Common Dropshipping Mistakes (and What to Do Instead)

Transcript

Felix: Today I’m joined by Tim Kock from Sunyez. Tim’s an entrepreneur with a passion for dropshipping, and is currently running a dropshipping case studies store, where he made $8,872 in just four weeks. Welcome, Tim.

Tim: Hey, Felix. Thanks for having me.

Felix: What is Sunyez? Give us an idea of what is that business, what are the products that you are selling.

Tim: Actually, Sunyez is a dropshipping store where I sell sunglasses. I built the store for a case study on Oberlo to really show people how simple it actually is to start a dropshipping business, and how to make sales.

Felix: Got it. What is your background? Have you launched other dropshipping businesses before?

Tim: Yeah, I’m currently running two dropshipping stores, and I also built another business just for purpose of the case study on the Oberlo blog where I made around $7,000 in eight weeks. Yeah, that’s what I’m doing with eCommerce right now.

Felix: Yeah, obviously you’re a big fan of dropshipping, and it’s a very popular topic right now with entrepreneurs that are getting their feet wet. They’re diving into dropshipping and we’ve also heard from stores that are millions of dollars in revenue that are also dropshipping. Let’s talk about the pros and cons of starting a dropshipping store. Why did you specifically choose to start a dropshipping store?

Tim: I think it was the simplicity of starting an online business. Me, who had no background in business at all, I’m still serving in the German military, so obviously I don’t have anything to do with business or online business. I just wanted to free my mind from the military stuff, and so I decide why not give it a try to start my online business. Did a little bit of research on Google, and eventually found dropshipping, and figured out it’s pretty simple to start, even though I’m a totally beginner. Over time, I figured out it’s not that hard if you’re just following the steps who are actually required. That’s when I started to start my first dropshipping store. Obviously made a lot of mistakes in the beginning, but with time you’re getting more wiser, and you figure out what is needed. Yeah, I think it’s pretty simple and straightforward, and everyone can start a profitable dropshipping store right now.

Felix: But for you it was a no-brainer. I think for a lot of the entrepreneurs who are people that are thinking about getting started, it was a no-brainer for you to choose dropshipping because it was easy to get it started, and one of the common things is that it’s very low risk. You’re not involving yourself with tons of inventory or anything like that.

Now you mentioned that you ran into mistakes along the way that you’ve now fixed when you’ve launched future businesses. Can you talk to us about that? What are the most common mistakes that you’ve made, or you’ve seen other entrepreneurs make in a dropshipping journey?

Tim: Yeah, sure. I think had the same misunderstanding of how eCommerce actually works. I thought just setting up a store, running Facebook Ads and then I will make a lot of sales. But this is actually not how it really works. A dropshipping business owner, or a business owner in general have to put in way more work than people may think upfront. Instead of just paying for ads, you have to provide real value, whether through content marketing, or through just a great customer service. But just setting up ads on Facebook, Instagram or wherever you choose to target is not the best way to start. This was my main issue. I spent a lot of money on paid advertising in the beginning, and made no sales out of it.

This advice would be the best to stay away from paid advertising in the beginning, if you don’t know what you’re doing, as I did. Once you made it and figured out how you can make sales without paid advertising, then you can reinvest that money into your business, and invest it into paid advertising to grow and scale your business. Because then, you know who you’re actually targeting, who your target audience is, and bring value to them.

Felix: Got it. Yeah, I think paid ads are a magnifier. If you’re doing the right things, magnify that success you have. If you are doing the wrong things, it would magnify that as well and cost you a lot of money. You’ve obviously learned that the hard way which I think is the path that a lot of other entrepreneurs have taken, and hopefully others can learn from that.

You mentioned that the key then is not to focus on just creating some kind of store, then throwing money at it through ads, but actually investing your time into adding value. You mentioned two things, one path is through content marketing, so let’s start there. What are some ways that you’ve seen entrepreneurs or that you have added value to, to your business, or to your customers through content marketing?

Tim: I think if you really want to build a long-term business, which is sustainable, then blog posts and focusing on SEO can really work out. If you’re really providing great in-depth blog posts … For example, Shopify does an incredible great job on this. This is a great example. Also, eCommerce stores are not a SaaS business where people are looking for that much content, but there’s a reason why a lot of eCommerce big brands, for example H&M, why they are spending incredible amount of time and money for their content. They’ve owned magazines and just a great blog where they provide value with upcoming trends, and how people can combine different clothing stuff with accessories, or items. I think if you’re, for example, running a fashion store, then you should bring value by showing what type of items people can combine out of your catalog.

Felix: Was this the path that you took with Sunyez? Did you create blog posts around ways they could combine the glasses that you’re selling with other fashion pieces?

Tim: No. As I was very limited on time, I set the goal to just achieve my goal in 30 days. I just wanted to create some content, and I figured out the best way to do it is to interview small influencer, and just ask them random question, and then publish this on my blog. Then I just reach out to them, say, “We just publish this interview, and then they share this interview for me,” as they were obviously proud of being interviewed, probably for the first time ever. Then I got a lot of traffic coming from this very organically.

Felix: This was almost a good content marketing hack that you’re talking about. I really like this approach of interviewing. I’m obviously an interviewer, so I may be bias here. But you’re saying it’s a really fast way to create content and then you’re doubling down on that by bringing someone that’s an influencer, that has their own audience as well to interview so they are now you’ve almost created a distribution channel for the content that you’re creating automatically.

Talk to us about this approach. If someone out there is short on time, like you were, and they want to create content through interviews, what was your process? How did you find the people to interview and how did you organize all of it?

Tim: Actually it was pretty simple. I just did two things to acquire people. I just posted in some fashion Facebook groups, asking for people who would like to get interviewed, and then in return I would share all of their social media channels, and their blogs on my store’s blog. I just put in a link to a Google form where there were seven questions, then people fill out the form, answering the questions. Also another way was to direct message people on Instagram. I just searched for #fashion, which [inaudible 00:08:54] to some micro influencer, ask them if they would like to be interviewed, and then the same stuff over there. Pretty straightforward, pretty simple.

Felix: Yeah, I think this is the point where maybe the [inaudible 00:09:04] syndrome might kick in for some listeners where they’re like, “Well, I’m a small store, I don’t have a store yet, or I just got started. Why would someone that’s an influencer with tens of thousands, hundreds of thousands followers want to be interviewed by me?” Did you experience that? Did you even have that kind of issue?

Tim: No, because I did not approach one of the big influencers. I just kept the number very low. I also interviewed people who had less than 10,000 followers. This was not a problem for me at all.

Felix: Yeah, and it’s one of those things where you maybe start at 10,000 followers, and then you build up your audience through them, or now you have this co-sign essentially from a smaller micro influencer, then you can start approaching bigger ones and say, “Hey, look. I did this interview for someone that was smaller than you, but not that small,” and you build credibility from there. I think that’s an important point that though you don’t want to shoot too high off the bat, you want to go to interview people that make more sense for your size, and then build from there. That’s the concept marketing piece, I think you did I think that’s a great way to get things going very quickly.

Now you also mentioned customer service as a way to add value to your business as a dropshipping store. What are some ways that you can do that?

Tim: I think direct messages on Instagram works incredibly well on this, because as you probably know and as a lot of people know, is if you are communicating with a big brand, then you send an email, and you wait for one to three days until you get a reply. But as you’re flexible, especially in your early stages of your business, you can reply within minutes on Instagram direct message. I was very open about this in my Instagram bio, and let people know that if they have any question, they should just shoot a direct message, and I get back to them instantly.

I think people appreciated this, at least this is my assumption. But I do it now for several years, and it works incredible well, and people are coming back. Some even said that they really love my great customer service.

Felix: What was the goal of the case study when you sat down? You’ve released others in the past, which I recommend folks go and check out. What is the goal when you sat down to create a case study around dropshipping store?

Tim: My main goal was to prove that dropshipping is a real and sustainable business model. Obviously I needed a KPI to focus on to figure out if I reached my goal. For me, the proof that I bring in a lot of value to people was a returning customer rate. I set a goal, which I wanted to achieve and on returning customer rate. If I would have achieved this, then I know that I bring in a lot of value because otherwise people won’t come back.

Felix: Got it. Now when you sit down to do these case studies, and because you’ve released a couple in the past already, I’m sure you’ve gotten tons of questions back from the dropshipping, the eCommerce community. What do you consider the most important question that you’ve heard so far from entrepreneur audience around dropshipping?

Tim: How much money do I need? I think this is really the most common question, because people seem to be afraid. Also they know that dropshipping does not require that much money, but they need a lot of money for paid advertising, and to really get their shot. But I think you need very little money to get actually started, especially if you stay away from paid advertising. There are so much things to do as a business owner besides of paid advertising to actually make sales.

Felix: Now the four weeks that you took … To go jump back to the intro, you spent four weeks and you made $8,872. Was the four weeks the time that you spent building the store as well? Or was that the time that the store was live?

Tim: Until the store was live.

Felix: Okay, so you built the store and it went live for four weeks, and you generate almost $9,000 in sales.

Tim: Yeah, that’s right. It took me, I think two or three days to build the store.

Felix: Okay. All in all, about a month it took to go from nothing, to having a store that generated almost $9,000.

To set the table, that nearly $9,000 in sales, are you able to share what was the profit? How much were you making at the end of the day?

Tim: It was around four and a half thousand.

Felix: Okay, wow. So 50% profit margin, which is great.

Now the four weeks, let’s get into this. At the very start of the very beginning, what is the first question you have to answer? How do you even get started in deciding what kind of store to build?

Tim: I think this is also another very common question. People think a lot of dropshipper who want to start, think about trending products that they really believe that dropshipping can only be successful if you have found an incredible trending product, like fidget spinners, for example. But I think this is not necessarily 100% the truth because I sold sunglasses. My assumption was that there’s always sun in some place of this planet. I just decided to let’s give it a try. This is not a trendy product, necessarily. I did the same with watches, which are also not very trending.

I think if instead of focusing on the trending product dropship, I would focus on a product which has been used day by day, all around the planet, then they would have more success. For example, this could be phone cases, phone charger, watches, sunglasses, bracelets. Stuff like this.

Felix: That’s one criteria that you mentioned, is that you want a product that is being used on a day to day basis, at least somewhere in the world. Are there other criteria that you look at to determine if it’s the right niche for you or not?

Tim: I think it should be easy to ship. You don’t want to ship heavy goods. Also, you could … I don’t like to ship any electronic devices because you never know the quality. Also, you should do quality orders and test the quality of the products yourself. You never know how many of the products you are about to sell will arrive broken, and then you have to deal with a lot of returns.

I personally don’t like to ship or to work with technical products.

Felix: What kind of tools or resources have you used, or do you recommend people use to help them find a niche?

Tim: For this case study, I did not use any validation tool. But I would recommend to use Google Trends, the Global Market Finder, and also social media. I think if you are very active on social media, for example, Instagram, Twitter and Facebook, then with time you know what trends are coming up. I think Facebook groups can be also very valuable in that case to really just spend 10 to 15 minutes per day to constantly look up what people are actually talking about right now. This could be any group, from fashion, even though you’re not into the fashion niche right now, but you want to have an eye on niches, to gaming. This could be anything. Just join all the groups you think have potential, then just look up what people are actually talking about.

Felix: Now, on social media when it comes to Instagram or Twitter, most people out there might just be following their friends and family, and are in this little bubble. Should they be following specific types of pages, or influencers, to get a better head start on the types of trends that are coming up?

Tim: I think it can be really valuable to follow so-called micro influencer, people who have around 30,000 to 80,000 followers, to really figure out what trends are coming up, or what trends are actually right now.

The problem with big influencers who have [inaudible 00:17:32] of followers is that they don’t necessarily show trends, because they have deals and campaigns with huge brands, and they don’t care too much. These brands don’t care too much about trends because they are the ones who build own trends, which are not for the public.

Those micro influencers, following them can be very valuable because they have deals and campaigns with brands who are focusing on trends.

Felix: That makes sense. I can imagine that a much larger influencer will have much more expensive rates, which means that only more established, more mature industries and businesses are able to work with them when it’s a new trending, just about to become really popular industry or product. They probably only afford to work with smaller influencers, these micro influencers, so you really want to pay attention to what those people are talking about, and what those micro influencers are promoting. That makes a lot of sense.

Now while you are running all of this, I think you had mentioned, maybe in a pre-interview, that you are doing this on the side in addition to your nine to five. Is that right?

Tim: Yeah. That’s correct.

Felix: That’s cool. I think that’s very relevant to a lot of listeners that are doing the same thing. How did you structure your day to make sure that you are able to get all of this done?

Tim: It starts very early in the morning. I get up at 4:00 a.m. every morning, and then I try to get in at least one hour of dropshipping work, or now content creating work. Then I go to my regular work. Then whenever I come home, as I’m serving in the German military, I don’t have fixed times. I never know when I’m coming back home, at the evening or night. Then once I’m home, I’m just spending some time with my girlfriend, and then spending at least four hours on my dropshipping business. I don’t have a very clear structure, but I want to spend at least five hours per day on my dropshipping businesses.

Felix: Now are there any limitation because of this, in terms of timeliness, things that you have to get done at a certain time but you cannot because you are obligated to your work or anything like that?

Tim: Yeah, there are a lot of issues with that. Obviously I never hit my to-do list per day. I never achieve them because there are always things which come in your way. I stopped worrying about this very early because in the beginning, it drove me crazy, and I was really pissed because of this. But now with having some stores, which are successful, I know that there are always things coming in your way. I would just recommend to stay calm, and then there’s always a next day where you can work on your store.

Felix: Got it. Now that you found the sunglass niche as what you wanted to focus on for Sunyez, what was next? How did you validate that there was a space for you in the market?

Tim: I know that there’s always space for new dropshippers because the goal of this business was never to build a multi-million dollar business out of it. I think if people … Also big goals and dreams are great. If they stay grounded in the beginning and have maybe smaller goals, like just a couple of thousand dollars, then they’ll realize that there is a lot of space for them. There’s definitely not space for a lot of millionaires, or multi-million dollar stores and dropshipping, but there’s tons of space for smaller stores.

Considering that every month there are new people getting their first paychecks and there are new customers born every month, this is the ultimate validation that there is always space for people.

Felix: Got it. Now when you do look at the niches that you can go after, you have this criteria that you have in mind where you want to sell a product that is easy to ship, that is being used on a daily basis, and you recognize there is always space in the market, did you use any tools or anything to determine which particular niche is the one that you might have the most success in?

Tim: I think Google Trends can really help there. There are a lot of paid tools and really fancy tools, but I’m personally not a big fan of these tools because I like to go more after demand, like real demand. All the numbers you can see are great, and they definitely help, but unless you make your first sales, you haven’t validated our idea. You really want to sell products. I just go out as soon as possible and make my first sales, because then I can feel confident there is a real demand.

Felix: What do you look for in Google Trends?

Tim: Just an increasing demand for search value.

Felix: Got it. If there was a stagnation where it was flat, or if it’s on a decline, you’re pretty much excluding that niche.

Tim: Not necessarily excluding, but considering new niches. If I haven’t found any better one, then I would test several products. If I would have found three products which are pretty much the same, then I would just try all three products. The one which I can sell the fastest will be the one I will focus on.

Felix: Got it. Now you said that you want to be able to get that first sale as quickly as possible. That is the ultimate validation. How do you set that up? How do you try to get your first sale?

Tim: I do it per Instagram direct message. I figured out there’s a simple way to do it, to involve people into your business. You just reach out to them, to people who could be your potential customers. You could find them through hashtag research, and you just ask them for feedback on your store. In return, you are willing to give them a 50% discount. This is not to make money, this is just for research work to A) get valuable information, what you should improve on your store, and B) if people are actually willing to spend money on your store, if your store looks trustworthy enough.

I think this is the easiest way to get in the first sales. This is not a money making technique, because this is obviously not scalable, but this is very easy validation work.

Felix: I got it. You have a profile that’s built around your store, you’re reaching out to potential customers, you’re asking them for their feedback, and that’s the key thing that you’re trying to get out of them, but you’re also offering them a discount, and they ultimately end up trying to purchase. What is the conversion rate? Based on all the experience that you’ve had, not just particularly with Sunyez, but in the other stores that you’ve launched in the past, how quickly are you able to get your first sale?

Tim: It was very, very [inaudible 00:25:04]. I think my most successful store had the first store had the first 10 sales in the first 10 minutes of publish, but because I did some pre-marketing before. But on Sunyez, I think it was on the second day, I made my first sale.

Felix: How many people were you messaging?

Tim: Twelve, or something.

Felix: Okay, very quickly then. Twelve people and then you got your sale within two days.

Now you mentioned that when you are testing niches, you are going after a few, potentially at a time if you see potential in a bunch of them. I think there’s this concept in the dropshipping space of creating a general store versus a niche store. First of all, what is that? For anyone out there that doesn’t know about that concept, what is the concept between a general store versus a niche store?

Tim: A general store is where you sell a lot of different products from phone cases, to necklaces, to sketchbooks or everything. This is just to have a very large inventory. A dropshipper can offer everything a customer could potentially need, in order to make more sales.

A niche store is where you just focus on one product, or one product group. For example, sunglasses.

Felix: Do you take that approach when you are just testing things out? Do you just have a general store that you put a lot of products into, and then test that way? Or do you actually create individual stores for all the different categories or niches that you want to focus on?

Tim: I actually like to go with niche stores, but this is not necessarily the best practice way. There are a lot of very successful general store business owners.

Felix: Okay, now before you get to the point where you are able to message people on Instagram, asking them for their feedback, you actually have to have a store filled with products in your catalog. When you identify that you want to focus on the sunglass niche, what was the next step? How did you find the vendors, find the products to sell?

Tim: I just went to Oberlo’s supply. Oberlo is an app for Shopify. Just pushed in some sunglasses, I figured out could be selling very well. With time, I would get rid if they are not performing as I would like to. Then this was actually all within two clicks, I got those products into my store.

Felix: Now are you working with multiple vendors, or are you just looking for one specific vendor whenever you’re creating a store?

Tim: No, I just added all products from different vendors to get as much sunglasses as possible.

Felix: I think there’s also this approach where people are evaluation which vendors to work with based on things like shipping times, and whether shipping is free. Do you look at that too when you are considering what to put into your store? Or are you just trying to put everything there at first, and then start going through a curation process after you see what sells?

Tim: Obviously I had a clear goal, which kind of product I wanted to have in my store. I did not look necessarily for free shipping. Also, I did offer free shipping on my page in the end, but I just included these into my prices so I could afford free shipping in the end.

Felix: Got it. Just to walk through this process again, you identified the vendors through Oberlo’s supply, you add them to your store, and you mentioned earlier how you think it’s important to make sure you get the products yourself, to make sure that it actually is of quality. How do you do that? Do you do that first before you add them into your store, or do you order them after you added them to the store?

Tim: Yeah, I just order them and send it to my house. Then I just check the quality to see how high the quality is, and how the frames look like, and if there are scratches on the glasses, and just check them if I would purchase those product. Then obviously most products I sold on Sunyez were female products. I get them to my girlfriend, and then she looked at it and I ask her what she would purchase for these products.

Felix: Got it. Is that filtering process done before you add that product to your catalog?

Tim: Yes. Absolutely.

Felix: Got it. Okay now that you’ve identified the products that you want to add to your store, I think the big question next is, how much should I sell this for? Like the pricing. Can you walk us through that? How do you determine … Well first of all, what are the prices for your store and how did you determine them?

Tim: I think they are very different, from $20 to $40. In the end, I just want to have a profit after tax, and after all of at least $5. I set up my calculations accordingly to that and try to offer the lowest prices as possible, and still making that profit.

Felix: When you have this $5 profit in mind, what is the goal behind that? Why the $5 specifically?

Tim: I figured out this is a solid profit margin, and this was everything just from experience, from the past couple of years.

Felix: When you are running all of this, it’s lots of moving pieces, lots of players involved, lots of different vendors. You’re running your social media accounts, and you’re running the store and everything. How do you keep all this organized? How do you project manage the entire business?

Tim: I like to work with Trello, and I have everything set up on Trello in order to just keep track of everything. I have my checklist in there which is some kind of to-do list, then I just work off everything from these checklist.

Felix: Do you run this by yourself? Or do you hire anyone to help out?

Tim: No, I just do it on my own. My girlfriend helped me in the end, with fulfilling the orders, but everything except for this, I did on my own.

Felix: When you are now looking at the store is stocked with products, what about the branding? How do you decide … Well first of all, how did you come up with a name? How did you decide on how the logo should look, and the design of the entire business?

Tim: I did not have a very clear idea of what I wanted to achieve. When I first did the case study in March, where I sold watches, I thought that this was just a store where I made money.

Obviously this was great, and I really liked the result, but on the Sunyez case study, I wanted a little bit more and got a little bit more into branding. I had to come up with a name and logo. I just listed up every names or every terms I think would make sense. Then I just combined sun and yez. From yez I made zet. Then the end I combined these sun and yez, and had Sunyez. I was just combining two terms.

Because I really wanted to have a color gradient the same as Instagram has, or very similar, I just hired the designer on Fiverr, he should make a logo for me with the same gradient colors. But it did not look that well, so I created a little bit different version of the logo. In the end I came up with a very orange-ish logo, with a smaller gradient over there.

Yeah, I did not put in too much branding efforts. I just want to act and appeal like a brand, like a real brand.

Felix: Do you think that that’s not important when you’re just starting, to not spend too much time on creating the perfect brand?

Tim: Yeah. I think a lot of people not necessarily wasting time, but spending not the right amount of time in stuff which is really important. I don’t like to spend that much time on branding in the beginning. If I figured out this business could be a real hit and could be very successful, then I still can put in a lot of branding efforts and real branding efforts.

Felix: Yeah, you don’t there’s an issue with just going with what’s good enough, and then maybe even redoing the entire brand later?

Tim: Not really, not.

Felix: Got it. If you have a good enough logo, which is what it sounds like you were going for and you have some kind of color theme to your brand, is there any other pieces that you have to make sure you get in place at a minimum to consider a good enough release, in terms of having the brand together?

Tim: Yeah. I wanted to create some kind of brand voice, but I did not come with anything in the beginning. But over time, When I run the business, I came up with a pretty good voice, and this was just because I did the interviews I mentioned earlier, because then I had a very clear idea how my target audience speaks, what kind of word they use, and so I could use the same words and build some copywriting out of this. But not necessarily in the beginning.

Felix: I see. You’re interviewing these influencers who may or may not be your customer, but their audience is certainly your customer, which is what it sounds like you’re targeting. Based on the responses to your question you learn how to speak the same language as your customer.

Tim: Yes.

Felix: Got it. Can you describe that? What would you consider the voice of your business?

Tim: Very girlish. It’s very hard for me as a guy to really come up with a girlish voice, but I had the help from my girlfriend. I just want to keep it very, like an 18 year old girl would talk to their best friends. I made a little bit fun about boys and how bad they are. There’s just some girly talk. I wanted to include some pieces of that into my brand’s voice, to really make the voice like my target audience would speak.

Felix: That’s great to hear though that even though you’re not the target audience, you’re still able to discover how to speak like them, and to speak to them. I think that’s important. That should not be an obstacle to starting a business because you can always find ways to learn how to communicate with the target audience.

Now once you have the product figured out, you obviously have the niche figured out, you have the branding done. Now comes time to building the store. What are some of the most important pages to put up when you are on a time crunch and you just want to get the bare minimum out?

Tim: Obviously you want to have the legal pages on point. This is very important. Then just the basic pages, like a Contact Us and About Us page. That’s actually all. There’s no need to do anything more.

I like to add a Free Shipping page as well, where I like to explain why the shipping may take a little bit longer. But in return they get free shipping.

Felix: I got it. You mentioned an About page. What do you put in there?

Tim: Just what the brand is about, and how passionate we are about selling sunglasses, and these kind of things.

Felix: Is this where that brand voice that you’ve been able to establish through these interviews? Is that where you’re pulling information out of to put into the about section?

Tim: Yeah. Absolutely.

Felix: When you launch a new store, what are some of the most important apps that you want to make sure you include?

Tim: Obviously I like to include Oberlo for dropshipping, and then also MailChimp and SumoMe. I think it was formerly SumoMe, now it’s just Sumo.com.

Felix: What is … Sumo.com, SumoMe is a collection of different applications. Are there specific apps from Sumo that you like to include?

Tim: Yeah. Their Welcome Mat, and also their … This is … I don’t know how it actually is called, but just a popup. But I really like how easy it is to add these popups to collect email addresses, so that’s why I favorite them.

Felix: Welcome Mat, what is that? How does it work?

Tim: It’s actually dynamic landing page, if you want to call it this. It’s just where the whole screen is filled with form people can fill out if they, for example, want to have a discount, or where you want to promote anything you like to promote, for example, a giveaway, like I did. Then if they have no interest, they can just click it away. But if fills the complete screen, so it gets the full attention of the customer.

Felix: What about the popup. Is that time based? Is is action based? Do they get it immediately when they come to the site?

Tim: There was a [inaudible 00:38:34] popup. As soon as a customer wants to leave the page, then the popup appears and may hopefully catch the attention and the email address of my customer.

Felix: Have you played around with different incentives? What works to get them to put their email address in?

Tim: On this case study, I just work with a giveaway. I just set up a giveaway which was worth around $150 in makeup brushes set. I just promoted [inaudible 00:39:04], this giveaway through my popups. People were subscribing or entering this giveaway like crazy.

Felix: Yeah, that’s interesting. You are running a giveaway with a product that I don’t think you’re selling on your store?

Tim: Yeah. That’s right. I did not like to give my stuff away for free.

Felix: Why is that?

Tim: I don’t want to get people into a mood where they just wait for a next giveaway. If I giveaway other peoples’ product, then they are not waiting for a next great discount, or giveaway, or whatever. They just apply for this giveaway, and hopefully I can use the emails I will collect through this in order to get those people becoming my customers.

Felix: How did you know that that makeup brush kit is the product that would work? How did you know that was product that your audience wanted?

Tim: I just assumed that, to be honest. I had no ideas. I said there are a lot of this girly voices, and then I just imaged what girls could maybe use too. Makeup is very obvious, but I did not want to give away makeup because there are very different colors, and shades, and whatever. I just said, “Brush set, everyone could use a brush set,” and that’s when I came up with the idea.

Felix: Got it. When you are putting these products into your store, a big part of it is the product page and the description. How did you write the description coming from someone that is not the audience? Or not the target customer?

Tim: In the beginning I kept it very simple, like just one line actually. With time I improved it and developed it. It turned out that this was a key factor to my later on success, because once I changed the product description, and used the words my target audience used, and coming up with my own brand voices once I developed it, it was a complete game changer for my business.

Felix: Now the store, was it a theme that you purchased? Was it a free theme? What did you choose to build your store?

Tim: There was a paid theme for around $180, because it gave me all the flexibility I needed in this business.

Felix: What was that theme?

Tim: No, just one I go with the paid theme. It’s called Symmetry. It gave me all the flexibility, which I needed for this project.

Felix: Got it. Okay so now that you have the store built, you have launched the store, what was next in terms of actually scaling up the sales? Because I think you said the first way to get sales is to Instagram message people and then get them to check it out. Maybe they’ll purchase. How do you actually turn it into a system where it is actually scaling up and you’re getting sales without having to do this so manually?

Tim: I was actually very surprised how it worked out in the end, because as I mentioned, I ran this giveaway. You can control … I set it up the giveaway with KingSumo. You can control how many entries a participant gets when they do a certain thing, like if they follow your Facebook page, or Instagram page, or whatever, then they get five, 10 or how many entries you pick.

I set up a brand ambassador program, or it was more like … It was not really brand ambassador program. I said just, “If you click here and become a brand ambassador, and use this discount code, you get 50%,” and that’s all. People actually clicked on it and they purchased like crazy through this discount code. I made around $1,000 from people just clicking on this link in the giveaway. This giveaway actually helped me a lot on making sales, even though it was never built for this purpose.

Felix: Yeah, how did you get the traffic originally to even come to see the giveaway?

Tim: I did a lot of Instagram work, and a lot of Facebook work. I posted in several Facebook groups that we are giving away this great giveaway. A lot of young girls seemed to be attracted by this, and then they just entered it. Because you will get more entries if you share with your friends and refer friends, it went, not necessarily viral, but it turned out that in the end it was 556 people who entered the contest.

Felix: Okay, so you go into these Facebook groups and posting about the makeup brush kit giveaway. Did you run into any issues with the moderators getting upset that you’re posting this? Did you run into that kind of issue?

Tim: No.

Felix: I got it. Okay, that’s good to know that that’s an approach that works. You mentioned that Instagram was also something that you focused on. Was that a similar approach? What would you do on Instagram that drive traffic to your store?

Tim: I did a lot of stories where I just promoted this. I also did a little bit of DMs, but not that much. I think I sent 20 to 30 direct messages, if people would like to enter this, and if they would share then they get more entries, and stuff like this. I think what really has was the ability of consumer to get more people into this giveaway if they shared with their friends.

Felix: Got it. Just to explain real quick, so the way that KingSumo works is that you can enter for one entry, but if you shared it where you got other people to enter, it would increase your number of entries, increase your chances of winning. It incentivized people to share and kick off a little bit of virality with the giveaway.

Now you mentioned that you created Instagram stories to promote the giveaway. What was in a story? I’m not sure, were you in the story? I think that’s an issue that some people have out there where they don’t necessarily want to be the story. How did you feature the product, featured the giveaway in your Instagram story?

Tim: No, it was not me in my stories. I just came up with solid story design. I used Canva, which is a free tool. I just created some Story images. I took some random stock images from Burst, and then I just put in some text over there and said, “If you click the link in the bio, then you will enter the giveaway.” This was actually all I did on Instagram. I did for around two weeks, and then all the traffic, which came from Instagram, was just directed on this giveaway.

Felix: Got it. Now when you’re releasing these stories on Instagram, don’t they have to be followers of you before they can see it? Or can they still come across your store without following your profile?

Tim: They can see it without following me.

Felix: Is this through hashtags? How did you get your … I think the steps here is that people are coming to your store to enter the giveaway, and they end up purchasing it on the spot, or purchasing it later. Before they get there, they’re seeing your Instagram story, and that’s how they discover the giveaway. How do they see the Instagram story to begin with. How do they find out about your profile or find out about your story?

Tim: Definitely through the posts out there, hashtag. I post on the images, so I use very relevant hashtags. I came up with a search for Websta.me. Just looked up for 30 fashion related hashtags, and then a lot of people just came from these hashtags, who have visited my page.

Felix: Okay. Just to walk through this process again, you went on Websta.me to find relevant hashtags, you’re creating posts in your Instagram page, like actual photos on there, which people are then finding through searching the hashtags and coming to your Instagram profile, they notice your story, they click on the story, they see the giveaway, they go to your bio link, click on the bio link, enter the giveaway, and then that kicks off the rest of the funnel and the virality of them potentially sharing that giveaway with their friends.

Tim: Yes, that’s right.

Felix: Got it. Now that you’ve built this system in place with this store, in other situations there are other dropshippers that have gotten this kind of success as well. What is the next stage that an entrepreneur should set their sights on after this and this shows success?

Tim: I really try to figure out who my target audience actually is. I had some customers at this point. I had to start at some point, because I wanted to have Facebook Ads in this case study to really have some way to grow and scale my business.

As I did not have any data I could rely on, I just kind of stalked my first customer and figured out what kind of influencers, or celebrities, or big brands she was following. Then I just create a first ad, or a target audience on Facebook, including all the celebrities. I identified these celebrities on Instagram with the blue check mark right next to their name.

As you can target people based on interests on Facebook, I just put in the celebrities’ names, and create a target audience out of this, and then created a lookalike audience out of this in order to start my advertising on Facebook.

Felix: Can you talk a little bit more about how you set up those ads? What are in the Facebook Ads themselves?

Tim: I tested a lot of different stuff from videos, to just a simple, very ugly looking ad. In the end, it turned out that an ad which includes the same wording as I identified in the beginning with the service I did for the interviews on the blog, turned out very well if I then linked them to the product page where I also used the same wording again, and again, and again. This was my best selling product in the end.

The main lesson for the ads is to really have some kind of corporate identity to really have a strong brand appearance that everything matches, that if someone clicks on your ad because most people get a lot of content views, but nobody really gets a lot of sales from it. I think if dropshipper can do themselves one favor, it’s to develop or improve their product pages, and match them with their ads. This was obviously a main lesson for me, in this case study to really know you can [inaudible 00:50:34] the last one.

Felix: When you are creating these Facebook Ads, I’ve seen campaigns, I’ve seen Facebook Ad Managers that are crazy. They have so many different campaigns and Ad Groups and everything. What’s you’re like? How do you recommend people start off when they are ready to spend their first few dollars on a Facebook Ad? How many campaigns should they create? What kind of configurations do you recommend?

Tim: I would start with one simple ad, and then just target for content views. Then as soon as you get a lot of content views, or some content views, which are about 50 or 100. Then you can set up a new ad, create a custom audience, all of these content views, and then set up a new ad, where you aim for add to cart, and then do the same with purchase.

You have three ad sets where one is for content views, one for add to carts, and one for purchases. You [inaudible 00:51:35] running all these three ads, but this only works if you know who your target audience is, if you have found your sweet spot. This requires some kind of or a lot of research work.

Felix: Is this research work just from that earlier period where you are manually reaching out to customers, and learning about who’s responding that way, and interviewing these influencers? Are there other ways that you found to successfully identify who your customers are exactly so that you can set up your Facebook Ads for success?

Tim: I think with more time and with a higher budget, then they should be definitely spend more money and more time on Facebook Advertising tests, running a lot of A and B test to really figure out who your target audience is, but as I was very limited on the time with just 30 days to just start from scratch, I figured out I had only this option. I’m pretty sure there are more options, but this was my approach and it worked pretty well for me.

Felix: That $9,000 in revenue. Can you Break down what portion of that, or approximately what portion of that came from Facebook Ads, verus these more manual approach, versus any other approaches you have taken to drive traffic and sales?

Tim: Yeah, I think around $6,000 came from Facebook. The rest came from the giveaway. The other one was from Instagram, from the direct messages, and other sales channels, but which were not that big of impact.

Felix: Okay. When you sat down to create that first Facebook Ad campaign, and you were setting up your targeting, what informed that targeting? How did you know who to target at that point when you sat down to set up that first campaign?

Tim: I just targeted the target audience I came up with when I looked up my first customers, who she followed. This was when I set my first target audience up, and I just targeted these people, and wanted to get data out of it. It was not initial for sales, I just wanted to gain information and to create a new target audience, which then would help me to create or to narrow down my target audience.

Felix: I got it. You first are looking at people that have already purchased from you in the past. Are you building a lookalike audience off of that?

Tim: No. Not at this stage. I just created a custom audience.

Felix: Okay, create a custom audience based on the customers that you already have. It’s just to get some traffic into your store to essentially give the Facebook algorithm some data to work with.

Tim: Yes. That’s right.

Felix: Got it. Okay, so if anyone wants to check out the store, it’s sunyez.com. Tim, you also run Dropshipping Consulting, dropshipping-consulting.com. The Oberlo case study, which is for the same story that we talk about for this interview, we’ll include that in the show notes on the Shopify blog. We’ll link over to that.

What’s next for you? What’s the current or next case study that you are working on?

Tim: The next case study is actually with just … I want to prove that a business does not need to cost any money. I just want to see how it works out in the end. I’m just creating this just for fun, and then see how this works out. But beside of this, I’m doing the consulting. I have a lot of clients right now to help them get started. But yeah, that’s actually my stuff right now.

Felix: Awesome. Thank you again so much for your time, Tim.

Tim: Yeah, thanks for having me.

Felix: Here’s a sneak peek for what’s in store the next Shopify Masters episode.

Speaker 3: What is their journey on a day to day basis, and how can we create apparel to fit that lifestyle.

Felix: Thanks for tuning into another episode of Shopify Masters, the eCommerce podcast for ambitious entrepreneurs, powered by Shopify. To get your exclusive 30 day extended trial, visit Shopify.com/masters.