What happens when your dropshipping suppliers offer too many products?
Anton answers that question in today’s episode of the eCommerce Lifestyle Podcast.
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.
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What's up, everybody? Anton Kraly here from ecommercelifestyle.com. And welcome back to the podcast. If you're new here, just know the show comes out twice a week. We have brand new episodes every single Monday and Thursday morning that are all designed to help e-commerce store owners to increase their revenue, automate their operations, and become the authority in their niche.
Now, today's episode is going to be speaking specifically to everybody out there that is either just getting started with drop shipping, specifically the method I teach at dropshiplifestyle.com, or even people that already are up and running and drop shipping, but are doing what they should be doing and constantly trying to find new suppliers to work with, constantly going for more and more supplier approvals. And then find themselves in that situation where they get approved with a new supplier, but you suddenly realize that they have a ton of products. This might mean 100 or hundreds, or even sometimes thousands or tens of thousands.Now, some of the questions that can come up there and that often do, first of all, is what if a supplier gives you this product list and some of those products are not in your niche? So for example, if you sold, I don't know, let's say you sell sofas. That's your niche. You sell couches and you get a price list from a supplier and you realize they also offer home theater seating. That would be an example of too many products for what you needed. Another example would be what if they send you their price lists and, again, everything you have access to sell, and you realize that some of the skus, some of the individual products they offer, are not in your target price range.
Now, I guess I should explain what I mean by that real quick, but with the method that I use and that I share at dropshiplifestyle.com, we focus on selling high ticket products. And what that means is an average order value of $200 or more. But with that being said, if the items are large and heavy, they should be well above $200, because then you have to factor in shipping costs and the numbers just need to be higher to make sure your margins are there. So let's just say, again, you sell sofas. You get a new supplier, they send you their price list and you see most of them are like a $1000 to $2,000. Okay, great. You know your margins are there. But what if they have some futons mixed in that are $200? Well, those are ones you wouldn't want to sell because once you factor in shipping, the money's not there
So, that's kind of where I'm going with this episode. But what I want to do is just give you the first thing you should do whenever you're approved with a new supplier, and again, they send you their price lists. Now, ideally, they're sending it to you either in an Excel document, Microsoft Excel, or they're sharing it via Google Sheets, either way, typically they're either an Excel file or a CSV that you can go through and sort in Excel, in Google Sheets, in Apple Numbers, whatever you prefer. But what I like to do, as soon as I get this new price list, is actually sort it by price. And I sort it by the MAP price, minimum advertised price, which is what we would be selling it for.
Before I go further, I'll just say, if any of this is already above anyone's head, don't worry. Totally fine. Everybody has to start somewhere. And if you want an in-depth, I would say, explanation on how this all works, the best place to get started is at dropshipwebinar.com. So that's D-R-O-P-S-H-I-P webinar.com. And I will link that up in this description.
But, moving forward, what I do is I sort it by MAP, minimum advertised price, again, what we would be selling for, and then I look to see what products might not be in our price range. So let's just say it was that sofa example, and I wanted to only sell sofas that were maybe, I'll just make it easy, it would be a little bit lower than this, but let's just say it was $1000 or more. What I would do is look at all of those products, all of those skus, the individual products from that supplier that were under $1000. Now, the first thing I would try to do is identify, are any of these products not sofas? Are any of them maybe accessories? For example, maybe, ottomans, or maybe pillows for the sofas. And if I saw products like that, then what I would do is think, "Where can I use these as cross-sells for the more expensive products?"
So let's just say again, hypothetically, most of the sofas on this price list from supplier ABC are above $1,000, but I noticed they have a whole bunch of different pillows that are about a 100 bucks each. Well, because those don't meet my pricing criteria, I wouldn't sell them as standalone products. What I would do is make a note that I'm going to have them as cross-sells on my sofa pages. So if somebody wants to buy $1000 sofa, I would give them the option, "Do you want to add these blue pillows?" Whatever it is. If they want to add it, and maybe the price goes up 100 bucks or whatever it is. So that's what you start to do with products that don't fit your criteria because the price is too low.
Now, let's say something else that can happen as you're going through this price list that you have sorted by minimum advertised price, maybe you see a bunch of products that are in your niche. So let's just say the sofas, but those are well under a 1000. And let's just say, there's a bunch of them, maybe 20% of that supplier is catalog that are between 200 and $600. So what do you do with those? Or what would I do? I just simply would not list them. And it's fine. It's something people kind of get held up on. They think if they get approved to sell for a supplier, AKA brand, then they automatically just by default have to list all their products. You don't. So just know that that's what we do. If the price points just don't match what we need to make money, then we simply just list that subsection of products. We don't list the products from that supplier in that lower price range. We'll simply only list the ones that meet our pricing criteria to make sure we can make our margins. So if margin's not there, again, just don't upload them. It is not an issue.
Now, the other thing that you might find and does happen from time to time, not by any means the majority of the time, but it will come up, is because we build niche specific stores, meaning we sell one product type per store, we do run into situations where we will get approved to sell for different brands. And we'll see that, again, the sofa example, they have maybe 100 sofas that we could sell, but they also have 50 different pieces for home theater seating. Different configurations of recliners for home theaters. So in that situation, then what do you do? Again, if they offer too many products, products that are not in your niche?
Well, what we do is first of all, do not list them. You don't want to start mixing everything together on one store because what that leads to is lower conversion rates, confusion, it kind of takes away from you being an expert in your specific niche. So in that scenario, what you simply want to do is go to your niche tracker spreadsheet, which by the way I give to everybody in Module One of the Drop Ship Blueprint. Again, if you want more information on that, I will post the link on how to get enrolled in the description for this podcast. But what we'll do is go to our niche tracker spreadsheet, and then we'll add in as a new possible niche, home theater seating, and in the note section, we will say access to however many products. So access to 50 products from supplier ABC.
Now, what are we doing with that information for now? Well, nothing. It's just there. It's being tracked. That's why it's in our niche tracker spreadsheet. And then let's just say maybe three months from now, six months from now, a year from now, whatever, we decide, we want to build store number two or three or four, whatever it is. Well, what niche are we going to get into? Well, maybe we'll go into home theater seating, because at that point three of our existing suppliers already offer home theater seating, we already have access to these suppliers and these products and really all we have to do is build a new store.
So again, the main thing is don't list what is not in your niche. If your supplier offers too many products, if the products are not related, add them to your niche tracker spreadsheet as something to possibly build a store in in the future. If the products are in your niche, but the price point isn't where it needs to be for you to make money, simply do not list skus, those individual products, and if some of the products, your supplier offers are lower price, lower ticket items, but they make sense as cross-sells on your existing store, then use them as cross-sells to increase your average order value and make more money.
So guys, I know this episode might be a little bit advanced again for anybody just, "I just want to build a business and create an income online." Then, yeah, that's totally fine. You don't need to really overthink any of this yet. You just need to get started. And the best place to do that is at dropshipwebinar.com, which again, I will link in this podcast description. So that's going to be it for this guys. As always I hope you got value. If you did let me know by leaving a review over on Apple Podcasts. I will link up how to do that in this podcast description. And with that being said, I will talk to you on Thursday morning in the next episode of the eCommerce Lifestyle Podcast. Thank you everybody.