(Transcript continued from the Episode 145 show notes and audio podcast)
This week I want to talk to you a little bit about this drop-shipping thing one more time. We’ve had a few more really important and intelligent frequently asked questions come in that I want to answer for you. If you’re on the fence about wanting to mess around with drop-shipping but you have these few nagging questions, I want to make sure that we get those answered for you.
Before we do that, I have a favor to ask you. On my website at LateNightInternetMarketing.com I’ve been working on the re-do of that slowly but surely over the last year and that’s almost complete. One of the things that I need to add there and on the sales page for my upcoming courses is some testimonials.
For the courses, most of the testimonials will come from people who have actually taken the course, but when you first start a course you need something to put on there. So, I have a request for you. If I have helped you in some way, if you’ve enjoyed the podcast, if I’ve given you ideas that have helped you in your business, if we’ve interacted in some way, if you’ve used my material in a way that helped you in your business, I would really appreciate it if you would go to LateNightIM.com/testimonial and leave a comment for me that I can use on one of these websites that will help people understand that I’m a good guy. That would make me really happy if you take a few minutes to do that. It takes about three minutes to do that. In many cases I’ll be using your testimonial right on the front page of some website somewhere and referencing your website and so forth.
If you have something nice to say, or even if you don’t, go ahead and leave me a comment and tell me about how I’ve helped you, how the podcast has been valuable to you, whatever comes to your mind that you think might be helpful in that context of testimonials. I would really appreciate that. I’ve already gotten several from loyal members of the Late Night Internet Marketing Facebook Group, but I’d really like to open it up to your guys as loyal listeners of the Late Night Internet Marketing Podcast to let me know how the podcast has helped you, how it has motivated you, how it has changed your business in a positive way. I’d love to hear from you.
In addition to those being helpful from a business sense, I just really enjoy hearing about how the work that I’m doing is helping you to do the work that you do. That’s part of the reason that I do it, so when you share that feedback with me it really means a lot and I really appreciate that.
A Quick Drop-Shipping Recap
In case you’re just joining the show for the very first time, in Episode 143 and 144 we’ve been talking about drop-shipping. The model that we’ve been talking about is a model where you source products from AliExpress and you use software like Shopify and Oberlo. You source the products from China and you advertise them, probably on Facebook or other places like Facebook, Instagram and so forth.
You cause people to impulse buy things that they didn’t know ahead of time that they really needed but once they saw your ad on Facebook they knew for sure that they just had to have that item. They pay you for the item and then you use the money that they gave you to drop-ship the product to them and you keep the profits to pay for your ads and put some money in your pocket.
That’s how this sort of drop-shipping model works. If you are interested in a course on how to do this, a free course is offered by Shopify and you can check that out. That’s a really cool course and I highly recommend it. If you just want more information than what you got on the podcast, head on over to LateNightIM.com/dropship for additional free information about that model.
There are some more questions that people asked that keep them from getting started…
Do Products Have to Ship From China for this to Work?
One of the questions that people ask is, “Can I get my products from somewhere other than AliExpress? I’m not all that comfortable with drop-shipping from China, I don’t want to do that and I don’t want products from China. I want to drop-ship from the United States,” or Germany, or wherever, “because that’s the kind of drop-shipping operation that I want to have.”
Yes, absolutely, you can drop-ship from anywhere. If you Google dropshippers, drop shipping sources, or places that you can drop ship from, you will get an amazingly long list of all of these different drop-shipping companies that you can use. Unlike AliExpress that sell directly to retail, some of them only do drop-shipping and are set up for that sort of thing. So there are lots of options outside of AliExpress.
The only reason that I focus so much on AliExpress in these particular examples is that it is super ridiculously dead simple and easy to get started, because Shopify, Oberlo, and AliExpress all work together very easily. All of the approval processes and barriers to entry are incredible low. It’s just really easy for someone to get started with a limited amount of experience.
So, yes, there are other sources for drop-shipping and I encourage you to check into that. As a matter of fact, if it’s just the China piece that is bothering you and you’re wondering about United States, even AliExpress has suppliers that ship from inside the United States.
You can check that out when you’re searching for products to promote on your site inside of AliExpress, one of the limits that you can place on the search is you can tell it to only show suppliers that ship from the United States. That’s another way that you can do that.
Now, since AliExpress is mostly coming from China, that is going to dramatically limit the products that you can actually promote. But, if that’s a care about of yours – and I completely understand that – I think that you can do that just fine from AliExpress.
Let me also say that I think that’s a limiting belief. The world is getting smaller all the time. Most of the manufacturing in the world happens in China anyway, so even if you’re drop-shipping from the United States, 9 times out of 10 your products are made in China or in the Far East somewhere. If that’s something that is important to you, you can absolutely at the very least check that out and you can also check out other dropshippers.
One way that we see drop-shipping success that is also outside of this model is you may have some special knowledge about some particular area of expertise that you have because of your day job, for example. Let’s say that you work for a swimming pool company and because of that you have special relationships with swimming pool filter manufacturers.
Your idea is you want to talk to those buddies that you’ve been working with for the last 20 years at the filter supply company and you want to create a drop-shipping website specifically for swimming pool filters that leverages your special relationships that you’ve built with some particular supplier and you want to drop-ship their products.
You can go to lunch with those guys and make an arrangement. That’s great and I think that’s another drop-shipping model. It’s not as broadly applicable to everyone because it relies on your particular life experience, but those opportunities are out there as well and I hear of a lot of people that are having success in that way where they’re leveraging relationships that they already have in the drop-shipping space.
I hope that answers that question about shipping from China.
Can I Do Drop-Shipping if I’m not in the United States?
Margerie who helps me with the show notes asked me this question, “What if I’m in another country?” If I want to run this drop-shipping business from the Philippines, or from Singapore, or from Europe somewhere, what do I do?
There are two questions buried in this. One is can I have a business that is located in another country and run it from there? That’s the first question. The answer is yes, absolutely. People that are doing this drop-shipping model are doing it from anywhere in the world, quite literally.
The complexity is only that when you’re dealing with AliExpress, getting money back and forth from Shopify and PayPal – so you’re paying AliExpress and then you are dealing with getting money from Shopify and PayPal – as most of you who live in other countries know, there are charges that are associated with that. If you’re using a credit card with AliExpress, you may have foreign currency exchange fees. You certainly will have fees when you bring money back into your home country, because your money is going in a big circle.
The customer that you’re dealing with is giving you money through Shopify, which is a U.S. based company, or through PayPal, which is a U.S. based company. If you don’t have a U.S. bank account, you’re going to have to do something to move that money from PayPal or Shopify into your Philippine bank account, for example.
You’re then going to need to use that money to buy the product on AliExpress and to pay Facebook. When you pay Facebook you’re going to need to use a credit card and if your card is not a U.S. credit card there may be fees there. Quite frankly, I’m not an expert on this topic of credit card fees and all this kind of stuff, but that’s the thing that you have to worry about if you’re outside the United States.
Can this work? Absolutely. In fact, a huge number of the people that are working in this 100K Factory program are working from outside the United States. Particularly, there are a bunch of people in Europe and Canada, but also people in Asia and Australia, all over the world really. This totally can be done, it’s just an issue of managing fees.
For example, I understand that if you’re in the UK that you can get a U.S. bank account from Barclays. I’ve never actually don’t that, so I don’t really know. But there are ways that you can get U.S. bank accounts, I’m told, in many cases. If not, you can just adjust your prices and margins to handle the fees. That’s usually not a big deal, because we’re usually only talking about a few percent there.
There are other things that you can do related to offsetting those fees. For example, you can look for credit cards that pay cash back. In fact, I have a credit card that I use for social media buys that actually pays a higher cash back percentage on social media purchases. It’s a business credit card and one of the things that it pays cash back on preferentially is social media purchases. You can look into that.
You can also look at AliExpress loyalty programs, there are a couple of them. One is called AliBonus and of course there’s the AliExpress affiliate program. There are ways that you can leverage programs to get cash back and improve your margins on your purchases from AliExpress. All of that is stuff that you can look at to help you run your business outside of the United States.
The bottom line answer to that question is if you are outside of the United States you absolutely can run your drop-shipping business from outside the U.S. and many people do.
Start Off Targeting Areas with Money to Spend
There’s one more thing that I want to talk about with regard to your countries that you’re working in. That is that the advice that I hear is that the best place to start your drop-shipping business is actually in the United States, to actually market to the United States.
That has to do with the fact that there is a lot of money to be had in the United States, it’s an affluent country, there’s a lot of Facebook users in the United States, and there is a lot of consumption in the United States. People in the United States recklessly buy a lot of stuff that they don’t need, I guess.
I read that it is recommended many times that you start your drop-shipping business in the United States and fan out from there. Can you start in Australia or some other highly developed country with a high standard of living and lots of expendable income? Absolutely.
Would I start a drop-shipping business in country where there was less money available and maybe less exposure to Facebook? Probably not. I probably wouldn’t choose to start my drop-shipping business in a country with less economic development.
What you’re looking for in this particular model that I’ve described is taking advantage of people making impulse purchases with disposable income. You want to target countries that have a lot of this disposable type of income and the United States is very high on that list of places you can go where there is money that people are spending.
That’s the other thing about starting. For example, starting a business in the Philippines, I think most people that are starting this drop-shipping business from the Philippines are actually marketing to the United States. They’re selling products in the United States, their store is set up on Shopify, which is based in the United States, the currency in their store is U.S. currency, and they’re marketing on Facebook. When they’re starting their store they’re limiting that marketing to people in the United States, the website is in English, and so forth.
I hope that helps with that question about starting country.
Handling Returns and Customer Service in Drop-Shipping
One other thing that I want to tackle, and this is a very frequently asked question. I can’t remember if we talked about this a little bit, but I’m going to address it here. What about returns?
People worry that they’re going to sell something and someone is going to return it or there is going to be a lot of customer service burden and so forth.
With regard to customer service, I think the very simple thing to do is to set up a support email for your store. If your store is called Bubba’s Yellow Cameras and you’re selling yellow cameras, you would set up an email called [email protected]. Then you would set up a form on your Shopify website that says, “If you need our help, please fill out this form.”
When they filled out that form their information, whatever they typed in, including their email address and so forth, would be sent to [email protected] and you would answer the support ticket, just like you would expect.
In my case, I have all this tied to a free support application that I’ve talked about before called HelpScout.net. HelpScout is my very favorite help desk. If you send a ticket to [email protected], you will get yourself entered into my HelpScout system and you’ll get a nice email back that says I’ll contact you as soon as I can and so forth. It’s exactly the kind of stuff that you would expect for a customer service experience.
That’s how you handle customer service, but the question is what do you do about returns. I think you have to really ask yourself what’s really happening here. You just sold a $20 product, let’s say, the customer gets it and they don’t like it. It’s broken or it didn’t work the way they expected, or whatever.
They’re going to send an email to your support. The very reasonable thing that you’re going to do is say, “Sorry you had this problem. We deeply regret it. Please describe the nature of the problem and we will issue you a return merchandise authorization number.” We’ll give you permission to send it back to us. Tell us what happened. Maybe ask them to send pictures if that’s appropriate. We will take care of it.
A certain number of people when they get your answer that you need more information are going to look at that and say, “I’m not dealing with this over an item that I paid $17.95 for,” and they’re going to throw the thing in the trash. Some people will actually answer your question.
You’re not trying to be difficult, you’re just saying, “I need information to prevent return fraud. I need information to process this return.” This is no different than what you see with big companies in the United States. They want to know the serial number or something, they want some information and an order number to prove that you’re a real customer and that you really bought the thing.
That’s all you’re asking for is the order number and some description of the problem, and maybe a picture if it’s defective. And you will happily return their money, because after all you probably have something on your site – I definitely recommend this – like a 30 day no questions asked money back guarantee where you’ll return their money for any reason.
They’ll send you this email and you will send them back some authorization for the return. I recommend that you generate an official looking return merchandise number and you give them some instructions, “Please ship to this address and put this information on the outside of the package.”
For me personally, I use a PO Box in the United States. There are centers that you can pay for, if you Google around for fulfillment centers and other things like that, there are people that will provide this service for you. For right now, I’m using my very own PO Box right here in the Dallas area.
If people ask for a return I tell them, “Sure. Let me know what the problem is and I’ll give you the return information.” They send me back the information that I need to make sure that it’s a valid return and I tell them where they can send it with shipping instructions.
At this point, they need to pay for shipping. I don’t pay for that. They need to box up their thing according to my instructions. They need to put the RMA number on the outside of the box and they need to ship it to me. If they do that, then I will absolutely take their return and either refund their money, or more likely replace the item with an item that is not defective. If I need to do that, what I will do is order them another one from AliExpress.
The thing is, though, for a $14 item or a $20 item, most people aren’t going to mess with this.
In fact, having shipped over 100 items now out of my store in the last month, I’ve not had one single return ever. Not one. Not even a request for a return. I haven’t even gotten to the point where someone said, “Hey, this isn’t working right and I need to return this. Can you help me?” Nothing.
I’ve had one customer service question, which was someone who bought an item from me and wanted to know how to use it. It was an electronic item and they didn’t understand how it worked. I answered that question and that was it. That’s the one customer service question that I’ve had related to product returns.
I’ve had one other customer service inquiry related to shipping times. Someone was asking me where their product was and I told them. I looked up the shipping based on the tracking number and it was actually scheduled to be delivered that day. They literally went down to their mailbox that day and the product was there, and that was the end of that conversation.
That has been the extent of my customer service experience with this Shopify store.
I think a lot of that has to do with selecting really good suppliers and we can talk about that in a second. It also do with staying away from products that generate a lot of returns.
I think products that generate a lot of returns are things like clothing, because oftentimes clothing won’t fit. I will tell you, while I’ve never dealt with clothing on AliExpress, I hear that often clothing on AliExpress is difficult because the size varies so much. A medium shirt from one vendor is going to be different than a medium shirt from another vendor, and the sizes are all over the place.
That means that your customer is going to get a shirt, it’s not going to fit, they’re going to want to return it and they’re going to want you to ship another shirt to them and that sort of thing. That can be a customer service burden. My recommendation, particularly when you’re starting out, stay away from stuff that is likely to be returned.
Rings are another example of something that is likely to be returned, because ring sizes are kind of difficult to predict. Heck, I have trouble specifying what my ring size is when I’m in the jewelry store, much less when I’m trying to buy something online. That’s another example of something that is likely to generate a lot of returns.
The other thing that I would say is when you’re picking products out of AliExpress pick products with lots of positive reviews. When you’re looking at AliExpress you can see that some products have thousands of orders and hundreds of four and five star reviews. I don’t know what the real accuracy of all of these reviews is, but obviously you want to try to pick stuff that looks like people are saying good things about it, because when you’re happy with a product you don’t return it. That’s kind of the issue there.
With regard to the suppliers themselves, the suppliers are also rated. AliExpress has this complicated rating system with stars, diamonds, and crowns. I think it’s the crowns that you want to pick, I can’t remember.
You want to pick items with lots and lots of transactions, lots of orders so that you know it’s a popular item. You want to pick suppliers that are supplying that item with a very high rating, 97% or higher. You want to make sure that supplier is a good reputable supplier using the ratings system inside of AliExpress.
I hope that helps you. That’s a few more drop-shipping questions. If you want to really get the full skinny on how to implement this drop-shipping thing to try it out, you can do it almost for free. When I say almost for free, you’re probably going to want a domain name for your store, so that’s going to cost about $8.
You can do this almost for free by going to LateNightIM.com/dropship and that’s going to give you the course from Shopify and a 14 day free trial from Shopify. The Oberlo software is free to get started with. That will explain to you how to get started on AliExpress for free. AliExpress is free in the same way that Amazon is free, they make their money when you buy stuff. It’s free to get started and get products into your store, you don’t actually need to spend any money at AliExpress until someone has already given you money.
The Analysis Paralysis of Getting Started
I wanted to have a quick discussion about getting started in your internet business. This is a topic that maybe we don’t spend enough time on. I keep hearing from people and seeing people that are almost paralyzed, or not paralyzed but just won’t start. They know what they want to do, they feel that feeling that they want to get started, but there’s a list of things that are keeping them from getting started. I wanted to address those people.
I just recently had a conversation with a listener in the Late Night Internet Marketing Community over on Facebook. I’m not going to call this guy out, but he knows who he is. I talked to him and said, “What are you doing? What are you going to do?” He said, “I really don’t know what I’m going to do.”
I said, “What hobbies do you have?” He said, “My hobbies are learning about internet marketing. I don’t do anything else. I listen to podcasts and I’m churning on this stuff and just gobbling up all of this information.”
Then I have another person that I talk to in the ‘real world’ about this kind of drop-shipping thing and what it’s going to take to get started, and that person indirectly was saying, “I just haven’t pulled the trigger. I’m still learning. There are so many questions and I don’t know what to do.”
I think sometimes you just have to start. You just have to start. You have to ask yourself why is it that you haven’t started. Many times the reason that you haven’t started is fear of failure.
I want to encourage you to really be honest. If you’re in this place where you know that you need to do something and you haven’t done it, you need to ask yourself why. Why haven’t you gotten this thing done?
For me, I’ve had examples of this with courses that I’m working on that never seem to get finished. I have to ask myself why isn’t that done? Is it really that I haven’t been able to find the time over the last two and a half years to get this thing done or is there something else?
For you, with whatever it is that you’re doing, is there some underlying fear that you need to think about? Are you really afraid that you’re going to screw up? I think a lot of times that’s really what it is, you’re afraid that you don’t know what to do and you’re going to look foolish, or people are going to think you don’t know what you’re doing, or you’re going to feel foolish because you’re going to make a mistake, or you’re not going to do it right the first time and that’s going to result in something bad.
I promise you that you’re not going to do it right the first time. I’ve been doing this stuff for a long time and I never do anything right the first time. It’s okay. I give you permission to mess up. Especially on something like drop-shipping or starting a website, there’s just not that much at risk, there’s not that much money involved.
You picked the wrong domain name? No problem, domain names cost $7 – $9, go get another one. It’s not a big deal.
Figure it out as you go. I want to encourage you to set aside that fear of failure and just take action. Everybody I know that is successful, the way they got there was by taking bold action. You are no exception. You have to get out there and go do stuff.
For those of you that are stuck in this loop of getting a PhD in whatever topic it is that you’re wanting to work on, or you’re so busy worried about internet marketing tactics that you haven’t figured out exactly what it is that you want to do, let me encourage you to pull back a second. It’s not about the tactics.
If you’re going to have a successful business online, you’re going to have to add some value. If it’s a drop-shipping store, you’re going to have to add value in the marketplace by showing people products that they didn’t know they needed and giving them the opportunity to buy those cool products.
Like the blow up couch that I was talking about the other day. I didn’t know that I needed that and now some marketer has presented that to me and it’s cool, and it puts a smile on my daughter’s face.
Whatever it is, you’re going to have to create value by matching offers to buyers, like we’ve talked about many times. If you’re going to start some kind of information business, like a blog around a particular topic, you’re going to have to add value. All of the marketing tactics in the world are not going to matter if you aren’t creating some value.
Instead of being paralyzed by studying all of this internet marketing stuff, what I want to challenge you to do is pull back a little bit and imagine what it is that you want to accomplish. What do you want to do?
In the case of the Facebook group, the answer was, “I don’t have any interests. I’m focused on internet marketing, focused on figuring out this internet business thing.” That’s not going to work. You’re going to need a purpose for doing things. You’re going to have to figure out what it is that you want to accomplish. What is your business objective online?
I think the best business objective is fundamentally to help people profitably. I think that’s really what it is that you want to be able to do. To say, “I help people, profitably, by teaching them how to get rid of their psoriasis,” or teaching them how to build a business online late at night, or by teaching them copywriting, or by teaching them how to podcast, or by teaching them social media, or by teaching them how to build passive income.
Pat Flynn is helping people profitably by helping people create passive income.
Cliff Ravenscraft is helping people profitably by teaching them how to podcast and how to take their message to the next level using podcasting as a tool, or how to take their business to the next level by using the lessons that he has learned in his podcasting journey.
Ray Edwards is helping people grow their business and one of the ways that he does that is by teaching them copywriting, and he does that profitably because he is helping people and people are willing to pay for that.
Michael Stelzner is helping people stay on top of social media and grow their businesses by teaching people about social media, helping them stay abreast of changes in the social media space, and he does that very profitably, primarily by creating this incredibly valuable conference called Social Media Marketing World. He’s helping people, adding value, and that creates a profit.
You need to be able to say, “I am doing this thing and it’s helping people.” I think that’s really important.
If you want to get unstuck, you essentially have to stop studying everything and take action. Take action with a purpose. You have to decide what it is that you’re going to try to accomplish, how you’re going to try to help people, and you have to decide what the next step is.
Then you have to employ something that I learned from Jeremy Frandsen called ‘just in time learning.’ If you’ve decided that you’re going to help people profitably by teaching them how to do woodworking and you know that you need a website, your next step is to register a domain name. You need to figure out how to register domain names.
There’s a podcast episode about that. You need to listen to the podcast episode, download the guide on how to register a domain name well and how to pick the right one, and you need to just go do that today and take that action, and not be caught up in what you’re going to do about Facebook advertising for this website. Because guess what? You don’t have a website yet. You need to register the ding-dang domain name. You need to decide why you want a domain name and you need to go get it.
That’s really the thing that I think will help a lot of you get unstuck. For those of you that are stuck, it’s okay. I’ve been stuck. I give you permission, you have Mark Mason’s permission to unstick yourself, figure out what it is that you’re trying to accomplish, and take that next action.
Only worry about what the next critical path action is. If you do that over and over again, focus down on the next action that helps you to accomplish your big goal, whatever that is – helping people learn woodworking, helping people understand how to sell t-shirts on Teespring – whatever it is that you’re doing, if you figure out what the next step is and focus only on that and take some action on that today and not wait until tomorrow, to actually do something every day to accomplish that next action, you will accomplish the next action and then you can work on the next one and the next one. You can eat that elephant one bite at a time and be incredibly successful over time.
I hope that helps you and I hope you have an absolutely fantastic week.
