So I have to confess: by the time I started my dropshipping journey in 2017, I was already self-employed with my lead generation business which is still my #1 money maker.
I simply wanted to see what the eCom fuss was about and I'm the type of personality that likes learning new things. I'm also a big believer in diversifying my income.
I feel I'm more qualified than most when it comes to judging internet-based businesses because I've already reached 6 figures in few different models.
But I'm always open minded to checking out other businesses that can take me to my goals faster.
What peaked my interest about dropshipping was exploring the potential of Facebook's paid traffic.
Ya see, with my lead-gen biz, I'm generating all my traffic for free by ranking organically in Google.
Its amazing once you rank because its so hands-free and consistent, but it does take some up-front work & time for these websites to rank.
The advantage of paid traffic is that you can turn on traffic with a snap of a finger.
& Scaling is as easy as increasing ad spend they say...
I was determined to get to the bottom of it.
And I spent the money & time to figure it out, believe me...
Now I know a lot of people go into stuff with a half-cocked mentality. The kind of people that run into their first obstacle and decide, “Nope, this isn’t for me”
In my experience, every business I started requires hard work, grit & determination at least in the beginning and certain periods throughout the year.
If you're not passionate about being an entrepreneur, you'll look to throw in the towel the first sign of adversity and you'll jump onto the next shiny object, the next "magic pill".
Let me say that what I share on this site is not for those people. I'm all about transparency which means telling you what you need to hear, instead of what you wanna hear. Tellin' it like it is.
Yes it takes hard work & consistency to build a business, just like building an impressive physical physique.
Dropshipping is no different, despite so many guru's trying to tell you otherwise.
In this article, I'm going to cover all the steps involved with creating a successful dropshipping biz and the hardships I faced a long the way so you can be prepared with the right mindset & know what to expect if you decide to start your own.
I'll also answer some critical questions that a lot of guru's don't cover such as:
Is dropshipping still a great business to get into in 2020?
I have my opinions.
So what’s first?
What Type Store Should I Build?
First thing’s first. You need to figure out what type of products you want to sell. Now, there are three types of stores you can build and it's going to be totally up to you.
- Niche Store - These types of stores would have you picking a niche like camping and adding all sorts of camping products. Tents, lights, sleeping bags, backpacks, etc.
- Super Niche Store - Now this type of store takes it a step further. With a super niche store, you’ll be adding items for a VERY specific need. So let's say our niche would be camping, but our Super Niche (items we would sell) would be camping cookware. You’d add products like camp grills, folding utensils, collapsible bowls, etc.
- General Store - A general store is exactly what it sounds like. It’s a general store with a generic name that's not niche specific. Using this type of store will let you float different products in every niche to see which products convert the best.
Now, considering I was a newb coming into this and didn’t have a clue if the niche I would pick would have any products that I could actually sell I decided to choose to build out a general store.
Picking a Domain Name
After choosing what store type you want, you’re going to need a domain name where your store can be found in Google. For me and my general store I tried to be creative and came up with the name “Cattywampus”. Can you believe that domain name was taken? I had to settle for shopcattywampus.com
When you first log in to Shopify you’ll have to enter your email, create a password, and decide on a store name. (this store name doesn’t have to be what your store to be recognized as)
After that, a screen will show up asking you a little info about yourself. (If you're new then just pick the options that say your new and move on)
Once you get past that screen you’ll be taken to your shop dashboard. Now, in my opinion, I believe it's best to move fast in getting your store up and running so instead of waiting to get a domain name, go ahead and pick one and get your site up and going before you start the build-out.
When you're at your dashboard you’ll see on your left the tap “Online Store”.
Once you click it you’ll see a drop-down and you’ll want to click on “Domains”
On this screen, you can click “Buy Domain” to buy a new domain name for your Shopify store and connect it. (If you have a domain already then click the “Connect Existing Domain” tab on the left.
Now you should have your domain connected to your Shopify store. (I know this isn’t glamorous, but it's still part of the process in setting up your online store)
Alright, by now you’ve got the foundation laid out. You know what type of store you’re going to build and you have a domain name connected to your Shopify store. Now time for the fun stuff.
Choose a Theme
Shopify has all sorts of themes (website layouts) for you to choose. Some are paid and some are free. It’s important to note that I used a free theme for my first store. To pick a theme you’re going to click on “Online Store” and choose the “Themes” tab.
I chose the Debut theme for sheer simplicity's sake. I think its the default theme that Shopify selects for you. Once you select your theme you’ll want to click “Customize”
Shopify has a great platform enabling beginners to look like web designers fairly easily. From this screen, you’re going to add your logo in your header, add photos and text overlays, and design your overall site layout. (I won’t get to in detail in this simply because Shopify has made this so simple to do that you can figure this out in a matter of minutes)
After an hour of work on creating some photos and writing some copy, I’ve got myself a website!
Add Some Apps
Plain and simple: Apps help your site convert by providing a sense of trust and value.
In my store, I used just a few apps, but I'll share them below:
- Free Trust Badge - This app adds a widget underneath your product title that shows payment methods that are accepted
- Privy Free email popups with exit intent - I used this app to provide value. You can activate a spin wheel pop up that offers visitors a chance to get a discount or free shipping in exchange for their email address (future marketing opportunity)
- Countdown Timer by POWr - Using a countdown timer adds a scarcity type feel to your offer. The majority of your traffic is coming from a facebook ad and you’re always going to be pushing the word “sale” so having a sale countdown timer urges the customer to act now rather than waiting.
Picking Products to Sell
This is the part that many people have a hang up on when trying to make money with Shopify. No matter what course you take online, this part is up to you. You’ll have to figure out what products are hot and which are not.
Luckily, there are a few hacks to help narrow down what’s selling in the market right now.
I outsourced my products from a site called AliExpress.
This site has almost any kind of product you could want and allows you to buy individual items at a wholesale price. The rule of thumb here is to mark up your product by AT LEAST 100%.
Now I’m sure you guys have all heard the baby shark song and noticed how it took the States by storm a few months ago. Well, I wanted to capitalize that craze with an online store and sell items that resonated with people that were in some way connected to that song. I still can imagine parents are haunted by their kids wanting to hear that song played over and over and over again!
After about 20 minutes of spinning my wheels and looking up shark products on AliExpress, I came across this gem!
Ali Express tells you how many they have sold and how many reviews (this is a telltale sign that people are buying)
499 sold! 325 reviews?! I was in on this, I knew I could sell it for at least $45 bucks and add another $5 in shipping.
(By the way, you don’t need a million products in your store to be successful in this method. I had less than 10 products in my store and sold close to $4,000 in the product in one month with my test)
Adding Your Product To Your Store
After you find your project you need to get it on your site, along with some accompanying products that can go hand in hand with your main product. In my case, I was selling a shark onesie and my accompanying item was some simple baby shark shirts.
Shopify makes adding each of your products as easy as can be. Follow the steps below and you’ll see for yourself.
- On the Shopify dashboard click “Products”
- Then click “Add Products”
- This is where you’ll add your product title, description, images, and variants (Small, Medium, Large) to your product page.
Writing copy that sells for your descriptions is important. How many times have you stumbled across a product and it was a so-so item that you really didn’t need, but the way the description was written sold you completely? It’s happened to me more times than I’d like to admit.
You’ll need “good” photos. I say good only because that's all I worked with. I’m sure I would have sold more with “great photos”. In hindsight, I should have bought one of these onesies and got one of my friends to prance around Target while I videoed her singing baby shark (I woulda made a killing) Most of the time Ali Express has the photos you can use and edit to make good website content. Good enough to make the sale.
After I got my product listed and a few other shark type products that go along with it I was ready to start setting up my facebook page and ad account where I could start getting some traffic to my site.
Setting Up My Facebook Page
When I built my Shopify store I also built out a facebook page on my facebook account. This part is about as easy as it gets. If you use a free resource like Canva.com you can create some pretty cool graphics in a hurry.
You’ll just want to make this page look as active as you can by doing the following ASAP:
- Add logo
- Add cover photo
- Post 5 related memes or any related content
- Fill out all of the about info including descriptions
Setting Up My First Ad
This was the fun part for me (at first anyway). Setting up your ads manager account is about as easy as it gets so I won’t get into that whole process, but if you have any questions when setting it up with billing or connecting to your account, Facebook has a whole archive of FAQs that’s sure to have the answer to your question.
Once I got my account set up, I immediately started my first campaign.
On the left-hand side of the screen, there's a cool process ladder to help keep up with where you’re at in the ad building process. Kinda like a quick reference point that really helped me out when I was getting started.
The first thing I did was come up with what objective I wanted for my ad.
Since I want sales and not worried about much else I chose the “conversions” objective under the conversion tab. (pretty obvious, right?)
Scroll down on the same page and you’ll want to name your campaign the product your targeting (You’ll thank me later as this helps navigate your ads manager way faster when you start getting loads of ads built)
To track your conversions Facebook has what they call a pixel. Shopify made this super easy to setup. In the settings on your Shopify dashboard, you’ll go to online store > preferences and they give you a place to copy and paste your pixel. Boom! Easy peasy.
The next step of setting up your ad has you deciding what you want a conversion to be considered as (page visit, add to cart, purchase) Since I was just getting started and wanting to see if I could get any interest in these shark onesies, I chose my conversion value to be “View Content”
In my opinion, this is where the money is made. You can be selling the best products online, but if they're not being seen by the right people then you’re not going to be profitable. Starting you’re going to want to niche down and try to have a potential audience of that’s not so broad at first.
Custom audiences are how you step your game up with Shopify, but the kicker is that before you can use them your pixel needs at least 100 interactions before it can be optimized (100 page views, 100 add to carts, 100 purchases) So for now I’m just trying to get 100 page views ASAP with this targeting where I can start a Look-a-like audience for people who click on my ad and view a page.
Make a Post Before an Ad
Before I made an ad I went ahead and made a post on my page that I knew would be my ad creative. (You’ll want to do this for the sake of keeping all your likes, comments, shares going to one creative to boost your trust factor). Make your posts following these guidelines:
- Make a good product photo or video
- Write some simple copy that shows some savings or value
- Add your Shopify product page URL
- ADD A CALL TO ACTION (You wouldn’t believe how important this is)
Finishing your Ad
If you didn’t make a post that you wanted to use as an ad first then this step is going to take a little longer, BUT since I did make that post this step is about as easy as it gets.
You’re going to select the facebook page your advertising for then click “Use Existing Post” and scroll through your posts, and simply select your post you want to use.
Nowwwww I will advise that on testing you allocate $20-$25 per ad set and give every ad 3 days of run time to see if you have anything scaleable or a dud.
Making My First Sale
When that first sale came in I believe I had spent $20 to get one purchase. Not so great, but I still made $5. So my thoughts were if I increased my ad budget, then SURELY I’ll make more sales at this same rate.
This was the first of many mistakes in my ecomm story that I made. I mean c’mon, if it was that easy everyone would do it. I used that one ad over the course of 44 days creating different ad sets with different targeting testing what was converting the best.
I ended my ecomm experience with $4,300 in sales and a poor conversion rate of 1.56%. That conversion rate is considerably below average if you ask anyone and the truth is that after product costs and ad expenses I was able to put a few hundred dollars in my pocket. Definitely not the riches I was anticipating.
But I did not give up.
I went on to make many different ad sets & using different images to try to increase CTR.
I wrote long ad copy vs short ad copy.
But what really made a difference was a goofy shark onesie video I had friends make and turning that into a Video ad.
Conversion went up to 3%-5%
What I began noticing was that the ad itself was attracting more engagement because the video was somewhat funny.
So some people were tagging their friends in the comments.
This ad did great for nearly 1 month before the performance began to go down.
When you're dealing with a niche product, you are also limited with your audience. Eventually they would have all seen your ad and it begins to stop working.
No matter how much I tweaked the ad and tried to make it better, when it comes to dropshipping, the ads seem to have a limited duration of life. Which was a very unfortunate thing I discovered.
When its all said & done, this was what my total month sales looked like:
$48.95K in 30 days, looks pretty good. But after the FB ad cost (which was a lot), minus cost of products: I profited $3000
Not to mention all the order fulfillment I had to deal with afterwards. & The fact that I may have to find a new product just after 2 months since my audience seemed to have dried up.
Just wasn't worth it for me that already had a thriving lead generation business that ran on 100% organic traffic on Google which is way more stable & less maintenance.
I ultimately decided drop shipping wasn't for me because it was simply demanding in every way that I didn’t want and online business to be. Between constantly testing and monitoring ads to make sure you weren't overspending and dealing with upset customers (shipping disputes) I just wasn’t inclined to keep pursuing my idea of selling random products online for minimal profits.
eCom is a good way to make money online and I can see the potential that it has. And I see plenty of people making it work with eCom, but as we’re all different in our viewpoints, I put together this list of pros and cons
- This is an online business and anywhere with a Wifi connection can be your office
- Gives you a lot of room to be creative and grow your online marketing skills
- The internet is growing every day, with Facebook having 1.58 billion daily users, you’re not going to run out of growth potential
- Shopify makes it simple to get started and add products to your store with minimal effort compared to using WordPress and Woocommerce
- A LOT of maintenance in almost every aspect. (constantly checking supplier pricing that can jump up overnight, checking your ads every few hours to make sure you’re not hemorrhaging money away without gaining anything)
- Facebook Ads cost is rising every year and you can see the trend of every niche raising their CPC over time gradually
- Dealing with disgruntled customers was probably one of the most stressful parts. No matter how clear you are on shipping times, you’re always going to have people that expect their product the very next day.
- There’s no guarantee that dropshipping will remain the same for the foreseeable future.
All in all, I did see where this method of online business was profitable and scalable, but I also felt the burden of having to keep a constant check on orders, wholesale pricing, ad spend, shipping times, and customer service. Ecommerce works. Hands down it works! But it’s definitely not for everyone.
Based on my experience, making money with Facebook ads traffic has gotten much tougher lately. More competition = higher cost per click.
Can you still do 6 figures with dropshipping? sure, but you would want to be running more than 1 shopify store at any given time. Because when 1 products stops selling, you don't want your income to come to a screeching halt.
Managing multiple stores & fulfilling the orders of products that you're only making few bucks on is just a lot of on-going effort to maintain. Its just not my cup of tea.
This is why the lead generation business still feels like the oasis amidst the harsh desert-like climate of internet businesses.
Because I have lead generation sites that's been ranking and making money since 2014.
True! Competition is high at any E-commerce business and not minding other disadvantages. In my experience, it has a low-profit opportunity but it depends on if you own the product you are selling you will gain more earnings. I guess.
Kelly, yes there is certainly more profit margin when you own the product instead of dropshipping it. But it also comes with more risk because you have to buy stock in quantity ahead of time and take on the risk of it not selling. Agree 100% with you that eCom is becoming increasingly competitive – there’s a lot of whales who have the knowledge and resources to dominate.
I agree with the competition on Facebook Ads. Also, I agree with your business it is no doubt giving more value to other local businesses.
Dewey, Facebook ads is getting tougher and it’s interruption marketing. One of the reasons local lead gen works so well is that we put our assets where people go searching for solutions to their specific problem. Meaning they’re further along the buying cycle when they find us.
Wow, I can't believe that we can create passive income for a local lead generation business. That makes me want to know more about the business.
Felipe, thanks for taking the time to read the post. If you’re looking for more info, submit your email address to access our lead generation case study video library. When you’re ready to fast-track your results, reach out to us for training and mentoring.
Nice. Thanks for this honest article! Business-wise Shopify shouldn't be done by a beginner like me.
There’s going to be a learning curve to any new business model. It certainly helps to get quality coaching from a mentor with a proven track record in the business model and a process they can walk you through. eCom and Shopify has become very competitive while the public has become more skeptical of the typical dropshipping/Shopify store.
All in all, I admire this case study about Dropshipping. You did a great job! What I admire the most is when you were able to profit which indicates that you are good because honestly not everyone can do that!
All in all, I admire your case study about Dropshipping. You did a great job there! What I admire the most is when you were able to profit which indicates that you are good at business. Because honestly, not everyone can do that!
Melanie, thanks for the feedback. Let me tell you, I might have made some profit but it was a lot of work. I can’t imagine doing that for every product and launch. I prefer local lead generation because it’s much more passive in terms of time taken and I can count on the income every month while scaling.
Great! Thank you for this article. I can 100% imagine what to expect from having a Shopify business.
The difficulties of advertising a product are real in a dropshipping business especially with few resources while competing with other businesses.
Thanks for reading and dropping a comment.
I enjoy reading your blogs and I find your business interesting! How can we start that local lead generation business?
Lee, thanks for the kudos. Hit the button for coaching and enter your email. You’ll see more info on local lead generation and an option to hop on a call with us.
Check out some of the local lead generation info on the site and if you’re ready to start, hit us up for help.
As a beginner in the business, it's great to find an article like this whose person has experienced the same business. Realizing how saturated Shopify is with a competitive business is not a good idea to start on. Well, thanks a lot for sharing your expertise and your passive income business!
You’re welcome and glad it helped provide useful insight into the business. Agree with you there…anytime you’re stepping into a saturated marketing, it’s a race to the bottom and that’s not a good business model. It’s best to focus on profit margins.
Informative case study! I agree with that. Paying ads just to advertise your product is not wise at all. It will only make you spend more than your earnings. That's why for me. I will not try to go back to that business!
Alannah, paid ads are tricky and unreliable as a way to generate sales. It’s hoping to hook someone who wasn’t planning on buying anything. After getting my ad account suspended, it was too much stress and risk to keep counting on ads to generate revenue.
I am fascinated to know about that 6 figure income business. The thought that it is helping other local businesses generate leads is already a win even with a minimal amount of investment, no product involved, less hassle but with huge returns.
I would love to find time on how your local lead gen business works.
Roxanne, yes it’s very satisfying to help local business owners not only stay in business but to see them grow and scale with the lead I’m able to send them. If you want to take a deep dive in the local lead gen business model, enter your email and get access to the video case studies from some of our students who share how they did it.
Hit us up in the box to request coaching or check out our local lead generation articles on this site.
Woah! I appreciate the detailed Shopify setup and for sharing your experiences on the business! It seems like my questions on paid Ads and Shopify business are answered with this case study.
Basically not worth doing this time. Super Thanks!
Rita, glad you got the answers you were looking for.
Yes you are right! Drop shipping still worth for E-commerce specifically with shopify platform.
Selena, agree with you here. True eCommerce is the best way to go, as in branded products and buying in bulk. Dropshipping as in cheap products from AliExpress (or similar) is well past its prime.
What if I already have some inventory of some product to sell? At least to get started and I need to get rid of it anyway? I do like the idea of Lead Gen business but I need to make some money and doing some ecommerce with this inventory I already have seems like a way to make it? Also, why not an Amazon store instead of Shopify/Facebook? I am brand new to all of this but after dealing with a layoff 2 years ago that sent me in a downward spiral and I almost lost everything so I now know that Diversity of income is key to survival and growth. Please advise if you can?
i advise focusing on 1 business model. Dropshipping is risky because you’re spending money on paid ads which is very unpredictable. Amazon FBA is difficult to get on page 1. This is why I love the lead gen model because its much easier to get on page 1 in the local search.
very good to read your experience. thanks
I tried drop shipping last year and got nowhere. Seems pretty saturated at this point. What do you think?
yes this is why I recommend the lead generation business now
Very good post 🙂
I started my shopify store yesterday and as i can see the profit is so low compared to time u put in.
After seeying this post I don’t know if it’s completly worth the time.