dave’s and probably won’t even get a response to your e-mail. Or maybe it’s like three days later. And so it’s a much different, much different feel.
Dave: Yeah, and especially when you’re selling high priced items like if somebody is deciding to invest $400 on the product for you and like, he deserves to know exactly when you’re gonna ship, when it’s shipping, what to expect, should you wait two days, three days after placing the order? Like, all my communication is like that and there’s always me signing up at the bottom of the emails. And they know, like I tell them, if you reply to this email, I’m going to personally reply to you like it’s my personal [email protected] e-mail. And I think it just creates that trust between the customer and you in a virtual way, right. Once they see your face, if you know, if you’re good enough and you think you’re good enough to do this kind of thing, I think it really pays off in the long run.
Mike: Yeah, it always goes back to what I always say, which is treat people like you like to be treated. It’s very obvious that– as you were just saying, like if you spent $400 online and the company is like ghosting you, you’re gonna be pissed. So why like produce that environment for somebody else?
Dave: Yeah, yeah, you don’t want the person to be rethinking their order right after they place it because they’re not sure, you know. This is a bad sign because you want reviews too, at the same time, right? In the end, like I have thousands of reviews and there is a lot of reviews about me personally where like the customer service were second to none kind of thing. And, you know, that’s again, it’s really pleasing to get that type of review in the end. But if there’s a little too many dips where you’re letting the customer go in the dark when he’s waiting for his order, like it’s not going to be a good result in the review, probably. And people are not shy leaving one-star review anymore. So be careful with that.
Another point that I like in dropshipping and I think with every dropshipping business should know it’s about running a lean business. I mean, any business should, you know, could run lean and grow a lot. But it feels like when you say dropshipping doesn’t have any inventory, it feels like every– all the money that comes in is pure profit. And you can just use it to buy whatever you want because you don’t have to reinvest it in inventory at all. Well, I mean, there’s things that you need to think about because, you know, fees, taxes, they all come in eventually. And I think running a lean business like I am by myself, I have 2 VAs in the Philippines, which I pay $1000 U.S. per month. And they do all these kind of little work behind the scene that doesn’t really relate to the clients, checking, double checking orders and things like that.
Dave: But, you know, like it’s not a big salary. Like, I’m not investing in like full time employees. So that really helps on the budget. And I also learn a lot of the things to do on my own, right. I’ve learned it in the past but you can learn a lot of things on your own, like making videos is not hard. It’s just about doing it day in, day out. Eventually you get the hang of it and you get better at it. And it’s also about, all about the content eventually, like, you don’t need to have the perfect video. So there’s tons of things you can do on your own without having to pay a lot. And I say this especially in drop shipping because margins can get thin right. It’s not like creating your own product where you have a 100% profit margin and then you can start giving discounts and then putting in your fees, shipping. Like in drop shipping, sometimes you’re left with 5% or 10% net, maybe less sometimes, depending. In my case, I run the business so that it can be at 20% net. But you know, there’s times where I go underneath that just maybe to get a customer. And then again, it all leads up to knowing your numbers, how much it’s going to cost you to gain a customer. Do you really need that app on Shopify? Like there’s tons of apps out there. You’d be surprised to know that they’re only adding a line of code that you could actually code on your own or find online. And you’re paying $30 a month for that. Like it adds up and things like that make a big difference in drop shipping because margins are a lot thinner.
Mike: Yeah, I mean I couldn’t agree more. I mean, it was even thinner with treadmill because we were competing against all the people I was talking about and with high priced items, they were even thinner. So, yeah, I mean and I think this goes to any business and the tendency is as you kind of get bigger to want to spend more money but the idea really is to kind of keep a lean, mean running machine and couldn’t agree more that that’s definitely really important when it comes to dropshipping because again, inherently the margins are going to be thinner.
Dave: And a third point here would be: definitely take care of your customers so we kinda talked little bit about that little bit over there. But in my case, I really care like my customer. I’m doing with Amazon does but I do it personally. So I think I’m better than Amazon at doing it. I’ve actually argued with a client eventually on that, but like I can deliver cases to customers that need it the next day by myself, I went there and gave them the cases in hand. And I mean, I don’t do this every day. I’ve done it twice. But it’s still the kind of thing that I think not Steve Jobs, but Bezos used to do when he started Amazon. Now he can’t do that anymore. Yeah, they’ll deliver in a day, but at the same time, they don’t see Bezo’s delivering it to their home. So I over deliver on my promises with the customers, for example. That’s something that I’ve actually negotiated with my supplier because they were making some mistakes and they were shipping the wrong case to a customer. And it’s kind of a bummer, right. The guy’s been waiting two or three days, sometimes depending where he is in Canada for his case and he gets it. And it’s not the right color. What does he think? Now he’s like, oh, man, I’m pissed. I wanted to use this for the weekend and now I’m going to have to return it so I can’t really use it even though it’s not the right color. But what happens now is that if they send me the e-mails, hey, you know, I got the case. It’s not the right color.
Dave: Well, I tell them right away, it’s like, well, I’m sorry about that. We’ll take care of it right away or I’ll take care of it right away, like I’m taking responsibility for it. And then I tell the guy, like the good news is that you can keep that case so you can either use it right now for whatever you want to for the weekend. You can sell it to a friend or give it to a friend. And we’re going to ship you a new case ASAP. I mean, this is usually yeah, it costs money. And that’s my supplier decided to get onto that because they want to get better at it, too, about, you know, shipping the right orders. But at the same time, like, customers are overwhelmed with this. Maybe he’s getting a $500 case for free somehow. It’s a lot of money that you already paid. Now he’s getting one for free, even though it might not be the exact colour he wanted and now he’s going to get two colors. So that comes back in reviews for sure. Posts, people will post, you know, about their experience on social media and it just builds your business like that, like it’s small steps. You’re not a big business. Usually when you’re dropshipping at first, these small steps add up. And now I’m close to having 2000 five star reviews on my website. So it takes a lot of time when you think that maybe 1% or 2% of people leave reviews on the website to gain all those types of reviews. So I think being fair and overdelivering for the customer is a big thing.
Mike: Yep. And so, bringing treadmill back into this with this particular thing, think about this as you’re picking your niche. With treadmill, we couldn’t do this. It just was physically impossible. It’s really ultimately the reason we ended up selling it. I mean, we did run a successful profitable business for the couple of years we were doing it and it taught me a ton about e-commerce, but it didn’t fit with my personality because I want to do exactly you’re saying, Dave, like someone is upset about something and I want to make it right. Unfortunately, with things like treadmill, or exercise bikes and things like this, you really can’t do that because it’s one thing to have the manufacturer send another case if the wrong color goes out. But first of all, people in the treadmill industry, they don’t care, you know, so it’s like trying to get the manufacturer to correct anything wasn’t going to happen, but you weren’t shipping with common carrier. Now shipping with trucking lines, so things get lost, damaged, show up late. You have no way of fixing any of that. If someone gets something that is damaged or they’re not happy with, you gotta get it out of their house. And because it’s so darn big, you can’t just– they can’t dispose of it themselves. It created like all these problems. And basically, our phone support, every interaction pretty much was someone that was upset about something. And that’s what kind of wore me, and I tried for basically 18 months. The first six months, I just was finding my way. But for the next 18 months, I did everything I could to try to fix all these problems. And the reality was, is that I wasn’t going to fix these problems in this legacy industry that, you know, is nationwide and just wasn’t, it just wasn’t fixable. And so it’s something to think about when you’re picking a niche. And same thing goes with like these cheap AliBaba BS sites. And you can’t fix things there either because it’s, you know, being dropshipped from China and they don’t give a crap, you know. So you want to be in that lane where you have a good relationship with your partners, your manufacturers, your dropshippers. You want to be in a lane where you have the margin to be able to fix things. I mean, that was the other problem in treadmill, like we just couldn’t afford to take a thousand or two thousand dollar hit to fix a problem. It just wasn’t economically feasible. And where you can. You can spend 200 bucks to make it right. You might not make any money on that order, but at least you’re not losing money. And at least you have a happy customer that may come back later and they’ll leave you a positive review. So just make sure you keep those things in mind when you’re picking your niche.
Dave: Exactly. Yeah, for sure. Good point. I don’t know how much time we have for this, I know it’s getting a bit long, maybe for some, but I maybe– there’s tons of steps that you could do to run your own business. You know, there’s things like doubling down on what works for you. It seems like there’s always new marketing strategies and technologies or apps that comes out and you kind of want to jump on it because it’s working with the other guy. But maybe you want to be the best at making those YouTube videos and you just focus on that. I focused on creating great SEO for Google. But you know, at the same time it was going to create great content for my customers. Like they love browsing the website as I create my own pictures and videos. But I’m not doing tons of advertising on Facebook because yeah, it doesn’t really work for me. I’m not putting enough effort to make it work for me. But I know tons of other businesses that make it work for them through Facebook. So just, if you’re a one man show like focus on what you’re good at and what you feel comfortable with and don’t try to be everything everywhere, you’re gonna get customers in the right channels. If you’ve made your numbers right. You still want to make sure that your customers are on Instagram. But if they are like 60 or more, maybe they’re not on Instagram,just find them somewhere else. This is just a quick point that I wanted to put out there.
Mike: Yeah and you’re right. We’re probably running a little bit late on time here, we usually try to keep these at 30 minutes, I think we’re approaching an hour but it’s just been such great content that I thought, we’ll make an exception here and make a longer podcast. But we can probably sit here and talk for hours more. I think it’s probably a good time to wrap it up. I want to end with something fun, though. Let’s play a little game. Let’s do Rapidfire pros and cons of drop shipping and we’ll just bounce back and forth one each and until we can’t come up with any more ideas. You start with a pro or a con.
Dave: Alright. OK. I mean, let’s do a con. Cause we’ve been talking about pros here. A con of dropshipping like the risk can be high. In my case, I’m selling a product that I don’t own and I only have one supplier. If they decide to cut me off, I’m totally off. The only value that I have maybe is my website. It’s called HardCases.ca Maybe I could turn around and try to find another supplier in the same business. But it’s, you know, like it’s a risk in drop shipping but there’s risk in any other businesses so it’s a con that you can kinda see in any type of e-commerce, I guess.
Mike: I would say a pro is that you don’t have to have inventory so you can do this with– at least to get started, especially way less cash and cash flow never really becomes a challenge in your business. So that would be a pro for me.
Dave: Yeah. Let’s go for another pro. I would say that I have a lot less stress running a drop shipping business and stress I think is something that kills a lot of owners eventually. Like it’s like you talk about inventory and not having inventory, like it’s a pro that I can sleep at night, right. I don’t have any debts. And then, I can just run this business without too much stress. There’s always a little bit, but not as much as I think somebody who has employees and all that stuff.
Mike: So I would say a pro would be, something I was mentioning earlier where you can run this business, especially in the terms of getting traffic, getting sales, getting attention to your website, selling these other people’s products and becoming intimately knowledgeable about the niche and then leveraging that later to cherry pick and launch your own products, which ultimately I think is a really good spot to be in. So I would say that that’d be a pro.
Dave: All right. And again, you don’t have control over the product itself or the brand and sometimes they might take a turn to the worse or like, right now, I was scared because my supplier got purchased last year and I didn’t know what was gonna happen with the new owners. Will they change the contract with me, will they change the brand completely? Decide to kill it? You know, sometimes if it doesn’t work out, investors decide to kill a business. They could do that, too, at the same time. And like you’re again, depending on this. You don’t have total control over the product or the brand.
Mike: I would say a con would be that, ultimately, realistically, unless you can negotiate an exclusive agreement, which is almost impossible, other people are going to be selling the same products. And that’s tough because, you know, I really enjoy being in this spot now where if someone wants to buy a particular product of mine, that they’re not going to find it anywhere else. We are the only people really selling it. And so that’s tough, because when people are doing comparison shopping, you probably can’t win on price. If you’re trying to win on all the things we talked about in this episode, you’re probably not going to win in price. So you do lose sales to other people after you’ve given them all the knowledge, they’ll go elsewhere. And MAP pricing is just about impossible to enforce. So I would say that’s a con.
Dave: Yeah, you’re bringing a point here. My suppliers actually working on a map practicing for next year and they keep saying that it’s going to come. This is something I’ve been pushing for a while. I feel like all the big brands out there have my pricing like Apple and BOSE and these companies. You can’t really find the products for cheaper anywhere else, right. But I think if MAP goes up and the supplier is able to police it the right way, I’m going to have a huge advantage because I know most people find my website first before finding the competitors. And like I have all the trust pieces on my website to make them do the purchase. So if it’s not a question of price, it’s only a question of trust. And I think I have that right now. So, yeah, I think overall, if you’re not looking to I mean, you could build a pretty decent business doing drop shipping, but I think eventually you have to maybe create your own product if you want to grow it bigger, have more revenue. But for me, drop shipping right now is a great lifestyle business. I make close to a million dollars a year in revenue with this business with decent net profits. And I can spend time with my family at the same time because like I said this year, I’d start slowing down a little bit, putting too much hours up on that business just because I’m fine with the amount that I’m bringing in right now. And it’s still growing. Eventually, you have to decide what you really want, what’s your end goal with this? You don’t want to compare yourself.
Mike: Mm hmm. Never forget your why.
Dave: Yeah, exactly. You know, you don’t want to compare yourself to all these huge, multi-million dollar companies and think you’re not doing a good job. Like, what do you really want? What I want right now is, this type of business is good, even though my supplier is trying to get me to sell more, if I tried to sell more at that point right now, I’m going to lower my net profit. And if I lower my net profit, then I’m not going to be happy because I’m going to be working more hours for less money and money for me right now, is not more important than my kids and my own health, so.
Mike: Love it. Great place to end. Dave, thank you so much for coming on, welcome to the team officially.
Dave: Yeah, thank you. It’s been a pleasure, Mike. Take care.
Mike: We’ll talk to you soon! Happy selling.
Dave: Yeah! Happy selling.
Mike: Thanks, man.
Mike: All right, guys, that’s going to wrap it up for the 286th episode of the Ecomcrew podcast. Thanks again for all your support and for joining us today. Just want to mention, if you haven’t had a chance to leave a review yet, please do so. It’s been a few days since a new review’s come in. So if you haven’t left a review yet, please go over to iTunes, to your podcast app, wherever you listen to the podcast and leave us a review. It really does help the show rank better, gives us more exposure, pushes us to produce more and more of these episodes. Hopefully you guys have been enjoying them. I know I enjoy recording them. So without further ado, that’s gonna do it for this week’s episode. As always, you can get to the show notes at Ecomcrew.com/286 in this case, the episode number. If you want to leave a comment for Dave, Dave or myself. We’d love to hear from you. Again, I wanna officially welcome Dave Couillard on as a official partner in Ecomcrew. If you’ve been watching anything that we’ve done for the last year or year and a half since he’s been involved, it’s pretty hard to not see firsthand how much more professional we look. And it’s all because of everything that he’s done. So thank you, Dave. Appreciate it. Thanks for coming on the show today. And until the next episode, happy selling and we’ll talk to you soon.
Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.