Another eventful month has passed and Amer can't wait to tell you all about it. But before we start, if you’re not sure who he is, then you can read the previous parts of his dropshipping story here. Plus, just to get some perspective here, this is what Amer wrote in his first part:
Should I pull the plug after the fourth month, I can hand on heart say I tried, but I feel good about this adventure.
Curious now how it's going with him after a bit more than two months passed since he wrote the first part of his story? Let's go!
I am now finally in a position that I can actually live solely off the money which I have been making from the store. This is somewhat a blessing given the current circumstances.
Where I am now
As the weeks have passed, my sales have progressively gotten more, I have sneaked in a small increase in prices and it didn't affect sales at all.
Increasing my ad spend until recently has increased sales consistently however I do believe I have found the ceiling in how effective this is in my target countries. I do plan to open up to more countries however not while the world logistics is the way it is.
Some copycat newbies have however moved in, and this has indeed driven my CPC right up. I am of the belief they are not converting sales or at least not enough to justify their spending.
Their stores look very second rate, and their prices are not competitive. Google ads tells me their standard placements, and to get there, they are bidding way more than they will get back even at a generous 7% conversion rate.
This has however forced me to increase my ad spend a little, but I am not prepared to spend what they are per click, I am fairly certain that they are just blowing through their budget so it would be rude to interrupt a fool in the middle of a mistake.
I will just ride this one out, and whilst sales have taken a slight slump, I am not convinced it is them, rather just people spending less than they were a month ago due to the pandemic.
Last month I had a great deal of success getting sales to one country in particular (won't say here for obvious reasons). The interest was amazing, CPC was low and had a 6% conversion rate with them. Suppliers also advertised 17-25 days delivery too which seemed like a no brainer, the problem being they completely lied about that part.
I used my handy mailing system to send out a mass mail to all the people from that country explaining that things will take a bit longer to get to them, many of them responded and were incredibly understanding.
Even taking into account the pandemic, we are way over 17-25 days they estimated. At the time of writing this, I have yet a single order to touch down. I am now looking at a few hundred euros in refunds, and some already issued after 45 days as I promise under 35 in my shipping policy.
My main supplier has been an absolute godsend with these kinds of things. He will ask me first to wait 2 weeks; after then, I have been getting refunded directly, no further messing about. He doesn't want disputes opening as it harms his standing with AliExpress and I don't want to deal with the tedious BS that is the AliExpress dispute system.
So essentially, I lost the profit and the cost of ads which brought the customer to me. Communication is key; we talk daily, have a very good rapport, and share the occasional small talk too.
Other suppliers have however been a royal pain, giving me the standard 'please wait it' spiel. I haven't thought twice about opening a dispute with these guys, but I won't see any refund for quite a while.
AliExpress has extended their buyer protection due to Covid-19, what they don't tell you is that this is merely a means of kicking the can down the road, you now have to wait longer until you can open disputes in which they simply tell you to wait longer. It's very unlikely that I'll be getting a refund until 3 months have passed!
Fortunately, 75% of my trade went through the more reasonable supplier, or that problem would have truly buried the business.
I have streamlined my product range right down to 15 items, these items sell well and it is so much easier to manage and spot when suppliers try to pull a fast one and sneak up their prices.
I have also cut the suppliers who have not handled the above issues to my satisfaction. I am in the process of acquiring stock and selling it directly myself, or should I say through relatives in my target countries. My main supplier conducted his business in such a good way that I have bought all of my bulk orders through him.
A fulfillment center solution was considered however there is a great deal of stigma towards smaller businesses such as myself, they typically either say that the business is too small or they give me such a ridiculous price that it's a polite two finger salute.
Perhaps when it gets too much trade for my relatives to handle I will reconsider this, but as it stands they do very well and I pay them well for their troubles.
Currently, I am holding only my best selling product which accounts for probably half of my sales with the other products en route (albeit by snail mail).
With this method, I have already completed a few sales on a trial basis and customers have received their orders within 2-3 days, which is so much better than the 2-3 weeks we were normally looking at, plus buying bulk gave me a much better cost price.
We have been shipping by signed for mail which is a great way to deal with the chargeback scum bags we all know and love who claim they never received their order.
I have enjoyed writing these posts for Do Dropshipping, largely because putting this all down into writing really puts it into perspective.
Yes, I have distribution problems and competitors moving in, but I am also making consistent sales, and things are finally coming into place for a more reliable distribution solution.
Looking back to my first month when I thought the business wouldn't make it, I feel we have come a very long way.
It is unlikely I shall have another piece to write for Richard again as I intend to get out of the Dropshipping game the moment my remaining bulk orders arrive. Let's be realistic here, Dropshipping is only the beginning of much bigger things on the horizon.
My conversations with Richard have been great as getting his perspective on matters has been invaluable for them frustrating moments when you can't see the wood for the trees.
For all those people wanting to get into Dropshipping, Do Dropshipping has been my bible, my north star, my everything for the last couple months. Every thinkable subject has been covered here, so for the love of god don't go paying $$$ on some loser 'guru' who will show you how to sell a dog chew toy on Facebook, you are truly setting yourself up for failure this way. Dig deep, do your homework, and know exactly which questions to ask. (You can learn more about these ‘gurus’ here)
I want to part ways after my third and final post, in what has been an emotional rollercoaster for me the past three months, with a quote that we can all appreciate when the going gets tough.
Be thankful for the hard times, for they have made youLeonardo DiCaprio
Update: If you want to read Amer's follow-up story (4 months after this part), then check out this article:
My €300 Dropshipping Experience: Does It Still Work?
This article was written by Amer, a (wannabe) entrepreneur.