5,000 Hours of Dropshipping Research in 30 Minutes

What's going on, guys? So, fourscore and seven years ago, actually, three years ago, I started e-com. And to this day, I've done over $7 million in sales. I did not take the college route. I just went straight into e-com. Was working at a pizza place, and now I do it for a living. I live in an amazing house, I have a great life, everything, yada yada yada. We're not here for that. You guys are here for the sauce. And so, right here on this whiteboard, I have 5,000 hours, of e-com research, of e-com learning, of e-com experience compiled onto here and simplified into a way for you guys to understand if you're just beginning or if you're just learning. And so this video's gonna be super helpful to you guys, and I wish I knew all this stuff when I was first starting out. So let's get straight into it. So we have 3 sections here, as you guys can see. We have how do I start, how do I scale, and how do I maintain. So these are the 3 Main things that I wanted to break down today about e-com because obviously as a beginner, you need to understand how to start. If you're intermediate, you need to know how to scale. And if you are trying to get to that next level, that 7, 8, 9-figure level, how do I maintain? And it also kind of ties back into scaling. So let's just, without further ado, let's get into the video. So first things first, as you guys can see here, Up on the board, maybe I'll talk this way. We have, how do I start? Right here, the very first thing we say is to find a product. It's as simple as that. Where do you find products? Amazon, Kayla did a TikTok. It's basically the only place unless you wanna just scroll AliExpress or something like that, but you need to find a product. Then once you find a product, you need to validate it. Validating a product is basically the process of a couple steps that you have to take to see if a product is worth even running or not. So for validating a product, we need to understand what is the demand, what is the saturation competition, what is the content, and those 3 things are going to directly determine how easy it is for you to succeed with that product, how likely it is for it to scale, how likely it is to be profitable very early on. Because if it has no demand, no one's gonna buy it, right? If it has a lot of competition, a lot of saturation, then it's gonna be very hard as a beginner to compete and to make yourself stand out. If it has no content, so no video ads to use, if it doesn't have any existing, you know, winning formulas that are online or any TikToks or anything like that, you're gonna have to start completely from zero, from scratch with making content of the product. which is obviously a very difficult thing to do as a beginner when you don't have any money. So that is why we need to make sure that our products have the 3 pillars right there. So content, low saturation, no competition, and then demand. How do I actually find these things? Demand, you're simply gonna look if it's selling on Amazon, if they're selling on TikTok Shop, if they're selling on, you know, Google Trends, or if the Google Trends, It's a website you can look up, and it will actually, you can search up any term, you can sort from 2004 to present, and you can see the actual search volume, like people searching into Google that product, and you can see if it's rising or if it's, you know, just staying the same, if it's choppy or if it's going down. And usually you wanna find something that's kind of on an uptrend, right? And then for saturation competition, you're simply just gonna go through the ads library on Facebook, 'cause I'm talking about Facebook ads. I'm not talking about no TikTok BS because, It's just not a way, a channel you can build a sustainable business on, in my opinion. I've made 99% of my money from Facebook ads, just want to clarify that. So you are going to be looking on Facebook ads because that's where you're going to be running ads. And so what you need to do is go to Ads Library, you need to search up terms about your product, your product name. If there's ingredients in it, you need to search up the ingredients and figure out, you know, if anyone's running that product or anything similar. If they are running something similar, yours better stand out. If they're running that product, they better be pretty boo-boo, like it better be some scammy Chinese-looking website, or else if it's not, if they look like they know what they're doing, it's going to be hard for you to scale and likely is they're going to be better at you, so it's not a good opportunity. Content, you're just going to look on Kayla Data, TikTok, Instagram Reels, YouTube, and just see how much content there is out there talking about your specific product. We're dropshippers, right? We're doing e-com right now, in the beginning stage at least. We don't know how to create winning ads, we don't know how to do all this stuff. We have to use what's already out there to test. And so, if you can find a product that has really high demand, has like no saturation or competition, so no one's really running it, and then you also find content out there that's already made about the product, that is like the best place you can be in, and that is when you need to throw it up and see how it goes. And that's what I'm gonna get into next. Does it fit the criteria, right? Does it have all these 3 pillars? No, then you need to start over and find a new product, okay? Yes, then you need to come down here, right? You need to build the store with Claude and Hixfield, which I'm not gonna get deep into that, but Claude is the best for copywriting. Hixfield right now is the best for image generation, in my opinion. So for your product photos, your website photos, everything, you can use Hixfield, which is an— It's all AI basically. And then you can use Claude to prompt it, but I'm not gonna get deep into that because that would be another video. So you're gonna build your store using those tools. Then you're gonna get a seasoned ad account, right? Facebook. What do I mean by seasoned ad account? That means an ad account that has spend, that people have actually used. Not the ad account specifically, but the Facebook profile underneath it. So when you create an ad account, right, you have to have a Facebook profile, like a Facebook account to create it. And if you start from scratch and create a new Facebook profile and then create an ad account under it, it's just gonna get banned because you don't, like it doesn't think you're a real person. It thinks you're gonna be a scammer. It's like, you know, creating like on Reddit, like there's some forums and stuff that you can't get into unless you have a certain amount of history on Reddit. It's the same kind of thing. So with Facebook, you really need to get a seasoned profile to run on. That is actually not as hard as it seems. You can pay someone $50, like your mom, your cousin, some family member, a friend that does it, doesn't use Facebook anymore, but then maybe they used to use in the past, or just had a profile with some photos on it, just pay 'em, get the profile, and then build an ad account on it. Next thing you're gonna do is you're gonna run a $100 CBO, okay? We're not messing with ABOs right now. As a beginner, just do a CBO. Facebook's gonna pick the best creative for you. And then you're gonna run it for 3 days, right? And then after that, you need to understand, this is kind of where you have to understand all these other metrics and stuff like, what your breakeven ROAS is, how much your product costs to ship, all that stuff. I'm not really getting into that. I'm getting into the— The question you need to ask yourself once you understand all that stuff is, is the product close to breakeven, right? Is the product, based on your ad spend, your fulfillment cost, and how much it actually costs you to get a customer on Facebook, is it close to breakeven? If it is, then yes, you need to double down on that product. You need to go all in on it. You need to research it more, and I'll get that into the next step. You just need to dial it down. If it's not, then you need to go all the way back up here and find a different product, most likely. That is just basically how to start, super, super simplified for you guys right there. Next, we have how to scale, okay? This is where you kind of separate the intermediates from the beginners, right? 'Cause they don't understand how to scale. They just know how to like throw up a product test. And just rip ads, basically. Scaling is basically more volume, more testing, and more research. You're not scaling— scaling doesn't just mean scaling your budgets, it means scaling your effort, scaling your ideas, scaling your creation. What does more volume look like? It looks like more ad concepts. A concept is basically a format. You see those ads that are like, Street interview ads, that's a concept. You see podcast ads, that's a concept. More testing is gonna be more ads plus more spend plus more CRO. So testing is just simply, there's multiple things you can test. You can test, you know, different wording, different language on your landing page, which is like where you sell your product on your store. You can test, you know, actually adding ad spend and just like testing more ads that way. Or you could just add more ads and test that way as well, which ties into the more concepts. Then you need to find, what does that even say? I can't even read that, guys. Okay, the next thing about research is finding, what does that say? Find problems, I think that's problems. Yeah, so you need to find more problems and then find niches. What I mean by this, and this is marketing 101 for you guys, If you are starting out and you need to scale, you need to niche down. One, more niche down, the more niche you are, the lower your CPMs are gonna be, so it's just gonna be easier for you to be profitable. But also, the more niche down you are, the more you're gonna resonate with the customer. And this goes for everything, this goes for your website copy, this goes for your ads, this goes for basically this whole kind of thing, like the whole funnel of your business. Like the more niche you are, the more personalized it is to one specific individual, the better it is going to be. And so basically, how do you do these things? How do you find more concepts? How do you do more ads? How do you find more problems and find more niches that you can tap into with your product? One, with this, you just need to dive deeper, which is just Reddit, doing research on Reddit, doing research on Amazon, looking at Amazon comments, or I'm sorry, Amazon reviews, TikTok comments. Looking at even calling customers. That's something I've done recently is I've started to actually call customers and get their direct input on why they bought my product. And then you can understand why they bought in the first place, and so that just helps you to understand what kind of ads to make for them. Get more shots up is basically, you know, more testing is just simply just doing more shots, like taking more shots, right? 'Cause that's essentially what we're doing. We're taking shots, we're hoping they make, or throwing darts at the wall or hoping something sticks. You need to do it more. And the way you do more is by setting KPIs per week. A KPI is basically just something, I don't even know what it stands for to be honest. I should know, I'm 3 years into this and I don't even know what a KPI means. KPI is basically, if you're setting a KPI, it's like I want you to get 50 ads per week. That's kind of excessive, I don't think you need to do that. But like, I need to do 10 ads per week. I need to do 20 ads per week. Telling your team, telling your editors, or telling yourself how many ads you're aiming to push out a week is a KPI. So hopefully that kind of makes sense. And then for more concept, you need to research what is working. So to find these concepts, right, you're gonna go to Facebook Ads Library, you're gonna sort by highest impressions. It's that simple. You're gonna go to Facebook Ads Library and you're gonna sort by highest impressions. It's at the top right. You just click sort by highest impressions, and you obviously wanna search in something related to your niche or related to your product. So if I'm selling like a beauty product, I'm gonna sell, look up, you know, whatever I'm selling basically. So like an eyelash serum, or like, you know, eyelash removal, thicker eyelashes, stuff like that in the Facebook Ads Library. You're gonna sort by impressions, and it's gonna show you the top ads for that problem. So once you find the problem, once you find the niche, you search up the niche, You find the top concepts, the top ads that are winning, and you can simply just change the verbiage to your product. It's simple as that. And then once you do all of this, so you're finding the best concepts on Facebook, you're researching your customer on Reddit, calling them, you're setting KPIs. Once you do all this and you're actually pushing ads out, you're doing CRO tests, you're doing all this stuff, right? Basically scaling your effort, you need to start learning and doing learnings, which learnings is basically making a hypothesis on why one of those tests worked or why it didn't work. So basically, this is kind of the, the way it's going to happen, right? So you're going to have research first. So you're going to look on, you know, wherever you go. So let's say, for example, we're trying to find a concept. We're going to research different concepts We're gonna get an idea, we're gonna find one, we're like, "Oh, that makes sense. I think that would work really well with my product." Then we're gonna execute, we're gonna make a great ad, we're gonna make a great script, we're gonna test it, and then after a few days once we test it, or maybe a week or so, we're gonna perform a hypothesis because that ad's either gonna work or it's not. And we need to figure out why it did it or why it didn't. And that is the whole hypothesis. And then basically what you do keep doing this over and over and over again, you keep learning more, you have more hypothesis, you're going to build more and more data to actually back your decisions when it comes to your testing. So your testing becomes less of a just throwing crap at the wall and hoping it sticks. Your testing becomes more of an actual data-based thing. It becomes like scientific almost. It's like a lab experiment. It's a very analytical thing because you actually know why things are working, you know why things aren't, and so you know where to go. It's as simple as that. And the more you do it, the better you get, the higher your win rate's gonna get on your ads. And so it's basically just a circle around this thing. It's research, idea, execute, test, hypothesis. Next we're gonna do research, idea, execute, test, hypothesis. Now obviously you need to like make sure that you're actually learning from your hypothesis and actually not doing the same thing over and over again. But if you do that, you're just basically insane. So I hope none of you guys are insane. Next thing we need to do is understand the winning variable. So that is basically tied down to the hypothesis right here. A winning variable, right, is basically the thing in the ad that is working. And the way you can separate this is by taking whatever winning ad you have and then testing different parts of it. So you can test the hook, you can test the, the body, you can test You know, the call to action mechanism. There's a lot of different terms. I don't wanna like get super technical with it, but you need to test the different puzzle pieces, right? Puzzle pieces of your ads and figure out which one is the one that's actually working, what's driving the sales, and then put that into more concepts. Or you can even do more concepts. You can put it into a new niche. You can put it into a new avatar. You can put it into a new channel. What are these things that I'm talking about? Putting this winning variable that I found for my ad into. So let's say we have a winning ad, we understand the variable, maybe it is a podcast ad. And the podcast ads for my product are working super well for solving a fan that blows cool air and like solving heat stroke or something like that. Now we're gonna find a different angle. So what else are fans used for? You know, maybe heat stroke, But also they're used, you know, to sleep. They're used to, um, just for the noise and stuff like that. And so we can take a podcast ad and instead of talking about heat stroke, we talk about sleep. And then that is going to be a new test because we know it works in one way. Let's see if it works in this other way. Another way you can do this is by changing the channel. So it's literally putting the same ad on a different channel or into a different format on like Google Ads or like TikTok Ads. That is another way you can scale. You can also scale by changing the niche entirely, which kind of is the same thing as the angle and avatar, like heat stroke to sleeping. Hopefully that makes sense. Next, we're gonna apply this new niche and angle avatar, and then we're gonna just repeat the process over and over again. We're gonna continue finding, continue doing hypothesis, finding winning variables, and then testing them in different places. And that's just how you scale. That's how brands are scaling to 8-fig, 9-fig, because they're dominating one niche first, right? They're focusing on one thing first, and then once they dominate that and they get scale out of that, they are taking all those winning concepts, all those winning angles into something different. It's exactly what I'm doing in this YouTube video. You think I came up with this idea by myself? No, I saw a guy talking about— totally forgot what it was already, but talking about something about dopamine on a whiteboard like this. I was like, yo, that would be super sick to make for e-com. Boom, and this video's gonna do well, and you'll see that. And then basically, you wanna keep doing that, and then you also wanna study the brands that do this. So like I said, all 8 and fig, 8 fig, 9 fig, which is basically 8 fig is like $10 million, 9 fig is $100 million. Those level of brands are the ones who are doing this the best. So if you study them, you understand what niches, what angles, what problems they're tapping into, because the problems they're probably tapping into are ones that are alive and well, you could probably tap into them too. With your own product, with your own marketing, with your own mechanism, right? And then this applies everywhere. So this applies, this whole thing I just talked about, the testing, executing, hypothesis stuff, it applies to landing pages and funnel, which is CRO. It applies to pricing, new gifts, upsells, which is offers. And obviously it applies to ads, like I just kind of described for a ton of time. And so, It applies everywhere. So this is like a very simplified version of how you scale. It's basically you test, you make a hypothesis, you learn from the hypothesis, eventually you find something that wins, and then you scale that winning thing into new markets, new channels, new avatars, new angles, new formats, all that, right? And that is how you scale an e-com store. Wow, I can't even talk, guys. In the chart. But next thing we wanna talk about is how to maintain, right? Maintaining, right, is the next level because a lot of people don't even understand how to scale. Some people don't even know how to start, but very few people know how to actually maintain a brand, build a brand that you can actually like exit, right? Something that you can actually sell for money. And to maintain a brand means to be able to run it long, to be running it without a problem. If you're gonna be building a sellable asset, like an e-commerce brand, it needs to, one, be different from others. You need to have some sort of moat, which a moat is basically the water that goes around the castle in those little fairy tales or those books or whatever. And so the, I don't even know what, the dragons, no, dragons can fly. The goats, the evil goats can't get into your castle because there's a fricking river around your whole castle. That's what a moat is. Your product's the castle, The moat is the river. So we need to freaking do that and separate ourselves by a few different ways. And I'm going to talk about that right now. So number 1, backend. And these are also like leaks that we need to fix as well. Moat and leaks, like, it's not really the same thing, but I don't know why I went with it. Fixing leaks, backend, right? Backend is the first thing we're going to talk about. If you wanna have a business that maintains itself, one that you could run year-round, one that you can continuously make money on, one that you can even outsource to where you're just kinda like a CEO and you tell people what to do but you don't do any work, that's basically what I do now. How do you do that? Is by, one, having fast shipping, support, and softwares. So it's just speed. When it comes to backend, it's just speed. And your backend is your fulfillment, it's your customer support, It's all that type of stuff that happens not on the upfront, not in your store, not on your website, but on like actually fulfilling the service, right, fulfilling the product. And so fast shipping's important because it just makes your customer experience better, it's plain and simple. Support is important because it also makes your customer experience better because inevitably some people are gonna have problems, some people are gonna lose packages, it's gonna happen, so you need to make sure your support's good. And then softwares as well, chargeback protection, stuff that will help you keep your processor, which like I'm not even gonna get into, it's super important. And so you need to have a really solid backend. You also need to have a really solid product. And this is honestly probably one of the most important things. I didn't really put these in order of importance, but the product is above all the thing that's gonna build your brand. The quality, the effectiveness, the branding, you know, how you differentiate yourself, which branding is a way to build a moat. Quality is a way to build a moat. Even effectiveness, because a lot of people out there are just selling garbage. That's a way to really differentiate your brand from other ones, right? To have a better product, it's a great way to do it. So if you have a good product, more people are gonna come back regardless of if you're doing subscriptions or not. They're just gonna love your product, wanna come back. That's gonna increase your LTV, you're gonna be able to spend more, and that's gonna build a moat, right? And that's gonna be easy to maintain. Systems, which is like, Basically, the infrastructure, or I don't wanna say that word, that word's too big. But it's basically the little army that you build that does all the work for you so you don't have to stress about every single thing, right? So different types of systems there are. I talk about it more right here, but systems you need, they're good because if you build a system, you're faster, you can build them to learn on themselves, and then you can also hire really good talent to come into your business and actually improve it. And so like having systems already in place really helps that. I'm gonna get more into that in a second. And then also is maximizing LTV, which is like emails, SMS, upsells. It's just like more stuff so that you actually make more money per customer rather than just having to rely on ads the whole time. Because if you're just relying on ads and not like a certain channel like Facebook, like Facebook, there's ups and downs, bro. Like Facebook is never a linear, super predictable, it's pretty predictable, it's more predictable than other stuff, but it does have its ups and downs. And so you need to have emails, SMS, upsells, so that you just have more margin to play with. And like, who doesn't want more margin, right? Next, I wanna talk about systems. And so building systems is also how you maintain a brand, how you maintain a store, how you maintain actually sales. Selling a product for long-term. And basically, when you think about building a system, you wanna think about building a store that works without you. So you wanna replace yourself. So what are the things that you do on a day-to-day basis? Well, you probably, if you don't hire anyone, you're gonna have to be doing customer support or support service. You're gonna have to be doing creatives, you know, making ads, making landing pages, CRO, and you're gonna have to be filling orders and managing your supply chain. Supply chain's not super important if you're under 7 figures. If you get above it, that is kind of when you have to worry about that, so I'm not gonna talk too much about that. But supply chain and all these different systems are stuff that you can outsource. You can actually hire people that are smarter than you, people that are more qualified than you, and people who know more about you, and actually have them run these things in your business and actually scale it even further or just make it even more efficient. And so that's why systems are important. It also gives you the opportunity to step back, not be super stressed every day, and you're more just like an operator rather than someone who's doing all the work themselves. And when it comes to maintaining and then you building something that's maintainable and exitable, they wanna see that they can come into the business and just basically that the systems are already there. They're just buying an asset. They don't wanna have to make ads or anything. They just want to kind of take it and scale it. Systems are important. Next, the most important part about this, probably the whole thing, honestly, is AOV maxing, right? And this is what we get to next. Because the more you can spend to acquire a customer, the bigger scale and the more you can outcompete. If I could spend, if every time a customer comes to me, and LTV, by the way, is lifetime value. Lifetime value. It's a very important term, you guys need to know it. It's how much a customer spends with you over their lifetime. So because when we're running ads, right, we pay upfront to get a customer once, most of the time. But if we build a brand, if we do all these steps, right, if we build a product that's good, we build a brand that's good, we do all these things that are good, and then we build a great service, they're gonna wanna come back. And so maybe they order from us a second time or a third time. And so our LTV is not gonna be, let's say I'm selling a $40 product, it's not gonna just be $40, it could be, 80 or even 120 if we're maximizing everything. And if we know a customer is gonna be spending $120 with us on average their lifetime, then I don't need to just spend $20 to acquire a $40 sale, I can spend up to— No, it's like 40. Oh wow, that was really easy. I can spend $40 to acquire them, right? Because I know they're gonna spend X amount. With me over the period of their life. So that's why AOV's really important. But the thing about AOV is that is why all roads lead to subscription offers. Everyone and their mom, every person who's done e-com and probably is over 7 figures at this point, are all trying to do subscriptions. Why? It's because it's the best way to AOV max. It's as simple as that because You might be asking why, that's why I put a big why here. Because with subscriptions, they're opting in to receive the product every month, so you're gonna have a higher returning customer rate, which equals a higher AOV, which equals higher scale. Because we talked about how AOV, if you have a higher AOV, you can spend more on customers. If you can spend more on customers, you can scale higher. And so I'm gonna break down this kind of little diagram for you guys about why all roads lead to MRR. Okay, so I'm getting low to the floor right now, but I have a little diagram built out. So we were talking about a $40 product, right? $40, right? And let's say to fulfill this product, so the cost of goods, like how much the product actually costs plus how much it costs to ship it, the cost of goods, which is those two things, is $10. So basically I'm selling a $40 product that I get for $10, okay? That's gonna give me a 75% gross margin, which a gross margin is just literally your product price divided by your cost of goods. And so that's gonna give me, if I want to be break-even upfront with selling this product, I'm gonna have to be able to spend or get a customer every $30 I spend on ads, right? Every $30, I need 1 customer and I'm gonna be break-even because 30 plus, the cost of fulfill, which is $10, equals my $40 price point. 'Cause every time someone purchases from me, they spend $40, but I paid $30 to get that customer to purchase from me, 'cause I paid $30 on the ad, and then I have to pay another $10 to fulfill the order, right? So it just evens out. So I kinda go through that here, $30, one order, $40, right? And then $40 minus $40, which is the ads plus the cost to fulfill, I end up just breaking even completely, zero. And that's if I'm running just straight up like upfront, like a physical product, like I'm selling like a book or something, right? That is what would happen. But if you have M, it is not MMR, that is from Rainbow Six Siege. It is MRR. If you have MRR, you can potentially get them to come back. And that depends, you know, obviously on how you do it and like if you set things up, like there's just different rates and stuff. But let's say that the customer came back the second month and purchase from you again. Well, you didn't have to pay more money to acquire them, right, 'cause it was a subscription. You didn't have to pay more for ads to get that customer. And so they just give you another $40, you pay the extra $10, so now you're paying $50 instead of $40 to fulfill it, which leaves you with actually some profit, $30, which is like crazy because if you had an upfront product, like if I was selling this book, it wouldn't work. But if I'm selling, I probably have something, If I'm selling this, something that people wanna buy every month, I think these are essentials for men, I don't know. If I'm selling something like that, then I have the potential of the customer wanting to come back because they got the subscription. So that's basically, in a nutshell, why everyone wants to do MRR, and this is supposed to be an R. It's because you can literally lose money up front, don't recommend it if you're a beginner, but you can lose money up front and then make a ton of money over the life period of your business. And it just makes it way easier to maintain something because you're not constantly worrying about paying for something upfront every time. You're not constantly worrying about being profitable first purchase. You can actually, if you know your numbers, if you know your LTV, if you know all the statistics that surround it, which there's a lot and there's a lot to teach, then you can actually understand, okay, I can scale at this, ROAS, or I can scale at this number, right? Or I can scale to this figure, and then over the life period of their time, I'm actually gonna be profitable. And so that's why everyone and their mom is getting into this, just so you guys know. But that is basically everything I've learned from e-com over the past 3 years, 5,000 hours in, that I can basically share into a nutshell in this video. Obviously, I can go way more into depth on every single thing in this video, but that would take 5 million years to make. So I just wanted to kind of give this all to you guys, give a grand board that you guys can look at that kind of just shows you the beginning, how you do e-com in the beginning, how you scale, and then how you maintain a brand. And then eventually, if you do this right, you can literally exit it for millions of dollars, which is pretty crazy. It's like the only business model I think that you can really do that. You can't do that with trading. You can't do that with SMMA. You can't like exit like stuff like that. You can exit e-com brands because you can replace yourself. So that's the video, guys. That was a crazy video. Comment what you learned or what you are— any questions you have, anything. Sorry for my talking. I am not the most fluent Native American. I'm not Native American. But I— okay, obviously you guys, I'm a little autistic, but hopefully you guys enjoyed this video. I'm gonna go play some golf. I'll see you later.