eCommerce Lifestyle

So You Want to Start a Dropshipping Business?


It’s important you know what you’re getting yourself into before you start a dropshipping business. It’s also important to know what to expect (both the good and the bad) before it happens.  

In this episode of the eCommerce Lifestyle podcast, Anton shares the questions you should ask yourself before starting a dropshipping business.

As always, if you have any questions and suggestions, please feel free to leave a comment below. Don’t forget to share this with someone who needs to hear it.

What's Covered in This Episode:

Ask yourself these questions before starting a business...

  • Why do you want to start a business?

  • Do you see this becoming a full-time job or a side hustle?

  • How do you handle complaints?
  • How do you react to failure?
  • Do you have realistic expectations going into this?
  • Are you willing and able to “delay gratification” in the beginning?
  • Have you thought about what your “worst case scenario” looks like if things don’t work out?
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What's up, everybody? Anton Kraly here and welcome back to the E-Commerce Lifestyle podcast. So if you are thinking of starting a drop shipping business, I think it's important that you really know what you're getting yourself into, both the good and the bad. And I think there's some important questions that you should ask yourself before you even start doing the work. Now, this episode, this idea, this topic, actually came about because yesterday was my wife's birthday, and my wife loves baking. She's amazing at it. She can bake things from all over the world where the names I can't even pronounce. She makes them, and they're delicious. That's why I've gained some weight over the past few years. But for her birthday, we did something special during the day. Then at night, before we went out to dinner, we went to a baking class, but it wasn't a normal baking class where you go and they teach you how to make something. Instead, it was a class that was hosted by the owner of this bakery. She actually owns, I think it's three different locations, successful with it.

And the class was about starting a business that was a bakery, basically starting your own bakery. And what I liked about it, my wife obviously did the research. She found it. And what I liked about it is I thought we would be going to this class where this person, the owner, this woman, would be telling us all the benefits. And she also owns these like commercial kitchens where you can rent space in. And I kind of thought it would be more of like, "Hey, here's what's great. Here's how you can save money if you go through our company and bake here and sell your goods elsewhere." But that's not what it was at all.

Instead, it was a very honest look at what the business is, and what really blew me away is the class, there was nine people there, there were nine people, including myself and my wife, so seven others. And they all came from all different walks of life. I think somebody said they worked with the airlines, somebody worked in the federal government. Somebody just said they were in corporate America for the past 20 years, somebody owned another bake shop, but everybody there was basically there because they wanted to transition from what they did. One of the women said she had worked for the federal government for decades and she wanted to basically go from that to owning a bakery. So like people with big dreams, big goals, and what happened, and it was apparent from as soon as the class started, is this woman, the owner, was basically talking people out of owning a bakery and getting into it.

And by the end, I think it was maybe an hour long, I really don't think anybody there wanted to own a bakery anymore. And by the way, my wife, we've talked about it. Again, she loves to bake, but we're not about to sign a lease or anything and start a bakery. She just wanted to learn more and do the smart thing and learn from somebody that has been doing it for a while.

So what was interesting again, instead of this being like, "Hey, here's what you need to do when you start a bakery." Which she did cover, she covered a lot of the downsides, and a lot of the reasons that she's seen people fail over the years. So again, I thought that was great. At first, my thought as she was going through everything was like, "Wow, the business that we're all in," e-commerce specifically with the drop ship lifestyle model, the whole time I was just thinking is, "night and day. It's just so much better than what everybody is here to learn and potentially try." And that was just like all I was thinking while we were there.

But afterwards I started thinking, "You know what? People still should hear what they need to know going in." Because even though what we do, is in my opinion, has so much more opportunity and such a better lifestyle you get out of it than what was kind of being talked about there, still though, it doesn't mean that anybody can just do what we do and see these amazing results from day one or anything. So basically inspired by this teacher. Thank you for your amazing class. What I did was put together a list of questions that I think everybody should ask themselves before they start a drop shipping business, before they get in to their first thing.

And again, the goal here is to one, help you really know if this is something that makes sense for you and you should even put your time into, and two, understand that as things come up, you'll need to be able to find solutions and it's better to think them through before you start, that way when these challenges do arise, you're not panicking and thinking, "What do I do?" Instead you've already mentally been through it so you know how to basically push through and keep going.

So the first question that I think is really important to ask yourself is why do you want to start a business? I know from speaking to many people that are in my drop ship lifestyle program, that they are getting into it because they want to create a second stream of income, and it's because they are basically at like a ceiling or a barrier with their salaries, and they get to a point where maybe they're getting these like micro raises, but nothing that's going to change their lives. Nothing that's going to allow them to get a nicer house or live in a better school district or go on more vacations. So they're doing it to supplement their income. And I think you need to think like what's the actual reason, right? Because what I realized at this baking class, going back to that example, is some of the people said, "Yeah, I want to start a bakery because you know I love to make macaroons." And that's not a reason.

So the way I'm thinking about this is if you're thinking, maybe you work at a marketing company or something, and you do the creative and you're an amazing graphic designer and you love graphic design, that shouldn't be a reason that leads you to building an e-Commerce business. Definitely not with the drop ship lifestyle model. Your reason and your why should be the end results, in my opinion, for your lifestyle. Because we'll talk about this more as I go through the questions I put together, but a big thing that we need to do, even me, when I'm building new stores, and that you'll need to do as you build your first store and more stores, is be able to get to a place where you can delay gratification. Where you can do the work for that future outcome.

So if you're starting this, because again, you're a graphic designer and you think, "I love graphic design." Well, that why isn't going to help you when you're calling suppliers trying to get approved, when you're setting up your Google ads, that's not a reason for you to build a business. It could be helpful. I'm not saying it's not helpful, but that's not the reason you'll make it work. The why, in my opinion, should be the end goal. What do you want out of your business? Because once you know that it can help you push through all of the challenges that can and will come up.

Now, another thing that I think is important to ask yourself is, do you want this to become a full time business? Or do you want it to be a side hustle, something you could do on nights, something you could spend your weekends doing? Because there is a difference for how you can set up and structure your company. And there's definitely a difference for how you'll hire. So back when I first started, I really didn't know what direction I wanted to go. I knew it would be my full time income, but I didn't think, do I want to build and become another company like Wayfair, or back then they were CSN Stores or Hayneedle, these companies that do billions of dollars in sales, but have hundreds of employees.

Now, obviously if you're trying to build that, which you can, you will be working a more than full time job. So I think it's important in the beginning, as you're laying the foundation, you think about your different paths you can go. Do you want to try to build some publicly traded company in the next five years maybe? Or do you want to build it as a company that you and maybe a team of two to five virtual assistants can run and build something extremely profitable?

Because again, the way you build systems, the way you build your business, the way you hire, is going to be different depending on which path you want to go. So I think it is important to think about that early on and not get yourself in a position where you're almost accidentally, or just not doing it on purpose, but going the route of a company that would take hundreds of people to support. Think about that before you build, because it will help you to think how many stores should I build? How should I build them? What type of people should I hire? And again, this is all covered in my drop ship blueprint program, but something I think everybody should think about.

Now, next question that's super important is are you willing to sacrifice what it takes to make sure that your business is successful? So sacrifice is, it goes hand in hand with business, whether it's drop shipping, whether it's anything else, but in the beginning, again, maybe your first 30 through 90 days, maybe more, are you willing to sacrifice your evenings, your weekends? Are you willing to be at the computer, doing the work that's going to pay off in the future rather than watching a football game or going to the farmer's market or binge-watching some random new series on Netflix? You need to be able to do that early on, and sacrifice is real. It's going to feel painful, especially if you're not used of doing work and not getting paid for it. But that's exactly what business is when you first start. You don't start your business and start clocking your hours and at the end of your week one, bill yourself for 20 hours of work. Instead you do the work, you do the work, you do the work. Then things start to work. Then they work better. Then they work even better. And then what you did in the beginning pays off for years and decades.

So you got to be willing to sacrifice. Also something that I think everybody should think about before they get into this is, how do you deal with complaints or things that could bring on stress in your life? Because this is something I realized early on, but when you open yourself up, your business up to the world, which is what you're doing online, you're going to get all type of people that buy from you. You're going to get some amazing people that are completely pleasant to deal with. You're going to get some people that are entitled, that you are going to have to be nice to, because that's business. You're going to have some people, and this is one I didn't expect when I first started, that are literally just like unstable. And these people, usually they don't even buy, but they might send you some really sick things like on live chat or via email. And yeah, it's definitely disturbing. It's still disturbing now. I shouldn't say it goes away, but especially in the beginning, when you see some of these things that people might say or comments, it's weird.

And for some people, it might be enough to think like, "Okay, this is scary or creepy or weird. I'm done. I can't deal with this." So it's important to know again, before you go in, you're going to have issues where sometimes customers, maybe rightfully so, maybe not rightfully so, but they're angry. They send you angry emails. How are you going to respond to them? Are you going to be positive and try to solve the problem and get rid of them really as soon as possible? Or are you going to be combative and just drag it into something bigger than it needs to be? So think about that. And again, plan for it.

And again, you're going to have some strange people that come into your world, mostly via email and live chat, and how are you going to deal with them? What we do is not even respond, just block their IP address, and they're gone. And what's funny is, I know, I've seen this, I did an episode, I don't even know, maybe last month or two months ago? About real world customer service issues the way I saw somebody freak out at a bakery, where were we, in Hilton Head in South Carolina. So it does happen in real life too, but I feel like it happens even more so online because we're literally just like, there's no storefront to walk in. It's literally go to our website and people can say whatever they want. So keep that in mind.

Another question you should ask yourself is how do you react to failure? Because business is a series of failures. Everybody needs to understand this, internalize this before they start. I've failed, I can't tell you how many times When I started, as I grew, today, there are always failures, but what I always do is learn from the failure, fix whatever I could fix, take away whatever I could take away, and move forward. So it's hard to even give examples, because as you build your first drop shipping store, you're going to fail along the way. Call them micro failures. Maybe you'll say the wrong thing to a supplier and they'll reject you. Maybe you'll set up your Google Merchant Center Account the wrong way, and it'll be suspended for a month. Maybe you'll mess up your ads the first time you create them, and you'll spend 500 bucks on ads that when people click go nowhere. Maybe you'll ship an item to a customer that the item shouldn't have went to.

There's going to be things that come up, and they're going to be stressful, especially if you're new to this. So think about how you're going to react when these things come up, and when they happen do not beat yourself up over them, do not take it to the point of, "Okay, I messed up. I'm depressed for a week or I'm shutting this all down." Know mistakes will happen. And know the best thing you can do as a business owner is learn from them, improve them, and do better the next time. That is what business and really what life is.

So another thing, we hit on this a little bit before, but really think about what your expectations are before you start. So when I was talking about, do you want this to be like a side hustle or some massive conglomerate, publicly traded company, think about what you want out of it, and when you're setting goals, whether that be revenue, net profit, whatever it is, set them, but be realistic. Don't just think, "Okay, I'm getting started. I'm smart. I'm going through Anton's program, the Drop Ship Blueprint. I'm going to make a million dollars this year." Be more realistic. Maybe the first month, the first three months you're going to be working on this 10 hours a week. "Okay. My goal is after three months to make $4,000 net profit. Maybe my goal after six months is to make $6,000 net profit." Whatever it is, but set those expectations. Don't just go in, and also don't do it the other way too, of going in and not having any expectations and just thinking, "We'll see what happens." Because that's not going to work out for you. You need some type of goal, so you can see how you're doing against it. And again, adjust accordingly.

So, if you set a goal and you blow past it, great. Level it up. If you set a goal and you don't hit it, again, don't think of that as a failure. Think of that as, "Okay. What didn't I do that would have allowed me to hit my goal?" And then adjust from there? Another thing that's really important is to always know in the beginning, when you're building a drop shipping business or anything else, you're going to be delaying your gratification. So when you're giving up those nights and those weekends, if you're already working 9:00 to 5:00, when you are, 30 days into this or 60 days into this, and you maybe made one sale because you've been doing the background work, it doesn't feel like you're getting paid for your time, all the hours you put in leading up to that. But like I said, that's not where the results come from. The results aren't from, "I got my first sale based on my last 30 days of work." The results come from month two, maybe now you're getting a sale every other day for a thousand bucks. Maybe month three, you're getting a sale every day. Maybe month four, you're getting two sales a day. So everything you do in the beginning, know you're delaying your gratification so it can build on itself over time.

Finally, one more thing. I actually got this from the book The Four Hour Work Week, which everybody probably knows I love, got me started on e-commerce way back in a day. But one thing that Tim Ferriss talks about in that book is think about your worst case scenario. If things don't work out, what does your life look like? And the good thing, I guess for us, because the businesses we start have next to no startup costs, is it's really nothing changed. But do think about that. Because sometimes as you go on and on and on, you might be thinking like, "Okay, if this doesn't work out, I wasted," in your opinion, maybe you wasted again, "30 days of trying to get things set up and it didn't work out." But is that the worst case? Even if you gave up, which like we talked about, redefine failure, just pivot, and figure out what you did wrong, but even if you spend 30 days getting everything set up and then you decide, "I don't want to do it." Well, what's the worst case? You spent $29 on Shopify. You spent $12 on a domain name, and you have a new skillset where you can build a website.

So always think about that. But again, in my opinion, don't go into this, if you're thinking about giving up, or that you're going to give up in 30 days if you're not making a ton of money. Again, realistic expectations, delayed gratification, and being willing to accept all of these little micro failures as learning experiences so you can get better. Because like I said, even with our program, which is the best program in the world, the Drop Ship Blueprint, you can learn more at, I'll link it in the description. Even with that step-by-step sequential videos, there will be little mistakes and errors along the way. And the way to win is to know your why, and to overcome them when they arise. And you will do just fine.

So I don't know, guys, I hope you found this episode helpful. Again, I just wanted to put my spin on what the bakery owner presented to us. And at first I was thinking like, "Wow, all these people, including us, paid to be here in that bakery class. And basically everybody walked out with like their heads down, giving up on their dream." But I think that's better than the alternative, better than everybody there quitting their job that's making them a ton of money, going into that full time only to find out three years later, in that scenario, they're not making any money and they need to start over.

So again, I think there's a massive upside between what it is we do, our online businesses, specifically with the drop ship lifestyle model, but I still did want to cover those questions that I think you should ask yourself before you build a drop shipping business. Because I do think as you build, as you grow, as you fail and learn, they will help you make sure you get to that success rather than giving up after a year and going back to whatever normal used to be.

So if you got value from this episode, guys, do me a favor, go to Apple Podcasts and leave a five star review. I read all of them and I really appreciate them. I will leave a link for that in the description as well. So thank you. I appreciate you. And I will talk to you in the next episode of the podcast. See you.