What You Will Learn
Today we will go over my first 30 days drop shipping on eBay, what you should expect when starting out, and how I managed to start with ZERO out of pocket cost. I will give you the tools I used, the strategy I implemented to find my first winning product, and some truths behind drop shipping as a business model. As an added bonus, we will cover how I plan to move forward in order to expand on my online drop shipping business.
Everything included in this article comes from real world experience and is what you could expect from starting out with drop shipping online. I’m a full time father, business owner, and an aspiring musician. On top of all of that, I run several websites and I’m always looking for a way to generate more income with less time. Needless to say, I have very little time to invest in any one area. I structure my time wisely and utilize methods that will limit my time spent on any single task. At Biz-E, we encourage you to do the same.
If you work full time, are a parent to a young child, a student, or just limited on time in general, then this business model, as well as the Biz-E Newsletter, will suit you very well. All of our content is designed with the busy entrepreneur in mind and we offer “Modern Money Solutions” by giving you the keys to success in both online and every day business. Our goal is to keep you moving and to provide you with knowledge in order to save you time and money.
Let’s be honest, the reason you want to start an online drop shipping business is to earn extra income with little to no up-front investment. Sure you can get pretty far without any immediate costs, but I’m here to tell you that your largest investment will be your time spent and the knowledge you retain. Eventually, it will cost money to make money (like with anything else) if you plan to quit your day job and have a substantial income from your online business. Luckily for you, any money invested will be pure profit from product sales and we’ll walk you through the steps to success as well as offer you a consistent platform for expanding your knowledge on drop shipping and making money online.
I started my first drop shipping venture on about January 5th, 2020. That’s when my first sale was made. I always knew I wanted to start drop shipping but never knew where to start. So where did I start you may ask? About 30 days before my first sale, I began doing some extensive research into drop shipping as a business model. At this same time I was keeping an eye on social media to see what might be trending and I was trying to brainstorm product ideas. I gained some insight into the market and decided I needed to pick a platform to begin dropshipping on. The platform of choice to was eBay due to an extensive existing customer base as well as my ability to start selling with no costs. My only problem was I had no clue where to begin as far as picking a product.
There’s several suppliers and ways you can source products but I began with Aliexpress.com as it is the most known resource for drop shippers. At this point, I knew where I wanted to source my product from but I didn’t know what product or products to choose as there’s tons to choose from. What do you resort to in this case? Prior experience and common knowledge is where you would want to begin. Being a salesman in my past positions and business led me on the path to choose a unique product that I was confident would sale and that anyone could use. I spotted something that caught my eye on social media and I went for it. More on this later in the article.
So I found my product, as well as the niche that the product fits into, and I narrowed down on marketing towards that audience. The way I did this was by using a captivating title and mentioning a popular item that this product was related to and within a couple days, I began making sales. Simple enough; right? Well, not exactly. There was some issues with my tactics as well as order processing that we’ll go over.
I’m not going to lie and say I didn’t have any prior knowledge, because I did to some extent, but I believe anyone interested in the business has some sort idea of how it works. If not, that’s okay because we will go into detail about everything here in this article. I still had to do my research but was given a head start on what to expect where my brother has been doing this for quite some time now.
I picked a product that was not yet being advertised anywhere I could find but I knew people enjoyed this product because there was several popular posts of people wearing this item (yes I picked a clothing item). With this product idea in hand, I was armed with reason enough to dive deeper into the product; the best part, I found nearly no competition within the search terms I had investigated. So where do we go from here? I started on my platform of choice in order to determine a couple key factors: price, competition, and sell frequency. After I found this information I was able to determine that yes this product or products related do in fact sell regularly and I was able to find the average sell price of an item of this nature.
Awesome, so at this point I have the idea for the product, how much the item could potentially sell for, and I can reasonably assume that this product will be selling regularly enough to generate some reasonable income from this singular item. Now I have to find the product from a supplier. This part took a little bit of time because I wanted to find something rather specific and something that related to an already popular item. Some sourcing websites do allow for you to put in requests or even get the particular product manufactured that you’d like but I was successful in finding the product that worked best for me. There were several suppliers with the same product so I compared the reviews as well as pricing to determine exactly which one I wanted to go with.
On to The Good Stuff: The Keys to Success
We have a simple formula that we go by when trying out new products for the first time and how we get into a new niche and there was a specific way we went with starting our first drop shipping business. The best practice is to discover a product within a specific niche, research that product, and then test your product. Finally, after you have made some sales, invest your profits into marketing and rinse and repeat for every new product that you want to release. If you want to get really good, build your brand and capitalize off of that. We will not be going into too much detail about building a brand here today but in a later post we will talk all about this specifically and a few different ways you can go about doing just that. If you start now, in one niche, you will ultimately know the customers that you are targeting and you will know what they are looking for which will help you stay ahead of the game when a new product comes to light or even if you want to move on to a bigger side of e-commerce and actually get some products manufactured yourself and stored in a local warehouse.
There’s a ton of ways you can sell online and here we go over the way we found success, with our single product, and how you can duplicate this process in order to see success even in your first month of drop shipping on eBay.
Step #1: Pick a Winning Product or Niche
– This is the single most important step to your success as an online drop shipper so be sure to take your time with this one. We will say this time and time again; knowledge is power therefore you must find a niche to get into and know it well before attempting to enter the market. Read to the end in order to find the tools that you will need to begin your research on your product or niche.
My first winning product was actually found simply by chance and some knowledge of how markets work. What I did was some social research, and not even intentionally. I was scrolling through Facebook and I kept seeing in people’s random photos, time and time again, this one particular product. Now, I am still making money from this product therefore I will not provide you with the exact product I found, but I will tell you this: it’s something anyone can wear; and boy do they wear it.
Pro Tip: This is one major way to find a winning product or niche; by simply paying attention to the things you see online or around your home or city.
Nobody was speaking of this product, and I believe this is what led me to a successful first month. It was simply something people enjoyed, but no one was focused on it so the market was essentially untapped potential. This is where I stepped in. I found a supplier for this product, connected it to an even bigger audience by providing something a little more desirable and different than what was already offered, whilst maintaining a reasonable and competitive price range for similar products.
My product resonated with a couple different groups of people. First, it connected to people who could use this product on a broad spectrum. After that, it sparked interests with enthusiasts of a popular brand and gave them something the major brand simply does not offer. Keep this in mind when you are deciding on a product; the more area’s of interests you can reach while still having a narrow and dedicated audience, the better off you will be. The “wow factor” must be present within your product. If the product itself doesn’t have any particular “wow factor”, that’s okay because you can create it within your marketing and or promotions.
Even in the most flooded markets, there will always be room for success if done strategically (my brother is a prime example of this), but at the end of the day if you find a product or niche that is a hot commodity, useful, or offers something different (ie: that “wow factor”), with little competition, you will always have greater potential for success.
Step #2: Research Your Product or Niche
You have brainstormed and done some light research on the product or niche you would like to get into. Now is the time to dive deeper into that idea in order to get some hard numbers on what you can expect.
-When selecting a product or niche to invest your time and or money into, you want to ensure that the product is actually going to sell and that you can source the product at a reasonable enough price in order to make a profit. The product may seem amazing to you but that’s not going to make you serious money on thought alone without facts behind it. You will be able to profit by targeting specific locations with products that are doing well in that area but not as good in other locations. Detail on this is for a later time. For now, we are only testing products to see if they are worth investing any more time or money into which typically involves targeting a wide audience at first, then you would transition into a more narrow audience after you have gathered some customer data. If you have already gathered some geographical information on a product that you like, be sure to store that in a note pad somewhere or in the back of your mind as you will need to have that information when we get to investing some of the profits back into more sales of the products.
There’s a ton of product research tools online that will help you with finding a winning product, a lot of which you may have to pay for. Don’t get me wrong, I’m sure there’s plenty reasonably priced products that are great, but we’re here to save money and time right? Right. So below we have listed several free tools that we use every single day for our product research and we will update this list regularly when newer or better tools become available. We suggest using a variety of these tools any time you plan on doing product or niche research. The more time you can spend now on researching your product and defining the right terms, the better off you will be. Any one tool could provide useful data if you’re needing to save time. In the beginning, the time you spend on your product learning about it and the customers that you will be attracting will definitely pay off. We will move into how to automate your drop shipping business later; which will save you time.
Here’s the tools we use:
UBERSUGGEST (click here) – Ubersuggest is an amazing keyword research tool that will help you in determining your products potential for success. It will show you keywords that are similar to your product which will help with marketing later on as well as the volume of searches, Cost Per Click (cpc) for Google ads, as well as you potential competition based on a score and your age demographics. Neil Patel has several videos on YouTube and is a great source for learning SEO and he offers this tool completely for free. This tool is based off of Google searches so you will have to take note of this information but do not expect the exact same results when transitioning the product over to an eBay listing. This data will generalize how much people are searching for your specific keywords so you will know if this is something people are already looking for or if you need to change your focus to something more general in order to make your product successful
eBay Sold Listings – This one may seem simple enough but often times it is looked over. If you will be selling your product on eBay you must see if the product is actually selling on this platform. You can simply do a search and filter it by sold and completed listings and it will not only show you the trending price on eBay, but it will also show you how often this product is selling. We like to chose products that sell regularly. Multiple sales in the past week are often good signs. If your product is innovative with a high profit margin, then waiting a little longer may not be of much concern for you but we are looking for hot products that will sell regularly so we can generate an income off of even a single product. You will have to weigh this based on what sort of money you are looking to make it wort it to you.
-Our first product didn’t exactly have anything comparable to check, so what we did was looked into similar products as well as the trend for the popular brand that our product was inspired by and thus we had great information on how popular the item would be and what results to expect form our listing. We based our pricing on a formula that guaranteed that we made a decent profit and left room for potential buyers to make an offer on eBay to weigh our price effectiveness. Nine times out of ten, our pricing was spot on, then for those who wanted to make an offer, we kindly accepted so they would feel as though they got a good deal on the product. At the end of the day we didn’t profit as much by allowing the “or best offer” option, but it did generate us more customers who may have found a similar product but wanted a better price than what we offered.
Google Trends – Google Trends will show you the search-ability of your product or niche and also define where this product or niche is most likely to be searched. Ubersuggest shows a lot of this data, but we encourage you to use multiple resources in order to compare data and to have the most accurate information.
Wonder Search (click here) – Wonder search is a simple tool that doesn’t show as much data but is still powerful nonetheless. It shows the volume of searches, the cost per click (cpc) of the term(s), as well as the competition rating.
Note: When evaluating the search terms; make sure to try to stick with the ones that have relatively high volume and little competition. This way, you will be able to optimize your listings and be able to stand out in a smaller crowd. Don’t get me wrong, you can still make profitable sales in a crowded area but you will have to be more competitive with pricing among many other factors.
Step #3: Test Your Product
Now is the time you need to test your product. For this drop shipping business model we want to eliminate the costs up front. In this area you can really see what the product is capable of doing by simply getting it to the market. We suggest that you start with eBay as it is free to post products and will only cost you if you sell the product a 10% fee of the final sale plus $0.30 and 2.9% from PayPal, that you will take into consideration when listing your product. There must be at least a 13% profit margin on your product in order to cover cost so you can break even. To keep numbers simple, let’s say a product costs $10.00 from your supplier, you would then add on top 13% plus $0.30 that would give you a total cost of $11.60 in order to break even. List your product for less than that amount, you’re losing money, anything over is profit as eBay automatically adds taxes so you do not have to worry about it.
Tip: The fees from PayPal will automatically be deducted from the total amount. eBay fees are typically billed once per month.
If you want to get some serious numbers to work with, start by listing 5 of the same item in one listing. If they sell, double the numbers as you will have a limit on how many items you can sell on eBay at first. Start selling more, and eBay customer service is typically happy to increase your limits. If for some reason your product doesn’t sell, make sure to check the pricing, your description, and pictures to see if there are any errors. If there is not, then maybe this product is not selling at this point and then you would want to start over and test out a new product.
Step #4: Reinvest Your Earnings
This is the next critical step when u are trying to expand your online business. You’ll want to take the proceeds that you made with your product, and scale your product. You will want to build a website based around this product or niche and drive traffic to your website. By doing this, you will eliminate the 10% fee charged by eBay.
We recommend that you check out our posts on building a website but there’s tons of information online that can help you. You’ll want to focus on the niche that your product resides in or even build a single product store. Either way you go about it, make sure you are building a brand for your product. Its relatively inexpensive and easy to get custom packaging, to but a domain name, as well as run advertisements for your product. All of these things are essential when you’re looking to generate a real income from dropshipping.
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