🚀 Taking a Drop Shipping Business from Zero to One Million Dollars per Month: My Experience and Formula for Success
Drop shipping has been a popular business model for many years, but it's not without its challenges. As someone who has been in the industry for a while, I can attest to the fact that it takes a lot of hard work, dedication, and a bit of luck to be successful. In this article, I'm going to share my experience of taking a brand from zero dollars to over one million dollars per month. I'll go over the struggles we faced, how we overcame them, and the formula that it takes to be successful with the drop shipping business.
Finding the Right Product
The first element of success in drop shipping is finding the right product. Your business will only be as successful as your product, so it's essential to find something that people want to buy. In our case, we were able to find a really good product that contributed to our success in this brand. We didn't use any specific strategy to find this product. My business partner found it by seeing that an e-commerce brand was selling this product and making quite a bit of money, but they had a bad website and bad advertisements. That gave him an indication that there was room for improvement, which is a great lesson for beginners in their e-commerce business. Find something that's working that you can improve upon.
Validating the Product
Once we found the product, we needed to validate it. We started with very little investment, and for the first advertisement that this brand was running, it was mostly stock images and videos that were found online. This helped us validate the product quickly rather than investing a ton of capital in something that we didn't know that worked already. The reason we knew this product was going to be extremely successful is that once we started advertising it, the return on ad spend was really high. For every one dollar we were spending, we were getting nearly three dollars back.
The Struggles
Even though things were looking great in the beginning, everything started going downhill fast. Our payment processing got completely shut down, and basically, what that means is when a customer went to our website, they couldn't even place an order, which meant that our business was basically shut down. We did everything right, our customers' orders were being shipped out fast, and we had good response times with our customers. What made everything worse is that I was on vacation with my girlfriend, and it basically ruined my trip.
The Blessing in Disguise
This ended up being a blessing in disguise because instead of taking this as a complete loss, we took this as an opportunity. Instead of focusing on making more money for this brand, we realized it was time to focus on building the foundation. We decided that before we reopened for business, we needed to improve a few things. Number one, our product quality, and number two, our shipping speed. Up until this point, we had made about a hundred thousand dollars in sales, which meant that this product was already validated. So we decided to make the switch from a 100% drop shipping fulfillment model to a fulfillment model that I call 3PL drop shipping, which is essentially the same thing as drop shipping because the items are being shipped out by someone else, but the only difference is that you need to get the product sent to the United States. We ended up investing a majority of these profits to get items sent in bulk to the United States to speed up this shipping time.
Scaling the Business
After we made these changes, we started scaling the business. We invested in more content and started diversifying our traffic sources. We implemented Facebook ads, and it started to work out pretty well. We cleared over a hundred twenty thousand dollars in sales that month and maintained a 25% profit margin. This was our very first six-figure month, so we were absolutely ecstatic at the progress we were making.
More Creatives and a Higher Conversion Rate
The higher your conversion rate store has, the more profitable your ads are going to end up being. So we focused on these two metrics and invested over five thousand dollars in getting new creatives to run for this brand. Ultimately, it ended up paying off tenfold. We were averaging around eight thousand to nine thousand dollars revenue every single day, and we were still maintaining that 25% profit margin.
Reinventing the Business
After hitting our biggest month yet, there was a lot of pressure to keep this momentum going. We knew we needed to reinvent the business to maintain our success. We started reinvesting very hard, bringing on new advertising channels, and hiring new team members. We had our very first forty thousand dollar day on July 1st, which blew my mind. We ended up clearing over a million dollars in sales that month, which was my biggest month drop shipping in the last seven years of being in this industry.
Conclusion
In conclusion, drop shipping is not dead, and it takes more than luck to be successful. It takes hard work, dedication, and a willingness to adapt and change. Finding the right product, validating it, and scaling the business are all essential elements of success. By focusing on these elements and reinventing the business, you can take your drop shipping business from zero to one million dollars per month.
Pros
- Drop shipping is a low-risk business model that requires little investment upfront.
- You can sell products without having to hold inventory or ship products yourself.
- You can work from anywhere in the world as long as you have an internet connection.
- You can scale your business quickly by investing in advertising and diversifying your traffic sources.
Cons
- Drop shipping can be highly competitive, and it can be challenging to stand out from the crowd.
- You have little control over the quality of the products you sell, which can lead to customer complaints and returns.
- You may have to deal with long shipping times, which can lead to unhappy customers.
- You may have to deal with payment processing issues, which can shut down your business temporarily.
Highlights
- Finding the right product is essential to success in drop shipping.
- Validating the product quickly can save you money and time.
- Focusing on a higher conversion rate and more creatives can increase profitability.
- Reinventing the business is necessary to maintain success.
FAQ
Q: Is drop shipping dead?
A: No, drop shipping is not dead. It's still a viable business model that can be highly profitable.
Q: How much money do I need to start a drop shipping business?
A: You can start a drop shipping business with very little money upfront. You'll need to invest in advertising and website development, but you can start small and scale up as you make more sales.
Q: How do I find the right product to sell?
A: Look for products that are in high demand but have low competition. You can use tools like Google Trends and Amazon Best Sellers to find popular products.
Q: How do I validate my product?
A: Start with a small investment in advertising and see how well the product sells. If it's profitable, you can scale up your advertising and invest more in the product.
Q: How do I scale my drop shipping business?
A: Invest in more advertising channels, diversify your traffic sources, and reinvent your business to maintain success.
