eCommerce Lifestyle
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The Biggest Dropshipping Opportunity in 2022

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Episode 319

Podcast Description

If you don’t do this in 2022 you are leaving money on the table.

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Transcripts

Hello everybody, Anton Kraly here from dropshiplifestyle.com, and I just wanted to turn my camera on real quick, record this video for you and share what I believe to be the biggest drop shipping opportunity for 2022. And this is something that if you're not going to do I really believe you'll just be leaving money on the table. Also, the beauty of this, I'll share it in just a minute, is it can take you five minutes to set up and once you do that's it, you are set, this isn't something that's a six month long execution project. You could do it right away.

So the way I found this is I'm just doing some research now for our team meeting, we do quarterly meetings every year where we get together and what we do is talk about what happened in the previous quarter. We review the data from inside our businesses, but something else that I like to do is look at industry wide data, and then I try to kind of marry them together, right, what are we seeing with our businesses and what's the industry seeing, and what's the economy seeing, and then we make educated decisions off that. And that allows us to kind of see into the future a little bit and make better decisions than most stores. So by watching this or listening to it you get to be on that ride as well.

So this literally I just came across a couple minutes ago, want to turn the camera on, get this out to you. I'll pull this up now. What I'm looking at in case you're just listening is the personal savings rate in the United States, and it is a graph that represents that. And this is showing it from June, 2015 to June, 2021.

Now just so everyone is on the same page here personal savings rate is calculated as the ratio of personal savings to disposable personal income. So how much money do people have to spend versus what they actually save after they pay for everything they pay. Now, if you could see this you'll see the severity of this, but if you're listening I'll kind of explain it to you.

From June, 2015, the personal savings rate, again U.S. specific, hover between high sixes to mid 7%, so very low but kind of it is what it is right? Then in January of 2019, saw a little spike and the spike there went up to about 9%, that was the highest. Then it went back to its normal kind of 7% baseline. And then in March and April of 2020, you know what happened there, if you don't I don't know what you've been doing the past couple years, but it shot up to 13.1% in March, and then in April of 2020, it went up to 33.8%. Then it slowly went back down, dipped to 13%, and then again we'll go back here and we'll move to March of 2021, it ballooned right back up to 26.6% and then it went back down and now it is back at its 7.3 baseline.

Okay. So what does this mean right, how does this have anything to do with the biggest opportunity in drop shipping for 2022? Well, if you currently run a store then you most likely know this past year has been amazing in terms of sales, in terms of profit, in terms of just how easy it seems to be to get people to buy. And the reason in my opinion, or one of the reasons, is because people had extra money, they had extra savings. A lot of the times that savings was given to them by the government, but they had that money and they were spending it as you can see by the savings rate going back now to the baseline of about 7%.

Now this isn't only government giving out money to people, this is also people literally being locked down and not spending money on travel and excursions, and gas to get to work, and all new work outfits and going out with coworkers, they just basically had more money saved. But again, what this chart clearly shows going up to November of 2021, or October I should say of 2021, is that, that money, that savings, right, I'm doing air quotes here, that savings that was in people's accounts is now gone. So how does this affect drop shipping? How does this affect us?

Well, what I believe is that all these people that have been spending all this money, they're not going to want to stop, okay? People get into this mindset of, oh yeah, I've been buying, I've been buying, I've been buying. They want to keep buying. But now the majority of people don't have that extra money anymore, that money is gone. That money is spent, the stimulus is over.

So what are people going to do? Are they going to stop buying? Well, no people are going to use their cash they have, they're going to still work hopefully and get money to spend. They're going to use credit cards. They're going to use PayPal. But what I believe the biggest opportunity is, is to give these masses of people that spent their savings another way that they can buy, even if they don't have credit cards or even if they don't want to start building up credit card debt. So the way that we do this already, but again, if you're not doing it you should start, is by offering pay overtime options to your customers.

Now, there are a few different ways to do this, there's different options out there. The easiest one would be if you already sell on Shopify, which I obviously recommend by the way, free trial link in the description. But if you sell with them and you accept payments via Shopify payments then by clicking a button in your account in the admin panel you can accept payments via what is known as Shop Pay Installments. Now the way this works if you enable it on your Shopify store is when the customer is checking out they're going to see the option to pay how they would normally pay right, credit card, debit card, whatever else you have listed there, or they can choose Shop Pay Installments. Now this is available to finance orders from between 50 and $3,000. So when they first launched this I think the ceiling, the highest price was a thousand. We do high ticket e-commerce so we need more, but now you're covered up to $3,000 bucks.

And the way this works is if the customer wants to choose this then they can make payments over time. It could be broken up into four installments, and as long as they pay it off in those four payments then they don't have extra interest and all these extra fees associated. So the beauty of doing this and giving customers this seamless, easy way to pay is again, the people that are now in that spending mode, that have been spending for a year and a half, that have depleted their cash reserves, if they still want to spend, which they're going to, and they search for whatever products you sell, let's say a standup desk, and they find your competitor store and they find your store and your competitor doesn't give them an option to finance their order but you do, they're going to choose you every time. Because again, they want the ability to buy what they're used to buying, but be able to pay it off over time.

So this is definitely something you want to do if you're running a store or thinking of running one. Again, if you're already using Shopify you just enable this in your admin panel. It's simple to set up and people can start paying like this.

Now you might be thinking, well what am I going to do, right? Do I get my money? How does it work? It works the same way for you as the seller as if a customer used the credit card or a debit card. The money goes into your account, usually within 48 business hours, and then they pay it off to Shopify. So you need to wait on payments to come through. You get the money, Shopify in this case finances it.

Now let's say you're not using Shopify payments, or you're using a platform other than Shopify. Obviously you shouldn't be doing that, but if you are and you want some other options the ones I would recommend you look into first are Klarna, and I'll pull these up so you could see what they look like. And the next one is Affirm. Now when you are first getting set up, again, if you're using Shopify payments, just use Shop Pay Installments, there's no brain power that needs to go into this. You don't need to think about options here because I would rather have the seamless integration over everything.

But if you are using a different platform and you need a solution check out klarna.com and apply with them, and check out affirm.com and apply with them. Now they work the same way except they're not built in natively to the e-commerce platform. They have apps on Shopify if you wanted to plug them in there. But yeah, three options for you. They all work.

And again, where things already are, I can't even say anymore where things are going, but where things already are in terms of disposable income, cash on hand for people, this is what you want to do to continue those sales to stay up and to have an amazing 2022 because again, if you offer this and your competitors don't when people are comparison shopping they're going to choose you every time. So go ahead, get this set up. I'll post relevant links below.

As always if you got value from this episode be sure to leave a like. If you're not subscribed yet click that button. And if you want to know exactly how we build highly profitable semi-automated stores be sure to go to dropshipwebinar.com, I will link that up in the description. So thank you, appreciate you, and I'll talk to you on Thursday for the next episode. See ya.

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