High Ticket Dropshipping Done Right With Anton Kraly

How do you make business problems disappear? Wrap em in bacon for business owners, marketing execs, and anyone trying to grow your business, pump your profits and make.

More while doing less.

Welcome to Bacon Wrapped Business with Brad Costanzo. Sizzling hot business advice guaranteed to make you fat profits.

Every week, our chefs will serve you.

Proven recipes for ramping up your revenue. Now here's your host, Brad Costanzo. All right, welcome back to the show. This is Brad and today I'm going to talk about one of the hottest topics in all of business marketing and some of the hottest opportunities out there. And that has to do with e commerce and specifically dropshipping. Now, if you are new to the world of online marketing and especially e commerce, you may not understand what the word dropshipping means, but it is one of the quickest ways to get started. It's one of the easiest ways to validate a product and to do it without spending a ridiculously large amount of money in startup costs. And if you are familiar with dropshipping, and we're going to go into the definitions here in just a second, then you also may have some concerns and, and some things that you want to be careful with because a lot of people get into drop shipping and then they just screw it up and they don't do it correctly and they end up wasting a lot of time and money because they just thought that you could find any old thing out there, throw some traffic at it, have it sourced from China and you're making millions and millions of dollars. And that's not the case. And I know that's not the case because I've been around the block on this stuff. I've tried some of it myself. I've had some success. I've had some failures. But, but that's why I reached out to anton Kraly from DropShipLifestyle.com and I asked him to come on the show and discuss the way, the right way to do drop shipping and to do it in a way that makes sense, that is scalable, and that you can build a real sound business without, you know, without hitting any of the landmines. So Anton is a serial entrepreneur. He's got 15 years of experience building these online businesses, including dropship lifestyle. It was also voted the best e commerce course by Shopify and it was created to give students the knowledge and tools necessary to create freedom through entrepreneurship. Anton, welcome to the show.

Thank you, Brad. Happy to be here.

Yeah, it's happy to have you. So we were just talking. You live in Austin, Texas. Is that right?

Yes. I've been out in Austin for just over two years now.

Very cool. And drop ship lifestyle. I want to find out a little bit more about your history in E comm. Dropshipping in particular, because it sounds like you've had some good success. And then you started dropship lifestyle.com to kind of help shed the light on this for other people. Is that right?

Yeah, that's right. That's right. I got into e Commerce about 2007. I had my first online store and drop ship lifestyle. I started, I think it was late 2012, early 2013, somewhere around there.

What was your first online store? What were you selling?

Actually, the first one, if you go way back to the beginning, I was actually selling cookies online.

Nice.

Yeah, I started with, literally I had a relationship with a bakery in Brooklyn, New York. That was my first actual business. I had a delivery route from them and I delivered cookies around Long Island. Spent $25,000 for the right to do that. I bought a van, I bought this business, the territorial rights. Didn't like that business at all. Got sick of it really fast. But literally I was 21 years old, had every dime I had into it, plus more. And that's when I first heard about e commerce and thought, you know what, let me build a website called New York Cookie Shop and see if I could sell these things online. So that was the, that was the first e commerce store I had.

I love it. So what was the first, like really successful e commerce store you had?

There was, I mean, honestly I would consider that one really successful. So you know, compared to, I guess the, the other option, which was that offline delivery route business where I would drive around all week to these grocery stores and try to sell them boxes of cookies that they then sold to customers. The online store, within a few weeks, you know, it cost me. That one, cost me $29 to start and 20 instead of 25,000 up adwords to it. I uploaded products and within a few weeks it was making a lot more money than that offline business. So that's kind of what got me hooked. And then from there I thought, you know, if I could do this, if I could build a website, if I could run AdWords, because that's how I was getting all my traffic back then why can't I do it with more expensive products? You know, Instead of selling $20 boxes of cookies, why can't I sell, you know, a $5,000, I don't know, range for your stove topper? Why can't I sell Anything for your house that people buy between 500 and 2,000 bucks. So I started at importing products from China and just going kind of up the up market in every industry and selling more and more expensive things.

Oh, fantastic. So let's, let's back up for the listeners sake and let's define dropshipping.

Sure. So yeah, it's funny you mentioned that right now in 2018, it's one of the hottest opportunities. You see it everywhere on Facebook, being promoted. You see people talking about it on YouTube everywhere. And it's like, it seems almost like it's this new thing.

All you got to do is drop shit. Yeah, it's not that new. It's been around forever.

No, it's been like literally forever. So the first, I guess dropshippers were people that literally sent out catalogs to different businesses and had products in those catalogs and get the term product catalog in your e commerce store now. And then people would call the catalogs and say, hey, I want to order product abc. And they'd say, okay, great, what's your credit card number? And then they would call the supplier or the manufacturer of that product and ship it to that customer. So all drop shipping is from a 30,000 foot view, is a way to fulfill orders. It doesn't even have to be online, but it's simply a way of getting a product to a customer. Now as retailers, which is what I consider myself, the goal of a retailer is to build the store and to get the customer. So we do that. But once that part's done, we then have that order fulfilled by in our case, a manufacturer or a brand because we go direct to the companies that actually produce these items.

Right. So, and then the difference for, you know, the other way to do it is to, yeah, to import the stuff, to warehouse it, to take care of shipping yourself and handle all of the fulfillment, which, and I know in the early days, I mean that's a, that could be a big commitment. Let's say you find a widget that you want to sell. Well, you can either source it in the US you can source it overseas, you can spend a whole bunch of money to get it over here. And I know that's one of the things that's always just caused me a headache before I even started because I'm a big believer in validating something before you sink a whole lot of money into it. And drop shipping is a terrific way to validate a product idea for very little money. Am I right?

Of course, yeah. Not even the capital outlay but just the risk. So even if you have the cash, you're still taking on that risk. So it's funny, when I kind of started transitioning from the cookies and whatnot to more expensive products, this was before I even knew what dropshipping was. So I basically just built websites and I listed lead times on different product pages for six to eight weeks. Then we would collect the money and then order these products from China. Have full containers come in. And it was because one, I didn't have the capital and two, I didn't know what would sell. So it's just, it's a very, very risky business model. I mean, at any given time, have $50,000 of customers money sent to China, waiting on products to arrive. So that's how I started and I wouldn't do it again now that I'm a little bit older and wiser. But it's definitely risky. Yeah.

Yeah. So for my listeners right now, we just gave you a really brief overview of it. Right. And we'll continue to. I'm not going to try to talk way over your head if you're new to this, but at the same time I've got some very specific questions that I want to ask. And I will encourage you early on that if this already sounds like something you want to do, but you need more of a primer on it, Anton's got some amazing information@dropshiplifestyle.com that said, I'm going to start to ask questions that will impact me, my clients, my business partners. It may go over your head a little bit, but I want you to pay close attention even if it does, because these are the kind of questions that I'm going to ask, which are the ones that you don't typically see, like when you're reading blog posts about this and watching free YouTube videos and all of that other stuff. So I invite you to eavesdrop on the conversations. Okay. So, and I will, as I told you offline, Anton, I've got a very specific one and I'll even explain to the audience exactly what it is and they can hear you giving me some advice on what you would do, but let me just give you some rapid fire questions. So with, with drop shipping, what is, is your business model? And I'm not talking about with as you're teaching it, but you're going to launch a new drop shipping store. Are you typically using drop shipping as a way to start it off and validate it or you use, is that your actual business model or do you do it kind of to start it off and then say okay, this is working really well. Now I'm going to go import, fulfill warehouse and all this stuff myself.

So I go into it assuming that 80% of the business revenue will come from simply having relationships with manufacturers and brands in that industry. So drop shipping. That's assuming that now if I find that something really takes off and a store's doing really well and I can identify over say 6, 9, 12 months a few bestselling products out of usually thousands of SKUs, then there's a good chance that I will form my own brand and private label a few of those top selling products. Again, I know you don't want to get too outside of this and too advanced. No, we can go wherever I want.

This is just you and I having a beer together now.

Yes. So I say about 80% because we also do lots of other things since we do build niche specific stores. So if I'm selling whatever like stand up desks, I'll have a stand up desk store. And then what I'll do instead of just selling stand up desks to my audience, to the people that find us, to the people that buy from us, to the people that opt into our email list, I'll also promote other affiliate offers to them for things that they might be interested in. So that makes up a smaller portion but definitely extra revenue for our business as well. So there's kind of three ways to monetize but majority is those relationships we have with the manufacturers that make the products we want to sell.

That's great. Do you usually go into, do you usually start with a niche specific, where there's a whole lot of products that you can add in there or do you oftentimes start with a product by itself and say I think this is.

Something I can really sell with a niche. So for example, again if I wanted to sell stand up desks, I'd have a stand up desk store. If I wanted to sell surfboards, I'd have a surfboard surfboard store. And then you know, all smaller things that are related to it, we will have as like product add ons and upsells and whatnot. But we stick with that product type and then once we know that product type again let's just say it's surfboards. I'd want to find every surfboard manufacturer there is and try to form relationships with all of them individually so I could sell their products.

Nice now and some of the examples you've given here and then early on are a little bit higher. Ticket products. Do you try to stick to higher ticket drop ship stuff or do you go, I mean, for the stuff like $50 and under?

Yeah, I'd say at the minimum, $200. Usually we try to be higher. Our average order price is usually over a thousand on most of our websites. And the reason we do that is because, you know, with drop shipping, your margins aren't going to be as big as if you had a warehouse and had all your own product lines and whatnot. It doesn't mean you can't make money. It definitely can work. But if you're trying to sell, you know, $20 items and you're on the drop ship model and you're trying to buy traffic, which is how we get almost all of our sales, we're paying for traffic. You know, it's next to impossible if you're going to make $5 on an order to have a business. So we want to make at least, again we say like minimum we want to work for is 20% margins. We're usually higher on our own stores, but that's kind of a rule of thumb we give to our students. So that means if they're selling a $200 item, they're going to make at least 40. If you're selling 1,000, you want to make at least $200 net profit. That's after cost of goods sold after, after your ad costs. And again, on a $20 purchase, you're going to make two bucks. So what's the point?

What's a higher end of the margin that you're able to kind of get? I know it depends on a lot of things, but 20% being low end.

Let'S just say, and we'll use that surfboard example again, if I had a surfboard company and you wanted to sell my surfboards, chances are your margin would be, if I had, let's say like your wholesale cost to me was $500, chances are the minimum advertised price for that product. So that would be what you sell it at, would be double that. So it would be 1000. So you basically start with 100% markup on products. And then really what your margin comes down to is how cheap can you acquire a customer for? What are your overhead expenses? So it's not like your margin from your suppliers isn't going to be 20%. Like if that was all they gave you to work with, then it wouldn't work. It's usually much higher. And then what you can get your margin to be is really your cost to acquire customers. So as A general rule of thumb for our businesses, for our own stores, we try to keep our return on ad spend to be about 10 to 1. So if I'm going to sell $1,000 item, I'll spend $100 to get $1,000 sale. So then that comes out of that profit margin. Again, things like if you have staff, things like your softwares that you use to power your businesses. So typically for us, we like to be about 30% net profit. And again, that's everything paid. So 30% net is always our target in our own businesses. Again, for our students that are trying to figure it out that don't do everything for lead value optimization like have upsells and have affiliate offers in their business, 20% is a good starting point.

Okay, fantastic. What about the. I've got so many things that you've been saying. This has been great. You give me so many notes and I'm looking for which one makes the most sense here when it comes to competing now with. Well, first of all, do your suppliers typically give you a minimum price that you have to sell it for so.

That you're not a minimum price that you can't go below? So they do give you that. So a big reason that the way that we do drop shipping and other people do as well, but the big reason it works is because it's not like a race to the bottom in terms of pricing, because those prices are locked in. So let's just say we'll use that surfboard example again and let's say you wanted to sell Anton surfboards. And I said, okay, great. Here's our new retailer application form. In that application and in that paperwork, you would have our price lists for Anton surfboards. And there would actually be three columns of prices. So the first one would be wholesale, which is what you would pay to me for the surfboards. The next one would be msrp. So manufacturer suggested retail price. That's the highest price that no one ever sells for. But that's the one that you'll usually see on the website with like, you know, being crossed out with a strikethrough on it. And then the third column will be map, which stands for a minimum advertised price. That's the one that 99% of people selling these products will sell for. And that's the one that's usually 100% marked up on wholesale. So yeah, and what's again, what's good about that is if you wanted to sell my surfboards and five other people did too, it's not a matter of how low do you guys want to go to get the sale? It's. Everyone's going to sell for this price. So if you want to stand out, it's got to be for more things than just the price. And it's not going to just destroy profit margins within a few weeks, which is what happens with suppliers that don't enforce pricing policies.

Right. Okay. So I couldn't necessarily just get your product and then put it on my shopify store and say, I'm just going to sell it for the wholesale price as almost like a loss leader because it's gonna screw everybody else up.

It screws everybody. So. Yeah, and like, a good way for people to, I guess, get this concept if it's new to them is just picture, you know, Apple products. Right? Like an iPhone. If you want an iPhone X, it's gonna be the same price at the apple store and at best buy and at Target and at. @&t. If you're not getting a contract, it's the same price everywhere because of these map policies. Because if target just said, you know what, we're gonna sell the iPhone X for 400 bucks because we want all the customers, that would make the iPhone x now a $400 phone, it would diminish the brand value. It would make everyone else stop wanting to sell it. So that's why these policies are in effect and they really do protect both the brands and everyone selling for the brands. The retailers like us.

Perfect. So I'm going to circle. I'm circling this because I want to circle back to it on a strategy here shortly. But this is really important and I want everybody to kind of pay attention because I want to see if what. What I was thinking is even possible. Is there a way, like, so if I just go, I set up a shopify store and I want to sell widgets on, you know, whatever, kitchen supplies, you know, whatever. And I find a manufacturer, I find a supplier. Is there a way to get an even lower than traditional wholesale price? And I ask this because I've talked to a few people who've said that that this oftentimes depends on what you're selling and who your source is, but that if you have like a physical location versus you're just somebody who's going to do drop shipping, et cetera, that oftentimes you can get lower than kind of advertise wholesale prices. Are there any tricks to the trade of getting the best prices?

Yeah, definitely. And that's a big part of our kind of like quarterly reviews that we do in our businesses as well. One thing you mentioned in there, like physical store versus online only. That is true. I gotta say, it's rare. I've definitely seen it before with some industries and it seems to kind of be like niche specific where some industries, like for example, baby stuff like cribs and strollers, they'll give people that have retail stores much better pricing on the wholesale side. So I have seen that. But again, it seems to be like an outlier thing. It's not everywhere. But as far as like the pricing that you'll get from the suppliers, it'll either be straightforward. Again, like here's your wholesale price list. Sometimes they'll also give you another sheet in your new retailer packet that'll show, okay, if you sell X amount of units of this thing, we'll give you 10% off your wholesale price. If you go up to X amount of units, we'll give you 20% off, so on, so on. Most of the time that won't be there. But that is something you'll occasionally see. But even with all that being said, it's definitely possible because remember, your relationships are directly with the manufacturers, with the brands to negotiate with them. And we do it all the time. So especially around any big holiday, for example, we just had Memorial Day. It's just people always do promotions obviously for Memorial Day. So what we do is reach out to our top suppliers and say, hey, we want to do or we are doing promotions for our store. Can you give us any better pricing so we can bump your products up higher on our pages, include links to them on our website. And more often than not, if you have a relationship, they will give you, you know, a deal. So let's just say, okay, for all the orders you place in June, we're gonna give you 10% off your wholesale price. And around the holidays, same thing. Because again, if you, if you position it in a way that, hey, I'm gonna put you to like the top of our website and I'm gonna push your products the most to our customers, then it's definitely possible to get to get discounts because it is that direct relationship, right?

And if you are going to them and let's say you're not drop shipping but you're looking to just buy Matt like a thousand units or something in warehouse. And oftentimes, I mean that is one way to get cheaper as well, right?

That's one. Yep, that's one way. So we've used that too. We don't like to do that that often, but let's just say sell for. Yeah, let's say. And let's say you sell for 20 different suppliers on one store and you know, there's like one product that just drives half your revenue. It's like your best selling products. And what we'll do when it gets closer to the holidays, like especially Black Friday and around Christmas, you know, there's a good chance that your supplier will sell out of those products. So that's when you can kind of use that move. Like, hey, listen, you know, I want to make sure that we have this inventory and maybe I want, you know, 200 of these things. Can I buy them now? I'll pay you for them. Can I get a discount? And then you still keep them in your warehouse, but I own that inventory. So you're basically prepaying them for the product they already have. They're storing it for you because they're still going to drop ship it. But now you know your money's to them, you got a discount and your inventory is secured. So that's one way you could kind of play with that as well. Yep.

Do you typically go straight to the manufacturer in the main company or through distributors?

No. Yeah, every time, go direct. There have been instances where we have worked through distributors, but it's not, it's not a good process. First of all, like there usually are extra fees involved. The margins are usually smaller. There's usually not pricing controls. Again, some industries like we've seen with medical equipment, a lot of that, like you kind of have to go through distributors. But for most industries you can always get a connection directly at the brand itself, which is always the way to go.

Right. Do you oftentimes source from overseas and drop ship from, whether it's China or somewhere else or do you always try to drop ship from us?

For me, us, because this is where my businesses are based for drop ship lifestyle. You know, we have students in Australia, so they work with brands that are in Australia. We have students in Germany, they have suppliers in Germany.

So we keep it domestic. Domestic sourcing then.

Yes.

Okay. And once more we're talking about typically like you recommend the higher ticket stuff. This is not like the little tchotchkes you just source for a couple bucks, you know.

No, and I have honestly, you know, like I said, I did start with, you know, cookies and whatnot. So that was a less expensive item. But even over the years I have tried some of the less expensive products in the, you know, 40 to $50 price range. And what's happened every time I've played around with it and see what I could kind of get out of the business. It's the same thing every time. Like it looks exciting because a bunch of orders come in, you know, and the revenue is good. But then at the end of the day you're dealing with just too many customers. You know, it's a different business. It becomes a customer service and customer management business when you're trying to process thousands of orders a day and I'd much rather have, you know, maybe, maybe a few dozen customers a day to make the same amount of money as 1000 or 2000 units of a $50 product.

I'm with you. I love the bigger ticket things. I'd much rather have bigger sales. But that being said, when you're dealing, you know, this, I guess this is where is the competitive advantage. So we'll use stand up desks because you use that as an example and I'm actually standing at a stand up desk right now. So I'm a customer of those with bigger ticket stuff. I'm imagining that the consumers are doing a little bit more research and they're not as it's not an impulse buy so they're a little slower to buy it the value add because it doesn't sound like somebody with a drop ship business can necessarily compete on the lowest price. I mean you can probably match the lowest price but these days with Amazon and everything else there's a lot of way it's hard to be the lowest price. So what is it that you do when you're sending people? Let's say it's to a stand up desk store or any kind of a store in order to encourage them to buy from you. An untrusted source. If it's the first time. Because you know, I buy from Amazon because I know Amazon like I trust them and I think that's the number one thing they've got going for them is the trust factor. So if you're not competing on price and it's hard to compete on trust, how do you make people choose you over, you know, the competition?

Yeah. So couple things. As far as like pricing goes, you, you will technically be, you know, the lowest price but that's because everyone will be the lowest price because everyone sells for minim advertised price. So you're not competing on price because again everyone is.

You don't have competitive edge on price. You may be alone.

No you don't. Yeah, it's exactly, it's all, it's all the same there. Then some other things you mentioned which Are totally true though. When people find us, and really the only time we want them to find us is when they are at the very bottom of the buying funnel. So we don't want people even coming to our websites. I mean, if it's free, why not? But if they're coming to us and we're paying for it, we want them to know which stand up desk manufacturer they want to buy from, what size they want it in, what SKU number it is, what color it is, and they're just trying to decide like literally with their credit card on their desk should I buy from, where should I choose. So that's the type of people we want on our stores to begin with. Then once they're there, it's our job to get them to become a customer. So there's a whole bunch of things we do, some of the bigger ones that I guess could apply to everyone. We like to use obviously urgency and scarcity because those are the two biggest drivers of conversion. So we do expiring coupon codes on our websites that expire every Wednesday night and every Sunday night at midnight. So whether, you know, whenever anyone finds us, within a few days they're going to see a coupon code everywhere on the website that they can use for the next few days. And again, these are people that are ready to buy anyway. So it makes them first think like, oh wow, am I really going to buy this in the next three days maximum? Because that coupon code is about to expire. So that's the first thing trying to get them to choose us from there.

What kind of discounts are you typically like 10% off or what's been.

Yeah, that'll be the maximum. It depends on the store. Usually it is about 10% off. Sometimes it'll just be free shipping. But that's not the typical thing. Sometimes 5% off. It really depends on that store's profitability and that depends on how well our ads convert and what our relationship's like with the suppliers on that store.

Right, so then number two, you said expiring coupons with urgency and scarcity and.

What was number two? Yep. So the next thing is to actually like. So one advantage we have on anything we build over someone like Amazon is because we do build these niche specific stores, we can give that person an experience that really like speaks to them. So if it was a stand up desk store, that page, the product page would be a sales, it would look like a sales page for, you know, a stand up desk. It wouldn't just have the stock Manufacturer photos and the little three sentences that they wrote up. We would explain to the person like, why this was the perfect stand up desk for them. We would get unique product shots on there. We would most likely have a video that walks them through how to use it. We would have reviews specifically for that standup desk and really turned it into like a whole experience. Because what you'll find with a lot of the companies that do the business model I'm speaking of, what they do is get approved to sell stand up desk abc and again, copy the two basic photos, copy the one basic description of it, and then don't even make any features and really don't make an effort. So we, I guess do our Internet marketing skills and make it into an actual like little sales page that really stands out. And when you mix that type of thing with, you know, the expiring coupon codes, we also have, which I mean most people do now, but we really do have great support in all of our stores. So we have live chat that doesn't just say, you know, hey, you have a question for us. But, but hey, in that case, say something like, we're the stand up desk specialists. Speak to a stand up desk expert, something like that, to again, make it connect with that person.

So it's a customer experience.

It's really about that. So the reason some retail stores are still around when everything can be bought online is because people want to go to them and have that kind of interaction. So it really is all about experience. We just try to bring that online.

Okay, perfect. Now what about, dude, this is great. I love doing this rapid fire stuff. This is really fantastic. So yeah, it's a qualitative versus a quantitative thing. People are going to buy from you because they have the best experience coming to your site. Like, wow, these guys really answered my questions, et cetera. And you mentioned bottom of the funnel, which for if anybody doesn't really know what that means, I mean if you're at the top of the funnel, this is, you know, people aren't really aware that, that they're not necessarily shopping for your stuff, but maybe they stumble across a cool Facebook ad or something like that. Like, oh, what's this? It's interesting. And they start down the path, right? And bottom of the funnel, as you mentioned, is, hey, I already know I want this. I just haven't decided which one at.

What price or from what. And I'll add one thing to that too, because a lot of times they are looking for the best deal because again, by the time they Find us. They know they want it. If they could find a site that looks trustworthy, know having again reviews, have it, look professional, have actual support that works, they'll probably choose that. But then something else you can do to kind of not get around but to make map on your site seem better than someone else's. Let's just say I was selling a $700 standup desk. I could not by breaking map technically include something with that purchase that made it like a no brainer. So okay, if you buy this standup desk from us within the next three days, I'm going to include a computer mount or I'm going to include, you know, a cable holder for behind it so you don't have cables over your desk. So you can include bonuses like that. And it might cost you as the business owner 10 or $20, but that $10 or $20 as a bonus gift for the purchase could easily convert a lot more $700 sales. So we do a lot of things like that too on our, on our, on our best selling products.

I love it. So the, if you're going really for a lot of the bottom of the funnel as well is a lot of your traffic coming from Google, then both like Google AdWords as well as Google Shopping versus something like Facebook which is a little bit more, which is a lot more top of the funnel. Obviously Facebook is amazing for retargeting, but the majority of your front end traffic are you getting that from which channels primarily?

Yeah, our highest converting source of traffic, I mean it has been for the past like decade now and it still is. But Google Shopping is just by far the best behind that organic. But again we're not doing a lot for SEO besides on site stuff. So all those long tail product names, brand names, SKU numbers we're ranking for things like that. Which converts great search text ads on Google. We do, but only for our bestselling products just to have more placement, you know, on the front page of Google.

So Google Shopping really is the.

Yeah, because if you think about it and for anyone that doesn't know what Google Shopping is like, if you go on Google and just type in any product, you're gonna see, you're gonna see product pictures, you're gonna see store names, you're gonna see prices. So the people that click those, they're buyers, you know, it's not, they know where they're going. So it's just a very effective ad type for E commerce stores.

I love it. Okay, so, so we've covered a little bit about Sourcing. We've covered just a little bit about traffic here. We've covered a little bit on the conversion and like how you make your stuff stand out, etc. And we've talked a little bit about profit. Earlier you mentioned a 30% net profit.

Yes.

So that's typically what you're. You're trying to get and shooting for. And is that the company? Like, that's after ad cost, that's after everything, right?

That's every single expense. Yeah.

Because I do know that one of the things that some of my E. Com friends have stumbled into, especially not so much with Drop Ship, but when they're sourcing their own products, is that they've got really high gross revenues, but then their profit margins are just absolutely dismal, like 5% or sometimes less. And a lot of that has to do with sinking money back into inventory cost, which in drop shipping, you don't really have inventory costs because it's. No, you know, that's the whole nature of it. Now. You may, I mean, you may get, you know, you may have a lower overall margin, gross margin, but you're, you know, you don't have, you don't have that issue. And I've seen people grow to death because they, their demand outstripped their ability to finance inventory 100%.

And that's, that's a huge thing. And I'll say also, you know, when I say like our margins are 30%, that's very calculated. It's because we know that's where we want them to be. So we're making sure we're constantly monitoring our biggest expense besides cost of goods sold, which is our ad cost. So easily tomorrow, you know, my margins could be negative 20% if I just didn't watch my AdWords account and went in there and upped all my budgets 500%. You know, so, like, what you make out of this, because again, the margins that you have, like just your gross margins between your product price and your wholesale costs, those are high no matter what, but then it comes out to how many expenses you add to the business. And again, cost of acquiring a customer really is the biggest. And that's why you got to be so careful with that, like, especially when people want to scale. You know, I know when I started, I was not good with tracking what was converting for us. And luckily back then it was a lot cheaper to advertise, so I had a lot more leniency. But once I finally figured out the whole E Commerce for analytics tracking system, I realized, like, wow, I'M spending a ton of money on ads that aren't making any sort of. So the business was still profitable because back then again it was much cheaper. But now if you're not on top of that, it's very easy to take a store that maybe I can get a 30% margin on and to be losing money on because it really comes down to your cost to acquire new customers.

Yeah, it really does. I want to circle back now. I mentioned this to everybody regarding the low cost prices. I've seen a version of this done and I've really liked it and it kind of makes. Made me think about some of the opportunities here in regards to like a buyers club and I would love. You may have a lot more information on this than myself but. So one of the sites I came across was in a specific niche that does have a lot of repeat purchases because there is a. I'll call it a consumable product. Right. But it's not something you ingest. It's just something that you need to replenish. And they had a. It was like a. An E Comm store behind a membership site. So think of it as a private site that you come in and the whole point of it was get this product basically at wholesale cost. And they probably marked it up a little bit. But in general, if you looked at the product inside their membership area and I think you paid $10 a month to be in it, you look at the product inside the membership area and then you go search that exact same product elsewhere on the web. It is definitely a lot cheaper, sometimes like 25% cheaper. I've seen it as much as 50% cheaper. So it did look like they were selling it at break even. Now it's not being publicly, that individual product is not being publicly advertised, but it's being privately advertised to members only. And it was interesting because I was talking to the owner and he's like, yeah, what's been genius about it is that we don't care about making the money on the actual sale of the product. And by the way, these are not high ticket stocks. This is lower ticket stuff. But we don't care as much about making money on the sale of the product. We want the continuity because the continuity is a lot of fun and it improves their valuation. And I thought that was really pretty genius as far as creating a members only shopify site with your basic entire premise is you're going to get this stuff at wholesale cost because. Because I want you on continuity. A. Are you familiar with that exact model B Do you have any other insights on Buyers Clubs or this whole concept that I just kind of brought up?

Yeah, I am familiar with the business model. I know people that have in the past or currently have businesses like that. I personally never done it. I would say I really do like it though. The things that you're talking about, what's great about them is since they're usually based around different industries, that type of thing. When you're making money on the continuity, even though it is that lower ticket products, again the margins come from the technically info side or the membership side. So you can acquire a customer and let's just say you made your $10 right away, that's $10 profit. And next month it's $20 profit and month three it's $30 profit. So I really do like that business model. Especially now with the ability to do Things like build YouTube channels and have Facebook groups with. With like minded people that all know of this Buyers Club. I think it's a great business model. Again, I haven't done it personally, but I like that one a lot.

Good. Yeah. Because it's one of the things. And I do know for a fact because I've bought some websites, I do acquisitions, I've sold some website businesses and I do know that if you have continuity in your business, I mean continuity is really the holy grail. That's what really everybody wants. But if you can create continuity, your valuation when you go to sell your company is dramatically higher than if you're always having to do one off sales. And I just love the fact that you don't necessarily have to focus on, you know, on the other stuff. You're literally just saying this is the cheapest way to get it. But you know, you gotta, you gotta join the club to kind of see behind the curtain. So I'm glad that. Have you, have you done any other types of Buyers Clubs? Not exactly like that. In the past where it's. I mean I know there's the whole subscribe and you save a little bit of money option.

Yeah, not specifically, I guess the clo. I mean it's not really the same but the closest we've done is when we've sold to different type of trades and whatnot. We formed relationships with different trade organizations where we give discounts to everyone that's part of XYZ Club or association, but not that they paid for it. It was just more of a relationship. So yeah, I haven't. But again, I know people right now that are doing this and, and doing pretty Big numbers. And like you said, one of the benefits right now, let's just say like a drop shipping store. The way I build them without continuity. Right now the average sale price they're going for is about 30x monthly net. So that's like the normal valuation. But when you add continuity behind that, it definitely goes way up from there. So huge, huge plus side, if you build to sell, which is something we do as well.

So you said they're going for 30 times.

30 times, 30 times monthly net profit. So net. So if it made, you know, 5,000amonth, 150,000.

Okay. Oh, I got you. Yeah. Now, okay. Yeah, I was thinking 30 times annual. No, yeah, but okay, so the. Oh, this is just a random question because I have it written down. Shipping costs. Do you offer free shipping or do you typically. Okay, free shipping.

Yeah. And that's with us all the time. And sometimes we do, you know, word it like, oh, if that site is getting the expiring coupon code being free shipping, then that will be the coupon code. But that's rare. And the reason we offer free shipping everywhere is just because that's what everyone does. So. Because, you know, if there's five other stores selling the same thing and then we say, hey, give us 100 bucks to ship it, they're not going to choose us, Right?

No, exactly. Well, and now people are being conditioned with Amazon especially to 100% not pay for shipping. By the way, this is just a little. I don't know if you've ever tested this, but one of my close friends and a former guest on the show is a guy named Ron Lynch. And Ron is. So he lives in Austin, actually. I don't know if you have you come across Ron.

I think I have used it with someone else.

Yeah, infomercial. He's a, he's one of the top infomercial guys out there. He sold like three or four billion dollars on direct response tv. And I had an amazing interview with him like three years ago where I went deep, just like this into a lot of the things. And I know one of the things he said that they tested with big money was that when you say free shipping versus we'll pay your shipping, we pay your shipping ends up converting a lot higher.

Yes.

Yeah, right.

So, yeah, yeah, definitely. And I'll just add to that, like I said, I 100% agree. Especially if you're in an industry where your competitors are paying for shipping and then you come out and say it that way rather than just saying free shipping. So some of the things we sell are big, heavy items. Some of them are going to offices, some of them are going to restaurants. And there's different shipping options. Right? So you have free shipping, then you have upgraded, like a white glove delivery service. So what we'll say on some of our websites are, we'll pay for your white glove delivery. And they know that our competitors are gonna say, give us $200 extra for that. Where we say, we'll pay for that. And it converts like crazy. So, yeah, great tip.

I love that. What about support? Because your support team is limited on what kind of support they can give, I imagine. But how does that typically work? Let's say I'm selling desks and I'm selling it through Bob's desk supply. How does that work? Because they're sending the support ticket to my company, and then I have got to go figure out what the hell's going on. Is that a big issue or is there an easy way around that?

When you first start out in a new industry, it's kind of a big issue. Like any business, you kind of have to learn it and see what people are asking about. But then like any other business, I guess the longer you're in it, you realize people ask the same things over and over again. So we focus on having great internal resources that our team can use for support, but then also having our website, like one of the things too, like we talked about earlier, but how to get people to choose us. We know what questions people are going to have before they ask them. So we could update our product pages to give them all the answers that our competitors might not. Because again, they're just doing basic copy and paste product uploads. So, yeah, it's a process to get it right. But after a few months with any kind of traffic to your stores, you'll figure out 95% of those questions and have answers ready to go.

Okay, because the manufacturer usually send you the ship, when they ship it out, do they send you tracking information, etc. To pass on?

Yes.

Okay, that's good. So, yeah, there's a way to do that. So now is the part where, like in the beginning I said I've got some very selfishly personal advice and I mentioned this offline to you. And last year I bought a business in the home beer brewing market. And it gets a lot of traffic, about 60,000 visitors a month organically. And it mainly is an authority site. It's a blog. It sells courses and affiliate offers. The one thing it did not have until I Bought it was, it was an E commerce platform. Everything's just WordPress. So I built an. I put Shopify on the site and I originally and I started off we've had just a handful of sales and testing some stuff out, some print on demand T shirt related stuff. However, in this market, which you told me you've done some good research on home beer brewing, it's probably a really great market, especially for high ticket because most home brewers are buying gear stuff. They're buying consumable everything from like certain things like yeast and ingredients that go in the beer. But they're also buying all types of kits and gear and conical fermenters and wart chillers and all these things that I barely even know the name the name of. But I see it as being a pretty right market especially because our site has a lot of trust built in. Trust, Organic Reach, etc. And they're coming in to our site to learn the. What do you call it, like the how to and, and for instructional stuff. So I think it's, it's an absolutely perfect way to add a drop shipped e comm aspect onto this store as well. Right. So in a lot. And there's a lot of, there's a lot of stores around the country. I have not started to look at the best suppliers because most of the suppliers that I see are the sites that we just send to as an affiliate. And I'm guessing that those probably are not necessarily the best suppliers because they're probably getting their stuff from somebody else as well. Right. Making it themselves. So is there anything that in your research that you looked into that you would make any recommendations for? The other thing is I'd love to start like I don't want to have a dropshipping store that has everything under the sun like death by a million skus. But there's easily some stuff that we can do to find the bigger ticket and the most commonly purchased products. But what would be your advice on the best way to kind of get that off the ground and running? Granted, we've already got the Shopify store set up. It's really just finding the right sources and doing it in a way that, that people buy from us versus the competition.

Yeah, exactly. So what I saw when I was looking into that is that a lot of the other E commerce stores out there, they sell these kits so they have like a beginner level kit, maybe like a mid tier kit and then a premium kit for the person that wants to build out their whole garage into like a brewery. So I thought a good way to do it was kind of do the same thing and have maybe three different options, like three different tiers, like are you just starting out, are you experienced and want something like that can make X amounts? Or do you want this master lab and then basically have three different products on the website that are a combination of everything needed to put that kit together. The way that I was thinking of doing it, which I would definitely recommend, since you have that audience already, is if you could find those product groupings at good price points for again, three different price points like that, I would go ahead and just try to find someone from the community that is part of the website already that kind of has experience, that seems like a good writer, that seems like they actively either post or comment. And I would try to ship them one either at cost or maybe for free and see if they could do different videos assembling it, a video showing how to use it, a video brewing different beer with it. And then I would use all that content in the community so, you know, share it and hopefully that person shares it too, because they obviously want to be part of it. And then build out three different products around that. From there, I would have everything that's included with those kits as replacement parts if they needed. But that would kind of be like a hidden section of the store. And then from there, where I saw the big opportunity in that industry was the actual material people need or the material, the supplies they need to make the beer. Yeah, exactly. So when I was thinking of it, I wasn't thinking of it as much as a buyer's club for that one, but I was thinking a subscription box where they get different seasonal beers depending on what time of year it is. And what's cool about that too is there are already some huge YouTube beer channels, but just having those people, those brand ambassadors that have the kits in their house when they get it, ask them to make a video, actually making the beer, tasting it and whatnot. And then you have all this content that we just keep sharing to the YouTube channel, to the Facebook group. And I feel like it's a perfect thing that people are so passionate about it and they really enjoy that hobby that getting a few people to start with that. I think the subscription box could grow really, really big with that and be that recurring revenue.

Yeah, I do too. There's an interesting one in the print on demand subscription box for this market. I've seen two or three sites do this, which is on T shirts. So they'll go around to different Breweries and I think they'll grab their designs and they'll partner with them. Them. But so this month it may be one or one to three different breweries and they'll say give us your logo or whatever and they'll have a designer mock up a really cool shirt. And then you buy the. You're a part of the subscription box, but you get a T shirt for that. For the brewery of the month, for all I know they're paying. You know, the brewery may be paying to be included with this because it's like advertising, but I think it's like $16 a month. And every month I'm getting a new brewery logo. And granted there's probably a lot of ride alongs with that, but every month all they have to do is like, all right, these are the number of people who are on the subscription. Let's send that out. I thought that was a pretty interesting way to throw continuity on there as well.

I actually heard them. They bought an ad on Howard Stern. I heard them on. I heard an advertisement on that Howard Stern show.

Yeah, nice. Yeah, they're doing that was actually not the one.

Same company, same product. Yeah. Yep. And yes, they must be making money. Some. Sure, that's not cheap, but like that, that kind of model you just mentioned where like the, the, the bars, you know, or the breweries might be paying to actually have their, their logo on it. I mean, they probably are because the way I was, I was basically when I was thinking of this along with some other similar ideas was when I was thinking of the beauty box companies. Because the way that works obviously is they ship a beauty box every month to all the women that subscribe and they have little samples of products in them. And the products not only are free to the company, they usually pay to have theirs included so the customers will buy more of it. So it's just, it's a beautiful business model where you can not only get free products, but usually get paid to send your customers products.

Absolutely, absolutely. The. As far as where it goes to sourcing stuff, let's just say in the homebrew market. Do you have any recommended shortcuts to find good homebrew suppliers besides? Because once more, a lot of the times I'm going to find the companies that are just selling this as big e comm sites as well. Are there directories that you typically start off at? Are there Google searches like Homebrew supply plus wholesale or something like that?

Yeah, so definitely, I would say no directories when you're using Google don't use the term drop shipping because that's when you're going to find middlemen. And the companies that charge for access to products, any good supplier will never charge for access to products because the relationship is we're gonna sell your products and we're all gonna make money. So yeah, what we do. If I was gonna search for that right now, I would just go on Google and I would type in whatever the specific products were. So you know, home brew kits. Then I would look at websites that were selling homebrew kits and then I would look to see what brand names made them. If they had a SKU number listed, I would look for that. Then I would Google those brand names. Then I would google the SKU numbers and I would just try to find directly the companies. So I'm at a stand up desk right now too that's made by Varidesk. So I wouldn't want to look@antonstandupdesks.com I would go to that website, see Varidesk was sold there. Then I would go to Varidesk's website and if I wanted private labeled stand up desks, I would contact Varidesk and say, I'm looking to sell your products. I'm calling from Anton standarddesks.com and in the scenario that I guess we're talking about now, if you wanted to go the private label drop ship route, I would ask them if they did that. If I just wanted to sell it under Varidesk, I would ask if they work with Internet retailers and then see who I should speak to about getting approved to sell the products.

Yeah, yeah, I love it.

Yeah. Just literally like, it's just, it's funny because there's all these like. And I understand why if people want to drop ship, they Google dropshipping and it's like the worst term you can use if you want to build a real business with this model. Like the only reason my business is called drop ship lifestyle so people could find us. But we never use that term with any of our customers, any them of of our suppliers.

More like the marketers who are using it.

Right, yeah, exactly, exactly. Yep.

Yeah, yeah. That was one of the things. Specifically with this market. Like a home brew kit is usually a combination of like a bucket and a tube and a something or other and some other gadget and, and also a doohickey and those. I always wonder if it's the store who's bundling stuff together like, oh, I got a bucket from this person, I got this from that person, I got this from that person and let's bundle them all up together. But I think that's just some research that we need to do on that. And then I'm guessing like the strategy here is also going to some of the competitors websites and a lot of times you can sort by best selling items and then say okay, show me anything above, you know, like what did you say? Like $200 is what you kind of like the price yours at. So anything over $200 or maybe even $100 and up where you know where it's a good selling item and it's like okay, let's add that stuff to our store. Let's add the essential stuff for getting started for like you know, like you said, beginner, intermediate and advanced and then start to find the supply for the like the ingredients. Oh, these people need barley, they need hop.

Yeah. And especially at those different price points, you know the fact that you have a lot of organic traffic built into that site already so your cost of acquisition is going to be lower and the fact that it sounds like there is going to be recurring built in on it, that's something. If the customer's there for free and you sold something at $100 and then with that $100 order they had the option to add on $20 a month or whatever it is subscription, that's still great because you're not paying 10% of that to acquire the customer. So there's definitely ways to get creative with pricing too. I use that as a general rule of thumb because more often than not our traffic is mainly bought right now.

When you're sending to landing page, are you sending straight to a Shopify product page or are you creating standalone funnel style pages? Whether it's in clickfunnels or one of the other landing page builders like funnel builder from Matt Stefanik or something like that? Are you?

Yeah, no, they're, they're all Shopify product pages. Again like we do build them out a little bit so they don't just look like a basic copy and paste product page but we keep everything for our e commerce in Shopify.

Okay, what's the most expensive products that you've either sold or have students have sold in drop ship model? Like 5,000. Thousand?

Yeah, I think the biggest one I got it was a long time ago, the biggest one, but it was over 8,000. I think it was like 8,300 or 8,600 or something like that. Yeah. And then the biggest order I ever got, which a student beat me, but the biggest order I ever got was for 62,000 for a company that ordered 62 pieces of $1,000 item. So that was, that was a good one. But then I had a student. Well I still haven't, he's still a student but a couple years ago he got an order for over $100,000 from a university that just bought a ton of one of his products. And yeah, so that they don't happen often but when they do it's a good, it's a good day.

So do you ever try to engineer that to say because what you just mentioned were some almost like business purchases versus an individual. Do you ever look for those industries where there's a bunch of business purchases going on?

Not specifically, but we do call attention to it on our websites where if we're selling something like if I was selling commercial wine refrigerators I would assume that most likely it's going to be restaurants. So I would definitely have a tab visible on every page that said something like to the trade where if they went to that they would see examples of other businesses we've sold to and they would know that if they're buying in bulk they would receive a volume discount and it would have like a phone number and an email like vipantons restaurantstore.com or something. And those orders obviously don't just come in through on the website. It's usually a conversation back and forth. Usually they want to make a deposit and then pay the balance when it gets there. So yeah, we build pages that target those people but we don't run traffic to those pages. They just, they click there once they find our website and then are seeing if they want to buy from us or not.

Okay, now are you adding any one click upsell funnel style things into your Shopify using some of the apps that are out there right now or not?

Not really, no. Yeah, we do like on our product pages people can add things on but nothing. There's no like elaborate funnels behind our products. A lot of what we do with our remarketing and trying to, you know, have people take different things is done via post purchase emails. So after people buy from us we are making offers in their, in their actual like product delivery sequence. But yeah, not, not like straight after for the most part.

What about when you're looking in deciding which products to do, are you, are you trying to look for things that have repeated buyers more so than just one off sales?

It's not the most important. If we can get that, that's great. But typically just to give you an idea like most of our websites, on any given day, 90% plus of the traffic is first time visitors. So a lot of the things are one off purchases or something people will buy maybe every couple years. So it's not. We don't have a lot of recurring and the majority of our stores are a lot of things that people keep coming back for. That's why a big thing that and we didn't. Again, I've been this stuff for a while with E Commerce but the whole what I call lead value optimization thing where we promote info products to our audiences, where we promote other people's less expensive products to our audiences, we didn't start doing that until a few years ago but it's made a big, big boost in our revenue and in profits because now we have other things that we could promote to our buyers. Where it used to be they'd buy our thing and we just didn't have anything to sell them for a while. Now we just promote other people's stuff stuff to them and we can increase that, that lead value.

Oh, fantastic. Okay, so man, this has been, this has been really killer and I'm trying to think here, what am I missing that would make, make my listeners, I mean already my, hopefully my listeners are like holy, I got to listen to this thing 10 times. But they don't because they can go to dropshiplifestyle.com let's give you a plug because this has been fantastic. So tell me about some of the resources that are available over at Drop Ship Lifestyle.

Yeah, that's where we have our courses and whatnot and some different downloads. But there's also a blog there and we've posted at least once a week I think for the past like four years now. So there's enough content to keep you busy for a while. If you want to see if this is for you, get some more information on it. But yeah, that's where everything that we publish gets eventually linked to.

I love it. Okay, so but I mean is it courses? Is it coaching? Is it a little bit of.

Yeah, so that's, that's the main thing like the blog is there just to kind of keep people updated and share some new things we learned and kind of what we're working on. But then we do have a course that was the course that just won the, the best E commerce course from Shopify and it's just called Drop Ship Lifestyle. Yeah, it was, that was, that was exciting. I wasn't, I wasn't expecting it because I didn't know it was a thing because this was the first year they ever did it. So that was a good phone call to get. But yeah, our main course takes people through the seven steps that we use every time we launch a store. So starting with niche selection, then market research to see if your idea is viable, then web design. So how to use Shopify, how to get approved with suppliers. Because again this isn't like you don't pay to get approved. You don't use a directory. You actually have to find them and say the right things to them. Then I help people with optimizing their website for conversions to make sure people actually buy when they get there. Then we have a whole module on traffic. So how to use things like Google product listing ads, how to do basic on site SEO, how to form relationships with niche related blogs and other people that can send you traffic. And then the final step of the course is all about automation. So how to use different apps and tools and even how to hire virtual assistants once you start making a bunch of money and don't want to be in your email all day. So the whole process from A to Z of building a high ticket dropship site.

Nice. Well, I love it. I'm on your website now and I went over to like courses and I see the basic premium and done for you. Everybody likes it done for you.

Yeah. For the people that don't want to learn web design.

Right.

They want to skip that module. We'll do it for them.

Right. Like you'll set up the store. Will you help them find the like you'll find the suppliers for them and plug in all the stuff.

Yeah, we help with all that.

Nice. What do you think about? Well this is actually I already know the answer to this. So site like apps like Oberlo and other things that automatically go out and scrape like the suppliers and stuff. Do you typically stay away from automated stuff like that?

Yeah, yeah. And then what I'll say is like it's definitely. I know there's people making money using that and it's not, I'm not going to say it's a scam or anything like that. But the thing is like if anyone wants to think about it in the most simplest way, like if you want to have a real business that is worth more in a year than it is now, that's still around in a year, that's still around in five years that you could have in 10 years and maybe pass down to your children or flip for a lot of money, it's not going to be a website that you clicked a few buttons, connected to an app and imported 100 products from China. That's not the answer. So what I believe if you're going to spend your time doing this, and by doing this I mean building a business, you might as well do it in something that actually has an opportunity not just to make you real money, but to be lasting and something that actually benefits the customers and you. So again, not a scam, not worth like they're ripping you off or anything, but it's not a long term play at all.

Right, Exactly. I was going to wrap this up, but I actually have a couple other questions that came to mind because as I mentioned earlier, I've done acquisitions and I love doing exits and I like to do acquisitions in order to exit. Have you done much in the terms of buying somebody else's dropship site versus and or selling a site once it's up and running? So which side of that have you.

Got more experience on selling? I have bought, but I typically sell. And the reason is just because there are definitely some great opportunities to buy. Like the one you mentioned, you know, you want to get into that industry that has an audience built in, like that's a great example to buy. But what I see a lot of people making the mistake of doing is hey, I want to start an e commerce store and they'll go on like Flippa or something. And, and again, maybe there are some good sites on Flippa, but if you search for dropshipping stores, most of what you're gonna find are these copy and paste templates that you know. Oh, just all you have to do is set this up and get traffic and you're gonna make money like that. That never works. So for the acquisition side, unless it's gonna be one of those deals like the one you mentioned where you have a built in audience, I typically just try to see what everyone is doing, like spend a ton of time. Like most of our time goes into market research. So seeing who they're working with already, who their brand partners are, where they're getting their traffic from, and then trying to not just recreate it, but see where there's a gap to make it better and then do it ourselves. So more often than not we build it and then we sell it.

Yeah, I love it. Are you seeing, you said you were seeing some really good valuations on selling these sites when they're done well, right?

Yeah, yeah. And that's when they're done well. And just, you know, I'm sure you know this, but so Everyone else knows it too. Like that's, you know, when they've been established for a couple years and revenue is at least flat if not trending upwards. Yeah, exactly, exactly, exactly. If you start a store three months ago and it made $1,000, it's not worth $30,000 today.

That's not going to work well. And in a lot of cases for somebody especially like yourself, who's very skilled at starting one of these stores and getting them up and running, it doesn't actually make that much sense for you to go buy you personally to go buy somebody else's drop shipping store because the cost to recreate it is almost nil for you.

Yeah, exactly.

So they would have to have something dramatically like that they're leaving on the table. Or in the case of what I did is I went and, and I bought a trusted site that gets a ton of organic traffic and has a decent sized email list already. And these like for instance, E commerce is one of the things they weren't doing and there was a lot of low hanging fruit. I actually see that as being a really good strategy for somebody in which they go out and they buy the audience elsewhere that isn't being served in this way. But then if they know, let's say say they've gone through drop ship lifestyle and they know how to do this, go buy the audience and then create the E comm aspect and you may be able to get that money back right away.

Yeah. And to build on that, we have a bunch of students that have bought different Amazon affiliate sites and they buy them and of course they're monetized only with Amazon. And then instead of doing that they swap out the affiliate links with actual products and start making a lot more than your, I think default 4%.

Well so, and that's exactly, that's exactly one of the things behind ours is because it's a, it's a very robust blog, but it's, it's got, I mean the biggest affiliate program we've got is Amazon. And yeah, you're making peanuts. I may sell $100,000 worth of stuff and make 3,000.

Exactly, exactly. Yeah.

So a little bit frustrating. Dude, this has been, this has been phenomenal. Like I, this has been one of my favorite episodes because it's been so rapid fire. You're, you've got answers for every single question. And I know you've given me a lot of shortcuts in the learning curve of some things that I was like, okay, this is some stuff I'm gonna do. I Just I need to plug in a couple holes and find out people who are doing it differently. And I love the fact that you're doing the bigger ticket products because I don't want to just compete with the other people who are just selling crap and impulse buys. And I think this is a terrific model that people can go out on. And speaking of that, for anybody who's like, I've never done E Commerce, I've never gotten this going, what do you think people should budget? Assuming, let's say they've bought your course. So that doesn't have anything to do with it, but somebody's got now all the education, they're raring to go. How much should they really have set aside to get this thing up, tested, validated and get some momentum?

Yeah, I know it sounds like ridiculous, but a few hundred bucks is more than enough. One of the beautiful things about this business is it doesn't cost a lot. That's not to say it doesn't take time, that's not to say it's not real work. But your actual expenses, you know, Shopify is $29 a month. They give you a 21 day free trial. The domain name is $10. So you're at $49 like or $39 two months into your business. Besides that, your costs are going to be advertising expenses and Google gives you $100 credit to start using Google Shopping. So like a lot of it, it's not really about money. It's more about being willing to put in the work that it takes to build it. But a few hundred bucks, you're good for a while.

Yeah. And if Google Shopping starts to work, I mean that a hundred bucks exactly, you spend a hundred and like you said, you're actually shoot. And this is a 10 to 1 return on ad spend is not, is not impossible to get, right?

No, no. And especially, and not only that, we're not looking to do that in 30 days or in three months. We're looking to do that within a few days. And I mentioned earlier those expiring coupon codes and the fact that when people find us, they know they're going to buy from somewhere, they're going to buy from us within a few days or they're not going to buy from us at all. So yeah, you get the return on ad spend back very quickly again, assuming you do everything right. So I don't want to make it sound too easy, but if you do it right, people buy sooner than later.

Is Google Shopping pretty straightforward to figure out? I know there's some nuances to it, but it's.

Yeah, it is. There's different strategies. Like you can't use just straight up keywords, for example, so you have to use negative keywords a lot and kind of filter what you want traffic for by different ad group levels. So there's some learning required, definitely a learning curve, but it's not impossible.

Do you either suggest or see that most of your students end up trying to learn all that themselves or find go out to a place and find a Google shopping expert and pay them to help ramp it up?

Yeah, I think like almost any good Google shopping expert won't take on a client unless they're already making some money with their store. So most of our students, you know, we even tell them like, listen, you know, do it yourself. You don't have to be making six figures a month in sales, but do it yourself. Prove that your store is working, prove that you know everything is set up correctly, then it's a good time to have that conversation. But most people get to their whatever milestone they first want to hit on their own, so, so call it 10, 20, 30,000amonth then considering outsourcing it. And that's sales, not profit, Right?

All right, so what is a nut you're trying to crack right now in your business, your life, whatever. And by that I mean obviously getting more people to be aware of drop ship lifestyle so they can use that as a resource. But is there anything specifically that you're either trying to a person you're trying to meet, a skill you're trying to learn, something you're trying to figure out, just a nut you're trying to crack. This is where myself, my listeners can potentially be of value to you.

Yeah, sure. So something I've been, I guess experimenting with and kind of using for the past year or so is building up a YouTube audience. I just, I really like YouTube as a platform and our organic growth has been decent. It's not where I want it to be. So looking to get the subscriber count way up and looking to put out more of the type of content that I guess more people would engage with, with. So our YouTube channel is just YouTube.comdropship lifestyle. And I had a goal of having over 100,000 subscribers by the end of the year. I think we're at like 46,000 now, 45,000. So got some work to do on that. But yeah, give you some help on that.

So I've got a guy that I'm going to, I've got a Couple of introductions I'll make on that. One of them is, and I'm actually looking through my text messages here, a guy named Aaron Biblo. And Aaron is literally helping people with a very specific thing on YouTube. And he told me literally last night, he's like, yeah, I'll send you the bullet points of this. But he said one of the things, one of the things is he goes, we figured out how to make it so that really almost immediately you can get your videos as the suggested video, like the one that usually auto plays right after on somebody on like one of your competitors channels. And it's one of those things. He goes, it works like crazy. It's because his partner kind of figured out this either algorithm or this. I hesitate to call it a hack, but it's a way that it's like, oh my God, this is really valuable so that you can get on all different types of channels where it's the YouTube suggested video and they've got an entire strategy around this. And literally last night he sent me a text where I was like, hey, put this down in bullet points in case I run across anybody who needs some YouTube help. And he goes, yeah, I'll put together some bullet points for you regarding what it is, what it does, who it's for, and pricing. And if there's anybody out there listening on the podcast who also wants information, you can send an email to ask Brad at baconrapped and I'll make sure and just put, you know, YouTube contact in there and I will forward that on to you as well. But he's something I can definitely recommend. And there's another guy, he's a former. He's a former guest on the show named Brandon. Brandon Lucero. L U C E R O I think his. I'm just putting in his website here. I think it's sold with video dot com. Yes, soldwithvideo.com is his site and you can listen to. I'm just typing it in. Brandon Lucero. Cool on baconwrappedbusiness.com Brandon B R A N D O N L U C E R O and you can hear me grill him the same way I'm grilling you. So that's one of the nice parts about this show is you get to hear all the. The like let me hear the real stuff that's working as opposed to just the other stuff. So hopefully those two help you. And I will send you an email when we get offline about like an introduction and whatnot, so I can help you. But Man, I can't tell you, Anton, I've really enjoyed this and I think that, I think you're offering a tremendous amount of service and I can already tell that you know what you're talking about. You're not BSing this stuff. Sounds like you've been doing it for a while and helped a lot of people. People. So I recommend that every one of my listeners go out and check out dropshiplifestyle.com and if you have any questions about it, send an email to askbradaconratbusiness.com about really about anything and anything else to add. Any parting thoughts from you?

Not really. I guess I'll just close it with one thing. We briefly hit on Facebook ads before for these type of stores. You mentioned retargeting all the way. That's definitely the easiest win. Everyone should do that from day one. But if anyone does want to get into this whole higher ticket thing, don't try direct response ads to cold audiences with Facebook because you don't have a good chance of getting a good return on investment and it's just not worth it. You want those people that have intent already. So stay away from targeting cold audiences with thousand dollar products and you'll be good to go.

Right now. Would you do, would you ever do Facebook audio? Like so with Facebook on these higher ticket products, you just do retargeting then?

Yes. Yeah.

Okay, cool.

Like, you know, the store is much more established and even then what we're running traffic to is some type of buyer's guide or yeah, some piece of content and that doesn't always work either. So for most people new, I don't recommend it. That's. That's kind of like some of our experimental budget. Sometimes it does great, doesn't always make money. So if you're starting out and can't lose anything, don't risk it on that. Don't start that.

Love it. Anton, this has been fantastic. I truly appreciate your time today and for everybody listening, I hope you've enjoyed it as well. If you did get your lazy butt onto itunes and send me a review please, because I read every single one of them and I love to read them. And it's one of the ways that you can let me know that this has really impacted you. You can also send me an email to ask bradakenratbusiness.com show me that you did did. I'll give you a shout out on the show. Anton, thanks again for joining me. And for everybody else, I'll see you on the next episle. Talk soon.

Thank you.