Exposing The Truth About Shopify Dropshipping..
Summary
TLDRThe video script reveals the unsustainable nature of traditional drop shipping for long-term business success. The speaker shares their journey from drop shipping to building a multi-million dollar business by focusing on creating a strong brand. They discuss the common pitfalls of poor customer experience, intense competition, and issues with payment processors. The speaker advocates for using drop shipping as a stepping stone to find winning products and then transitioning to a branded business model, offering strategies for redesigning the store, working with agents for better products and shipping, and creating custom content to reduce ad costs. The script also includes insights from a successful e-commerce entrepreneur, emphasizing the importance of product differentiation and customer experience.
Takeaways
- 😀 Dropshipping is a good start for online businesses but not sustainable long-term.
- 🚀 The speaker has found success by pivoting from dropshipping to building a brand, generating significant revenue.
- 🛍️ The three main problems with traditional dropshipping are poor customer experience, easy replication by competitors, and issues with payment processors.
- 📦 Lack of control over product quality and shipping times often leads to customer dissatisfaction in dropshipping.
- 🏰 Building a 'castle' with a gate, bridge, and moat is a metaphor for creating a business that is difficult for competitors to penetrate.
- 🔍 Finding a winning product through dropshipping is valuable, but the focus should then shift to building a brand around it.
- 📈 Top Shopify companies transition from dropshipping to building long-term brands with real value.
- 🛠️ Redesigning the store to focus on a winning product and building a suite of products around it is a key strategy for brand building.
- 📹 Creating custom content with the branded product can significantly reduce advertising costs and improve conversion rates.
- 🤝 Working with an agent in China to brand the product, order inventory, and provide faster shipping can enhance the customer experience.
- 💡 The importance of improving customer experience and product differentiation is emphasized for building a strong brand.
Q & A
What is the speaker's opinion on traditional drop shipping as a long-term business model?
-The speaker believes that traditional drop shipping is not sustainable in the long term due to issues such as poor customer experience, lack of control over product quality and shipping, and high competition.
How has the speaker's approach to business evolved to generate multiple seven figures?
-The speaker has evolved by transitioning from traditional drop shipping to building a long-term brand with real value, focusing on a single winning product and improving the customer experience.
What are the three biggest problems with traditional drop shipping according to the speaker?
-The three biggest problems are: 1) Terrible customer experience due to lack of quality control and shipping delays, 2) Ease of competition where others can easily replicate and outscale your product, and 3) Issues with payment processors like PayPal and Shopify due to chargebacks and reputation damage.
What is the speaker's recommendation for someone starting with drop shipping?
-The speaker recommends using drop shipping to find a winning product but advises transitioning to building a brand as soon as possible to ensure long-term success.
How did the speaker increase conversion rates and reduce ad costs after transitioning from drop shipping to a brand?
-The speaker redesigned the store to focus on the winning product, worked with an agent in China for branded products and faster shipping, and created custom content for advertising, which significantly reduced ad costs and increased conversion rates.
What is the importance of building a brand according to the speaker?
-Building a brand is important as it provides a unique selling proposition, better customer experience, and a sustainable business model that is difficult for competitors to replicate.
What is the role of an agent in China in the speaker's business model?
-The agent in China helps to brand the product, order inventory, and provide faster shipping for customers, which enhances the customer experience and the brand's reputation.
How did the speaker reduce advertising costs by creating custom content?
-The speaker created custom content with their branded product, using their iPhone and friends to shoot ads, which reduced the cost per purchase in half compared to using generic online footage.
What advice does the speaker's friend Davey offer for someone looking to transition from drop shipping to building a brand?
-Davey advises focusing on providing a good product and an excellent customer experience. He suggests improving the product based on customer feedback and negative reviews to create a unique and valuable brand.
What is the speaker's plan for reaching 100,000 subscribers on YouTube?
-The speaker plans to do a live stream and a huge giveaway, offering free coaching calls and lifetime subscriptions to their software, to celebrate reaching 100,000 subscribers and to connect with the community.
How does the speaker describe the community they have built on YouTube?
-The speaker describes the community as amazing, with positive and uplifting comments on every video, and expresses a desire to connect and engage with the community members.
Outlines
🛍️ The Truth About Dropshipping and Building a Sustainable Business
The speaker candidly discusses the limitations of traditional dropshipping, highlighting its lack of sustainability in the long term. Despite its benefits as an entry point for online income generation, the business model suffers from three major issues: poor customer experience due to lack of quality control and shipping delays, easy replication of successful products by competitors, and challenges with payment processors due to chargebacks. The speaker shares their personal journey of transitioning from dropshipping to building a long-term brand, emphasizing the importance of finding a winning product and then moving away from dropshipping as soon as possible. The summary also mentions a high-profile Aliexpress dropshipping store that shut down due to these issues, illustrating the points made.
🚀 Transitioning from Dropshipping to Brand Building for Long-Term Success
This paragraph delves into the speaker's strategy for evolving a dropshipping business into a branded entity. The process involves three key steps: redesigning the store to focus on a winning product, either by expanding with related products or by creating a product suite; working with an agent in China to brand the product, manage inventory, and expedite shipping; and creating custom content for advertising to reduce costs and improve conversion rates. The speaker also interviews a successful entrepreneur, Davey, who has built multiple e-commerce brands worth over 250 million dollars, to gain insights into branding and scaling a business beyond dropshipping.
🎉 Embracing the Community and Looking Forward to Future Growth
The final paragraph focuses on the community aspect of the speaker's journey, expressing gratitude for the support and engagement of the audience. The speaker announces plans for a live stream and giveaway once the subscriber count reaches 100,000, aiming to connect with the community and provide value through coaching calls and software subscriptions. The summary underscores the importance of transitioning from dropshipping to a more stable and profitable business model and invites viewers to join the growing community for further support and guidance.
Mindmap
Keywords
💡Drop Shipping
💡Customer Experience
💡Scalability
💡Chargeback
💡Branding
💡E-commerce
💡Product Differentiation
💡Conversion Rate
💡Advertising Cost
💡Custom Content
💡Direct-to-Consumer
Highlights
Drop shipping is not a sustainable business model in the long term, despite being a good way to start making money online.
The speaker has generated multiple seven figures and is on track to do over two million dollars in sales without drop shipping.
Traditional drop shipping often leads to poor customer experience due to lack of quality control and shipping delays.
A case study of a large AliExpress drop shipping store that shut down due to customer complaints about delivery times and product quality.
Competition in drop shipping is high, making it easy for others to replicate and outscale successful products.
PayPal and Shopify Payments can shut down high-level drop shipping businesses due to chargebacks and reputation issues.
Drop shipping is excellent for finding a winning product without the need for inventory.
Transitioning from drop shipping to building a long-term brand is recommended once a winning product is identified.
Top Shopify companies focus on building a brand with real value rather than maximizing drop shipping profits.
A personal story of transitioning a product into a brand, resulting in increased conversion rates and reduced ad costs.
Three steps to transition a drop shipping store into a brand: redesigning the store, working with an agent in China for branding and inventory, and creating custom content.
Building a suite of products that complement the main product can significantly increase sales, as seen with the 'Snow Teeth Whitening' brand.
An interview with Davey, who built an e-commerce empire worth over 250 million dollars, discussing the importance of branding over drop shipping.
Davey's advice for improving customer experience and product differentiation to build a strong brand.
The importance of conducting research, improving based on feedback, and standing out in the market to build a successful brand.
An upcoming live stream and giveaway to celebrate reaching 100,000 subscribers, offering free coaching calls and software subscriptions.
An invitation for viewers to join the community and participate in the live stream for personalized advice and discussions.
Transcripts
i'm gonna be honest with you drop
shipping is not as great as people make
it out to be now don't get me wrong
hit is a great way to start making money
online and it has changed my life in so
many ways but the business model
is just not sustainable in the long term
but by approaching this business in a
slightly different way in the last few
years i've generated multiple seven
figures and as you can see this year i'm
on track to do over two million dollars
in sales without drop shipping so in
this video
i'm gonna be exposing the raw truth
about drop shipping and why i moved on
my exact approach that's generating me
over a hundred thousand dollars a month
consistently and we're even going to be
talking to one of my friends who has
built an
empire on shopify with multiple brands
worth
over 250 million dollars to get his
opinion on this
so let's break down the three biggest
problems with traditional drop shipping
this first problem is the main reason
why drop shipping stores don't succeed
in the long term
most traditional drop shipping stores
provide a terrible customer experience
we do not care when you're drop shipping
directly from aliexpress you have next
to no quality control over your products
you have zero control over the shipping
lines your supplier is using which
causes your customers to have to wait an
extremely long time for a product that
might not even be that good
it's not all bad though there's still a
decent amount of good suppliers on
aliexpress
though it's the lack of control that's
the issue and almost always leads to a
poor customer experience i want to take
a look at one of the biggest aliexpress
drop shipping stores of all time this
store actually shut down a couple months
ago because of this exact reason
so if we take a look at the reviews of
this store seconds
you can see that they have a ton of
reviews they have over a thousand
reviews
and this single-handedly killed their
business people are complaining about
the exact things that i just mentioned
they're complaining about slow delivery
times low quality
products six weeks to arrive these are
the exact issues that you're gonna run
into when drop shipping from aliexpress
if this store made this small change
that we're gonna talk about later in
this video
they would still be thriving and making
sales to this day
but as you can see the poor customer
experience pretty much just killed the
opportunity
let's talk about the second biggest
problem it is extremely easy for
somebody to come and steal your winning
product
as long as they come in and apply the
same tweak that i'm using
they're gonna be able to kick you out of
the marketplace and outscale you on your
own product i've seen this happen time
and time again and i've done this to
drop shipping stores using my method
competition is okay and it's actually
really healthy but you have to build a
business that makes it difficult for
people to come in and compete with you
think of it as if you were building a
castle and trying to keep people out the
best structures always have a gate
a bridge and a moat making it extremely
complicated for somebody to break in
you need to approach building your
business in the same way and we'll talk
about how to do that very shortly and
the last problem which gets super
annoying when you're scaling
is that everybody wants to shut you down
paypal and shopify payments
do not like it when you dropship at a
high level because since people have to
wait a really long time for their
product
a lot of times they will do a chargeback
which really hurts their reputation with
the banks which makes shopify and paypal
look at you as an unsatisfactory client
which usually will end up with them
holding a portion of your money or even
shutting you down entirely
so for these three reasons i'm out but
there actually is a way to use drop
shipping to build a long-term business
it all comes down to using it for the
right reasons drop shipping is
extremely good for one thing finding
your first winning product since you
don't have to order inventory it's
pretty simple to try out a bunch of
products until you find one that's
selling consistently and once you find
that product you should transition as
soon as possible to this
this is exactly what the top 100
companies on shopify are doing
let me explain instead of focusing on
making as much money as possible with
drop shipping
my goal is to build a long term brand
with real value
i simply use drop shipping as a means to
an end once i had a product that was
selling consistently and had
potential to grow i decided to build a
brand around that product
immediately by the way if you need help
with that testing process i made a
detailed video on how to get started
so make sure to check that out but for
making this simple change
i immediately saw a higher conversion
rate much cheaper ad costs
people were spending more money on my
store and the word started to spread
which brought in more repeat customers
this simple change took my business to
the next level if we look at the graph
from day one of starting this business
you can
see exactly what i'm talking about so in
the first month of testing products i
made around seven thousand dollars in
sales
in the following month i made around
sixteen thousand dollars and this is
when i found that winning product
and i transitioned it into a brand at
the end of this month and you can see
the following month i almost
5xed my revenue just for making that
simple change and by the end of the year
i had surpassed over a hundred thousand
dollars a month in sales and have done
that
every month ever since so now i'm going
to share with you three simple steps to
transition your drop shipping store into
a brand
the first thing i did was completely
redesign my store to focus entirely on
this product now there's
two ways to do this the first way would
be to fill your store up with a bunch of
products that are similar and go hand in
hand with your winning product so this
store actually started by scaling this
product and since then they expanded by
adding a ton of other products
and selling those to their list as you
can see this brand is bringing in over
500 000 monthly visitors and they're
absolutely crushing it
the other way is to build out a store
entirely for that product itself
and build out a suite of products that
you can use alongside it
so as you can see with one of the
biggest shopify stores snow teeth
whitening
they have the teeth whitening kit
whitening wands serum
toothpaste and floss it's all really
solving the same problem
and they go hand in hand together and
this store is making millions of dollars
a month and they even made it on ellen
the other day which is really cool
the second step is to work with an agent
in china to brand your product
order inventory and provide faster
shipping for your customers now i've
made a whole dedicated video on this
topic so if you want to check that i'm
going to put it in the card up above
once you have a winning product this
process is extremely simple these
companies are excited to work with you
and they're going to do what they can to
get you the best price and the best
experience for your customers
though be careful because there are some
untrustworthy agents out there
though i can recommend you a good one in
the description down below
and the third step which literally cut
my advertising cost in half
was taking that new branded product and
making custom content with it so instead
of using ads with footage i found online
i shot my own ads with my iphone and
some friends
and this literally sliced my cost per
purchase in half
i also took nice and clean photos with
our branded product
which really helped with our conversion
rate these three changes alone
will allow you to take that leap from
running a drop shipping store
to building your own brand of course
there's a lot more that goes into it but
these changes alone will set you apart
from 99
of people that are trying to sell the
same product which will allow you to
make a lot more money and run this for
much longer
now even though i've had some success
with shopify there are people out there
that are doing much
bigger numbers than me one of them is my
friend davey davey has built an
empire of e-commerce brands worth over
250 million dollars he is someone that
has absolutely crushed it with branding
so i want to give him a quick call and
get his opinion on this and also asking
for advice for myself
and for all of you out there let's see
what he has to say
yo what's up bro how's it going yo how
are you
good to hear from you bro so i think a
good place to start would be to tell the
people a little bit about you
guys so i'm david fogerty i am founder
of the hoodie
i've also got 10 other direct to
consumer e-commerce brands
all built on shopify over the past 12
months we've done about 300 million
dollars revenue
so you know we're acquiring direct
consumer ecommerce businesses and
growing them
that's incredible and you just started a
youtube channel as well right
just started a youtube channel so a bit
late to that party but we've just been a
little bit too focused on 13 friends but
yeah now it came to our story awesome
man what are your thoughts on drop
shipping for beginners and people who
are just getting started it's such a
an amazing thing that you know someone
so young
with such little money can actually
start a business nowadays so yeah i
encourage it
mainly because you know i've found so
many businesses before and
drop shipping really allows you to kind
of just fail and the only expense is
kind of your time
in putting in putting together sites so
yeah keep
keep learning and test with drop
shipping and eventually you'll hit that
winning product that can
you know teach you further but yeah i
don't don't recommend drop shipping long
term to be honest i suggest you know
going into
branding and building building a store
to be proud of
what would you say for somebody out
there that is doing drop shipping they
have a product that's doing well but
they want to take that leap over to
building a brand
yeah sure so probably it's good to break
down what a brand is
first drop should be a brand is a good
product
and a good customer experience so if you
already have an amazing product that's
differentiated
then chances are you might just need to
improve the customer experience and get
a 3bo
and shipping time but if you don't have
a unique product that is actually
solving the issue and it's just a
gimmick or a fad you're going to want to
like go back to the product development
stage
okay you've proven this helps with back
pain or something like that
you know now then you need to actually
either work with product engineers or
just even simpler as going through your
negative reviews or your competitors
negative reviews and saying
okay this material is causing a negative
review what can i then improve
and make my own to therefore make a good
brand it's a bit of research and
the fact that nobody else does it is the
reason why you should do it
because then you can you know charge a
bit more with your margin and
yeah have a have a product to be proud
of yeah that's really good just taking
what's already working and improving
upon and providing the best possible
experience
i think that a lot of people out there
are going to be really inspired by your
story
and your tips are really going to help
them a lot and i've actually become a
fan of your youtube channel i've been
watching all your videos
so let them know a little bit about that
and what your plans are for the channel
and where they can find you
yeah for sure head over to davey
foggerty we've just launched
four videos now we're going to take
people through the entire process
of what we do talk a little bit about
some really hard lessons that we've had
as well like we've got so many failures
um really just wanting to you know
inspire australians and
people in the us to you know kind of
kind of follow our footsteps and try to
build a brand that
that you can be proud of yeah that's
amazing man you're going to help a lot
of people in the process thanks for your
time the people are really going to
appreciate this one and
yeah man thanks man i'll check you soon
yeah appreciate everybody so hopefully
at this point you can understand why
it's important to not rely 100
on drop shipping it's a great way to get
started but it's not the way for the
long term thanks so much for watching
this video i hope you enjoyed it and
found some value in it
our family is growing like crazy and we
are this close to hitting a hundred
thousand subscribers once i hit 100 000
subscribers i'm going to be doing a live
stream
and do a huge giveaway where i'll be
giving away hundreds of dollars
free coaching calls and free lifetime
subscriptions to my software
i'm gonna be hanging out with you guys
for around two hours answering any
question you may
have reviewing your stores and really
just chilling with you all because at
this point we've built such an amazing
community and i want to really connect
with you guys the amount of positive and
uplifting comments i see on every single
one of my videos
is so special to me so i just want to
say i absolutely love this family we
have built and if you're not already a
member
make sure to click that subscribe button
down below stay tuned for that live
stream that's going to be happening very
soon
that's all for this video i hope you
guys have an amazing weekend
i'll talk to you very soon peace
[Music]
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