Hello, everybody. Anton Kraly here from dropshiplifestyle.com. That is my coaching company, where we help people build highly profitable semi-automated stores by drop shipping high ticket products from domestic brands. Now, in today's episode, we are going to talk about drop shipping within unlimited ad budget. Now, I'm going to make a disclaimer before we get into this, and I show you what I'm talking about here and how to make this happen and that disclaimer is that this method is for the vast minority of people listening to this and in fact, the vast minority of advertisers as a whole. With that being said, I'm sharing it anyway, because I think it's really cool. And once I figured this out and really started to shift some of my campaigns into this, when I say campaigns, I mean ad campaigns, once I started to shift some of them into this method, it's led to us spending a lot more money but also making a lot more.
With that being said, I'll share the method with you and then I'll explain why it's not for everybody and why you should be extremely cautious if you want to experiment with this. So I'm going to use my digital whiteboard here for everybody watching as a video. And if you're just listening, don't worry you'll still get full value here. So let me switch screens now, pull this up and we'll get into it. So for most drop shippers when they get started with paid advertising, they think, "What am I comfortable with spending a day in ads? What should my ad budget per day be?" Now, this might be a number like let's just say, $10-$30 to start with which is actually what I typically recommend.
And then over time as people get results, they obviously find [inaudible 00:01:39] in their campaigns, they start to opt that budget. It's working, let's have it work with more money and maybe they take it from $20 to $50. And maybe eventually they take it from $50 to $100. And then maybe they go from a $100 to $200. And the way that they increase their results with paid ads is by continuing to increase their daily budget and of course fine tuning what's in their campaign. But let's just say we have that $200 number, this would be the daily ad budget. What this is when your campaigns are just set up with that daily budget is what is referred to as budget constraint, meaning that if you set your daily budget at $200, your campaign will never spend over $200.
I say never, we all know there's errors inside of Google and Facebook, they'll slip and they'll go a little bit over, but typically they won't. It'll be about $200 a day, or it may be much less if your ads are terrible, or you set things up wrong, or they're not going to convert, Facebook or Google won't show them. But if you set your daily budget at $200 in general, that campaign, that ad campaign will spend up to $200. So again, this is what most people do and it works. It works great, this is how still I would say the majority of our ad campaigns are set up. But that's not what this episode is about, this episode is about drop shipping with an unlimited budget and how we're able to make that work and how that should be your goal as well.
And the reason I say that is because really one of the biggest questions we get is, "What should my starting budget be?" Again, between $10 and $30 is typically good, but the goal should eventually have it be as much as possible, as long as it's profitable. And I know not everybody's going to put out huge numbers from day one in terms of ad spend, you shouldn't but the goal should be over time you're spending as much money as possible as long as it's profitable. Now, the problem with traditional campaign setups that are budget constrained is even if you have an amazing day where your ads are converting like crazy, once Facebook or Google hits that, in this case $200 threshold, spending is cut off, your ads aren't going to show anymore, you're basically throttling yourself because you gave yourself this maximum, or I should say you gave Google or Facebook this maximum.
Now, the way to spend unlimited amounts of money is to move from budget constraint to what is known as bid constraint. Now here, you're giving Facebook and Google, you're still giving them the amounts you're willing to spend every day, but that's not the important thing that you give them. The important thing that you give them when you move from budget to bid constraint is the maximum that you're willing to pay for a specific action.
What's a specific action? It's up to you. It could be a lead, somebody entering their email on your site, it could be a landing page view, simply somebody landing on your site. But if you want this to really work, then the action, the conversion should be a sale and it should be based on the actual dollar amount of the sale. How much is somebody spending? Now, let's just say we're going to use round numbers and averages here because I'm not going to go through a full product catalog, but let's just say on your store you sell products where they're all $1000, everything's $1000 and you are willing to spend up to $100 to get $1000 sale. So your minimum that you're willing to accept is basically a 10X return on ad spend. And I'll just change the color for this. That means for every dollar you put in two ads, you get $10 in profit back. That would be a 10X return on ad spend and the way that some platforms like Google will reference it would be 1000%. So it could be 10X, 1000%, it's the same thing turning in this case $1 into $10 in sales. Now, what does this look like in terms of how to get the most for your money and spending unlimited amount? Well, once you have that number and once you know your numbers and you're setting up your ad campaigns in Google or Facebook, you can bid using these constraints. So let's just say for a Google campaign you could choose your bidding type as target ROAS that stands for target return on ad spend.
So for Google, you could do target ROAS bidding, and you can make your target return on ad spend 1000%. Now, what that would mean and is as long as you were getting that Google knows that numbers are working, let's keep spending. Here's the thing though, when you're setting up these target return on ad spend campaigns, you still need to enter your daily budget, the maximum. So if you put your $200 normal daily budget, and you use that for a target return on ad spend campaign, once it got to the $200 spend, even if you were still profitable and still getting your 1000% return on ad spend or better it's going to stop spending. So this is where the unlimited budgets, the hypothetical unlimited budgets come into play because if you're giving Google this criteria. And let's just go the other way if you're on Facebook, you could say for Facebook you want to pay no more for a sale conversion than $100, then it's the same thing.
They phrase it differently, but you're giving them the same inputs, what you're willing to pay for a sale. Well, then the $200 on Facebook would also be spent once that was ran through, even if all the numbers were in your KPI, meaning you were getting your return on ad spend. Well, if you know that Google and Facebook once they can't reach your target return on ad spend anymore will stop spending, then it doesn't matter how high you set your budget. So instead of having a $200 daily budget, now you can make that, if you're a bit constrained, you can make that a $2,000 daily budget, or you can make that a $20,000 daily budget, because the only way that that money is going to get spent and the only way that that budget is going to be used is if your numbers are falling within the targets that you set, if your numbers are meeting those thresholds.
So for example, if the minimum return on ad spend that you selected was 1000% in Google, then guess what? If $200 gets spent in the first hour of the day, but you're reaching that number, you're above 1000% return on ad spend, then it's going to spend more, and it's going to spend more, and it's going to spend more because your store is making money and your return on ad spend is there. But if it can't reach it anymore, if it's a bad day, it's not going to spend it. Now, before I tell you how we set this up, I do want to let you know again why I said, "The concept's simple, but this isn't for everybody," it's because especially in the beginning if you have a newer Facebook account or Google account that's recently linked to your online store, you need to make sure basically that everything is being tracked as it should.
For example, every sale that's coming through is being tracked on Google and Facebook, you want to make sure that the dollar amount that people are spending on your store is being sent to Google and Facebook and reported accurately because what Google and Facebook are going to do if you just make budgets as high as you want is use the data you're providing and if that data is not accurate, if it's over reporting for some reason, which should be fixed first, then it's going to keep spending because it's going to think numbers are within KPI. So definitely not a beginner strategy, something you don't want to use until both Facebook and Google have tons of data and you can confirm that all of your tracking is working correctly.
And even then I wouldn't recommend doing something drastic, like moving from your normal hypothetical $200 budget to $2000, don't make that big of a jump. Maybe move from budget to bid constraint, and then go from $200 to $400, see how that works for a couple of weeks. Then maybe go from $400 to $800 and move up from there. And remember, just because you set it at $400, or $800, or $20,000, doesn't mean that that money is going to be spent, it's only going to be spent if the ad campaigns are able to convert for you, if they're able to bring in sales at the return on ad spend that you set when you created them. So that's it for this episode, guys.
I hope you got value, again, something a little bit advanced and something, again, it's not for everybody but something that has helped our businesses a lot, something I think will benefit you in the longterm and something you should keep in mind. So with that being said, if you're watching this right now and you're like, "Anton, that all sounds cool, but that's way, way, way over my head. I just want to know how to get started with Google and build my first profitable campaign." Well, listen, I'll take you through everything from A to Z a complete training, that is the Drop Ship Blueprint, it is our award winning program. That was voted best eCommerce course by Shopify.
You can learn more about that at dropshiplifestyle.com/ecommercecourses. I will link that up. But even better if you want a free training from me, plus a special offer to get enrolled in the Drop Ship Blueprint, I'm going to link up dropshipwebinar.com in this description. You can go there, get a three-hour free training from me, a list of 237 profitable products to sell online and I'll make you a special offer for the Drop Ship Blueprint. So as always guys, I hope you got value from this episode. If you did, let me know, leave a comment, type value, so I can see that this type of content is helpful for you. And as always, if you are not subscribed yet to the podcast or the YouTube channel, be sure to subscribe to both so you can get notified every single Monday and Thursday, whenever we have a new episode goes live. So that's it for today. Thank you. I appreciate you and I will talk to you on Thursday for the next episode of the eCommerce Lifestyle Podcast. See you, everybody.