In this episode of the eCommerce Lifestyle podcast, Anton shares the top 10 mistakes that dropshippers make when first getting started. So buckle up and get your pen and paper ready!
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Hey, what's up, everybody? Anton Kraly here from ecommercelifestyle.com. Welcome back to the podcast. If you're new here, just know this is our biweekly show. We have new episodes every single Monday and Thursday, and they are all designed to help eCommerce entrepreneurs to increase their revenue, automate their operations, and become the authority in their niche. If you're not subscribed to the podcast yet, go to whatever podcast player you use search for eCommerce Lifestyle, click subscribe, and you will always get up to date episodes.
Today, we are talking about the top 10 mistakes that drop shippers make when first getting started. This isn't just based on me and mistakes I've made, even though I've made a ton of them, probably all of them, but it's also just what I've learned by working with over 10,000 students now, from over 50 different countries. That's through my program Drop Ship Lifestyle.
But what I see there from people that come into the program as beginners is a lot of them have tried something in the past when it comes to drop shipping, but they've made some of these common mistakes that lead to no results, surprise, surprise.
The goal of today's episode is I'm going to share these top 10 mistakes with you. Hopefully if you're currently making any of them you stop, or if you decide to go ahead and get started with drop shipping, ideally with my company, Drop Ship Lifestyle, then you won't make these mistakes and you can just hit the ground running from day one with the best chances of success.
With that being said, let's go ahead and get into mistake number one, which is choosing the wrong niche and not being able to get consistent sales. Niche selection is the foundation of everything. Think of the foundation of a home, everything that's built on top of that is going to survive or crash based on that foundation. The same thing is true when it comes to what niche you get in.
If you choose a niche that doesn't work with drop shipping, then no matter how good everything else is that you do after that, or think of it as everything you do that builds on top, it doesn't matter because the foundation, the niche, won't be stable to support it.
When we're doing niche research, we put a ton of time into it. We do look for four specific pieces of criteria to get started with validating our niche. I'm not going to go through them all right now, because it would take me 30 minutes, but if you don't know that set of criteria we look for, I would highly recommend you go to dropshipwebinar.com after this podcast, I'll link into the description. Again, dropshipwebinar.com and you get a free training from me there where I show you how we validate our niches to make sure we have a solid foundation. But that's mistake number one.
Mistake number two is working with middlemen instead of real suppliers. This is super common and it's something that's going to lead you to not making money. When I say middlemen, I'm talking about distributors or these companies online that say, pay us X amount of dollars per month and we're going to give you access to this bundle of products or this catalog of products.
Those distributors and those middlemen, all they're doing is making money by first charging you for access, and then by marking everything up between the brand that makes them and between you, the seller. That is a middleman.
When you work with middlemen, you're not going to get the best pricing you can because they need their cut. Because of that, the margins are almost nonexistent. There's also a bunch of other problems with middlemen. You're not going to get the best service you can get. You're not always going to get up to date products that are literally what people want right now. You're going to have delayed shipping times. You're not going to have price controls. There's just a ton of problems with it. But a big mistake, again, number two, is working with middlemen instead of real suppliers. Make sure you do not do that. You want to become an authorized retailer for the brands that you sell for. I teach you step by step how to do that in my award winning program, the Drop ship Blueprint.
With that being said, guys, let's go ahead and get into mistake number three. This is incorrectly pricing products and not understanding how that would affect traffic and sales. I just mentioned in the last mistake that when you work with middlemen, there's no pricing controls. What this means is these suppliers, or these distributors, might send you price lists and say, here's your wholesale cost for all of these products. Then you might think, cool, here's my wholesale cost, let me add 20% or 30% or 50% or 500%, whatever. But people do this from a place of almost just guessing. They don't know their numbers before they actually start getting sales.
Not knowing your numbers is a quick way to lose money and to really be doomed to fail before you even start. When it comes to pricing products, again, we look for a very specific type of brand to work for where there are pricing controls, and we can make sure that every sale is profitable, even from day one.
Again, I do teach this in detail in my program at, The Drop Ship blueprint, But if you want an introductory level to what we look for, be sure to go to dropshipwebinar.com after this podcast for that free training.
But that'll take us right into mistake number four, which is building an unprofessional and boring website. If I look back to the first website I ever built back in 2007, it was extremely unprofessional and it was about as boring as they can come. But this is something that when you're first getting started, you just don't know what you don't know, and a lot of times you don't have the money to invest with a web designer, which, by the way, I've done a podcast about this. 99% of the time, I wouldn't recommend doing that, especially for your first store.
But when you basically have this first store, it's not built to optimize conversions. It's not built to instill trust in your website visitors. When you have a site like this, you send traffic, meaning website visitors to it. Yeah, it'll get traffic. Yeah, it'll get sales. But once you realize what you could have done better from day one in terms of web design, you realize how much money you had left on the table over however long it took you from when you built this unprofessional looking website to whenever you paid somebody to clean it up for you.
I do want to mention too, when I say I don't recommend hiring a web designer or anything for your first store, that's because most of these web design companies out there they'll charge you $10,000 minimum. A lot of them, it's 20, 30, $50,000. There's no reason to pay that much before you ever build anything. We do have a program in my company, Drop Ship Lifestyle, it's for members only of The Drop Ship Blueprint, but we have a program where we will literally build your Shopify store for you. We get it set up for an extremely reasonable price. It's something that I would recommend to doing from day one. If you feel like outsourcing web design and you can afford to pay somebody to do it for you. You'll get a really good price and value for a professional look that converts from day one.
Again, though, that web design service is only available to members of The Drop Ship Blueprint. If you are a member, just log into your members area, click on web design, and you can learn more there.
Mistake number five, this is spending money testing products. You see people talk about this all the time. I so disagree, but I think the worst idea is to build a Shopify store, find suppliers, upload everything, just create everything you need, get your Shopify payments set up, do all the backend work, only to try to spend money on ads and hope it works. I think this is a terrible idea. Do not spend money testing products. Do your research before you even think about making a Shopify account and know if it's going to work with confidence before you spend any money on ads.
This leads us to mistake number six, which is not knowing which platforms to advertise on. Huge mistake that drop shippers make when they're first starting out. Again, you just don't know what you don't know. We use a mix of about six different traffic sources primarily, and the way that we divert our budget between them is based on what brings the most sales and the highest return on ad spend to drop shipping stores. I would highly recommend, again, if you are thinking about doing this and serious about it, go check out my program. You can learn more at dropshiplifestyle.com, and in module six, which is all about traffic, we have in depth, just over the shoulder trainings on exactly how we use different traffic sources and how we set them up.
I'll tell you, number one is Google. But again, we use a mix of six primary traffic sources that make us money and bring in most of the sales. It's six now, over the years, I've tested dozens of platforms and there's been plenty of them that haven't done what I would hope they do. There's a lot of them out there, and there's a lot that don't work, at least not for making a good return on ad spend.
This takes us in to mistake number seven, that drop shippers make when first getting started, and this is not tracking sales and understanding where their sales are coming from. Again, I've made this myself. You need to know from day one when somebody buys with you with a high percentage of accuracy, where did they come from? Meaning did they find you in a Google search results? Did they click a Google shopping ad? Did they click a Facebook ad? Did they click an ad in an email? Did they find you on Bing? You want to know where every sale is coming from.
At this point, you can't be 100% with everything, but you want to get as close as possible to tracking every sale to where that person came from so that you can then do better with your ad spend and get more people to come from where they already are. But a big mistake is not tracking from day one and not knowing what's working and what is not.
This takes us into mistake number eight, which is doing busy work instead of automating it. Again, a lot of people that get into drop shipping and eCommerce, this is their first business, or this is their first online business, and they start the business, of course, from day one, they're doing everything themselves. Then orders start coming in and orders start being processed and customers start emailing in asking if something's in stock or if they can order and get a discount or how fast something could be shipped. All of these day to day tasks pop up in the business, because now you have a business, you have customers.
What a lot of people do is just do it themselves and eventually spend maybe two hours a day or three hours a day or four hours a day doing a lot of these mundane, repetitive tasks. My advice and what I teach in module seven of The Drop Ship Blueprint is as soon as this takes off, and as soon as your store is profitable, it is time to automate and outsource. Some things that I teach you how to do are use different apps and free tools to make this as automated as possible so a human isn't needed. But for the things that a human is needed for, I also show you how to hire and get some great help on your team to work with you so you can focus maybe 15 to 30 minutes a day on growing the business instead of doing the busy work that comes with the business.
This leads us into mistake number nine, which is neglecting to build a real brand and the neglecting to think longterm. Again, unfortunately at this point where we are... Where are we? Almost at the end of 2020, a lot of people still think of drop shipping as, I'll try to build the drop shipping store and I'll see if this works and they don't go into it thinking of it as a real business or how they're going to build a real brand around their store.
Maybe they just, again, try to test products and throw up a not great looking website and don't take care of their customers. Then it just burns out a few months later and they're like, well, that didn't work. It's like, yeah, it didn't work because you didn't think of it as a real business, as a real brand, and you didn't plan for the longterm. That is definitely a mistake a ton of people make when getting into drop shipping.
This brings us in to the 10th mistake of this top 10 list, which this episode's getting pretty long for an eCommerce Lifestyle podcast. I also talk fast, but I could tell this is a longer one. But the final mistake that I wanted to share with you on this list, number 10 is using drop ship supplier directories and drop shipping from China.
I can't tell you how many people we have in my company, Drop Ship Lifestyle, how many members, that are success stories that have previously failed when trying to drop ship from China. We see this over and over again. And again, the reason they failed originally before they found us, isn't because they weren't smart, it's not because drop shipping doesn't work, it's because they chose the wrong niche, they tried to drop ship from China, they tried to test products, spending money on ads, and they didn't make any money.
Then they come to Drop Ship Lifestyle, they follow our method of selling quality products from quality suppliers that ship fast, and they see results like that.
Those are the top 10, guys. As always, I hope you found value in this episode. If you want me to go deeper into this, again, give you that criteria we look for when choosing niches and show you how to find real suppliers, I would highly recommend you check out my free two hour training. You can go to dropshipwebinar.com to get that. I'm going to link it up in the description as well. That's where you can get the same exact tips that have helped over 10,000 of our students cut their learning curve in half and build highly profitable semi automated stores.
As always, thanks for listening. If you're not subscribed, click that button and I would really appreciate it if you can also leave a review on Apple podcasts, if that's where you listen, means a lot and helps us get the word out there. Thanks again. I appreciate you. I will talk to you on Monday in the next episode of the eCommerce Lifestyle podcast. See you.