Hello, first of all I want to say that I have nothing against dropshipping business model, but most people are too hyped up about shipping products from China, so I've decided to put together a list of other things you can do to make money online without spending a fortune to start up and what advantages there are of using such models compared to dropshipping from China. That can still be done correctly, but NOT with 2h spent on product "research", website "setup" and no plan for the future.
Note: None of these are easy to do and require you to do proper research, put a lot of time and effort into it.
Here is a list and reasons why it's better than dropshipping from China:
1) Find dropshippers in US, Canada, UK or Australia and ship it from there much faster and with much lower competition = have much higher chance of actually learning stuff, because it carries lower risk. Not as many people are interested in dropshipping from these countries or aren't willing to put enough effort into the research of manufacturers. Either way, read my last sentence of the post above. Like I said, it can be done successfully, but requires you to still treat it as a proper business and put enough time, effort into this.
People are willing to pay 5x-10x or even higher price for a premium product or with a tag "made in US" if done right. For example there are watches that sell on Aliexpress for ~$3-5 a piece + some have free shipping, other's do not, but let's even say $7 (max) a piece. People sell them for $25 or so if shipped from China and have more issues with it than someone like MVMT watches that do thousands of sales a day at $125+ a piece with really similar style watches made in US (not all of them are made in US) and that are put in a much nicer package, have much better shipping times. There's nothing wrong with making a premium product made in US and I've been doing it for 7 years without having issues on a single one of my businesses. There have always been people with 3+ times lower product prices than what I sell them at, I don't really care because I'm not competing on price point when I have a lot of added product value.
Let's take something like influencer marketing now as an example. What do you think are the chances of influencers promoting your product that 100 more stores sell, where it arrives to them in a plastic bag with Chinese tags all over it and all the materials look low quality. You'd have to pay quite a lot extra for someone to promote that, which adds extra expenses as well. Compare that to them receiving a nice package with personalized note, english + many other language instructions and a unique product. That has 50+ times the chance to be promoted by an influencer than any of your bullshit $2 products from Aliexpress (i'm not including "influencers" that have grown their "following" with bots, follow automation or any of the other shit, because those have "followers" that are not converting at all).
Another thing - price. Let's say you can get that same watch I've mentioned before for $7 a piece. If you want to sell it at a competitive price, then it should be sold at ~$15, but for the sake of this let's give it a sale price of $25. Now take a watch from US that costs $20 to make + roughly $5 for nice package and shipping, but can be sold at roughly $100 because of high added value, not as much direct competition, much higher quality, much better presentation, shipping times, etc. So on the shitty $7 watch you have $18 to acquire a customer while for the next one you have $75. Yes, I do agree that the second option might have lower conversion rates, but you'd have way more profit in total (with same amount of time and effort used to sell both). Also you would advertise to completely different audience, but that's not my point. You can have much higher customer acquisition costs and still make way more money while actually building a reputable brand known for high quality products and not some shitty Chinese products. On top of that when people receive a better quality product, they can make return purchases in the future, so you'd spend remarketing budget much more efficiently than with Chinese products that noone is going to purchase again.
Let's take the highest converting advertising method out there (by far) as another example. That is word of mouth by friends / family members. Which product do you think people are more likely to recommend for their friends / family members? I think it's pretty obvious and I don't need to answer this. So that's a huge additional boost of highest converting traffic out there.
2) Create a digital product. This way the product is completely free (assuming you make it yourself). It can be as simple as a collection of ad formats, overlays or something like that on Photoshop. Really easy to do, just look at some samples and learn very basic use of Photoshop. Also you don't have to take care of shipping at all, so you stay in full control of all business operations while having much lower risk than dropshipping business.
It is as hard as having a dropshipping business and requires quite a lot of work (if not more) put into setup. The only difference - upselling a little, no shipping and 100% profit. People selling these will have higher conversion rates (depending on the niche, but usually it is), have no chance of getting their funds frozen by paypal, skrill, stripe or any other payment provider, because they are in full control of the product and don't have to worry about shipping. Additionally people wouldn't have 50 more businesses selling same products and directly competing with them with the same product pictures, really similar descriptions, same manufacturer, similar ads targeting same audience, etc. because all products are going to be made by you or someone you hire.
This also protects you from funds potentially being frozen by payment provider, all the hassle of shipping out wrong products, to wrong addresses (which you have no control of when shipping products from China).
Once again, coming back to influencer example. Since the product costs you nothing to make, you can literally give away products to as many influencers as you want, do giveaways on their outlets (blogs, magazines, social media, youtube, etc.) which creates a lot of hype = lots of sales. Best of luck doing the same with dropshipped items from China, where they'd arrive in a shitty way, are more than likely low quality and not as many people would agree to promote them + you have to spend some money to actually pay for the products and send them out.
I have tried sending my photo-related products to 150 people in 2 months since I've opened up. All of them have blogs with lots of photos in them. 102 of them agreed to work with us without any additional payment (i just gave away more copies for free to their readers). Some of these blogs brought in 100 sales, in total I've made 2900 sales in 1st 2 months without paying anything for it. (just a website setup and that's it). Once again, not saying it was easy at all to get in touch with them and to communicate, to select which ones to target, etc, but I've sold products with average purchase price at $63. You can make some calculations to figure out how much that made me. And 31 of them still work with me, have affiliate links now set up to my site and constantly talk about my products on their social media and blogs, bringing in 350 sales a month on average. I have not spent a dime to pay them for doing that (other than affiliate $ based on sales that come from their channels, but that wasn't in place during 1st promotion that all these bloggers have done).
Good luck replicating that same thing without paying thousands in advertising fees with Chinese product dropshipping business, not matter how much effort or time you put into the setup.
3) Sell affiliate products. Not much to be said. Once again, don't have to carry actual inventory, worry about shipping and still can make enough if you put the time to research on how to set this up properly. Doesn't even have to be Amazon product sales, I know some companies that pay up to 25% in commissions on their products, but they don't advertise it as much and you'd need to do your own research, outreach, etc.
We have never used PBNs, bots or anything of that sort in our entire lives, haven't done any blackhat, haven't set visitors up to buy any courses and at the moment we are in the most competitive niches online - esports, fantasy football, poker news (not selling any guides to be successful with poker, nor do we have any affiliate poker website signup links. We just report on news and earn through different kind of physical product sales).
Obviously we didn't start with these, but that's what we've grown to do. I have to admit that there are quite a lot of PBNs in this market and a lot of competition, that's why I've always said - most important and time-consuming step when setting up affiliate website - niche selection. If a wrong niche is selected or not enough time is put into it, then it might take you years to make anything, but there are niches where it doesn't require nearly as long.
4) Do some item flipping. Most basic model that doesn't require you a huge money investment.
This is how I started. In a little over 1 year I went from flipping phone chargers, to flipping cars and this is where I got my 1st money to invest into future businesses. It all comes down to effort and time you put into researching ways of doing this, researching products, etc. I know several people that do this on a much smaller scale and make ~$1k a month on the side (spending roughly 10-12h on this a week). They are not trying to scale it to to make it replace their work, but could do ~4-5k a month if they worked full-time. If that's no scalable, then I don't know what is. In a couple of months doing this on small scale, you can start doing cars and make usually ~1-2k per car sold. Once again, not saying it's easy or that it doesn't require time or knowledge, but it can be scaled.
If you wanna talk about things that have very low risk, then there are several ways of doing it without trading small-cost items. There are bigger items like broken washing machines, refrigerators that people do give away for free as long as you collect it from their place. You can take it apart, sell some parts, take the rest to scrap yard. Could also make a couple grand a month just doing this (a good friend of mine tested this) with 95%+ being profit, because you get items for free and all you pay for is gas. This isn't the only thing that can be done flipping items, but most people are too afraid to try or don't put enough effort into this.
5) Testing out a product and interest in it without actually having it manufactured. If done properly, it will show you how many highly interested people there are out there and you can make an MVP (minimal viable product) for usually a couple of hundred dollars, run with it, see how they actually sell. If they actually sell well, then you can start ordering more and more.
This can be tested with something like $10 or $15 in your pocket.
Once again, let me say that I have nothing against dropshipping from China, I just know there are better ways of making it work online with minimal investments. Also I've only used influencers as an example of why these are better than dropshipping from China. I could go on with similar stuff for social media, publications in blogs, magazines, organic traffic through search engines, etc. but then you'd have to read another 20 paragraphs on the topic.
NONE OF THESE ARE EASY TO DO OR RESEARCH!!!
If you have any questions, then send me a PM and I will get back to you as soon as possible.
P.S. There is no link to my blog, youtube or business? What is this sorcery?
Submitted February 01, 2017 at 04:17PM by im_pulsing http://ift.tt/2kQuBjm Entrepreneur
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