 Starting a dropshipping business can be an extremely lucrative business model. Dropshipping right now is at its highest and pretty much everyone is trying to get into it. But the problem is a lot of people that teach you how to start dropshipping, they don't necessarily tell you everything that you need to know, especially before you actually get started. So going through all of the different tutorials on YouTube, you're going to find pretty much everything on how to dropship. And they're all going to be more or less pretty much the exact same thing. They're going to tell you how important product research is, how you can get your source started, where you should start dropshipping, and which course you should buy. Now, I'm not going to knock any of those tutorials because we also have pretty much some of the same tutorials that actually tell you how you can get started. But this video is going to be a little bit different. In this one, we're going to tell you exactly what you need to know before you start dropshipping. Some of the important things that most people don't cover. And the first thing that I want to mention when it comes to things that people don't cover is how much money people are actually making. So a lot of times people are going to tell you, I'm a millionaire with my dropshipping business. I became a millionaire because of my business. I make tons of money with this Shopify store niching down with just one product or just one niche. And here is the screenshot to prove it. So when it comes to these screenshots, you have to be pretty weary. So very rarely, but it does happen. Some people can actually edit these. So they're going to make it look like they made $600,000 in a year when in reality, they probably didn't make $10,000. A lot of the times people edit these screenshots just for show, just so that way they can trick people into thinking, hey, I know what I'm doing. Pay me for my course or just watch the rest of my YouTube videos so you can gain my knowledge. Now, again, this is not something that a lot of people do, but it has been seen before. Now, another thing I want to touch on when it comes to profit is gross versus net. A lot of the times people are only going to be showing you their gross profits. Why? Because it's a lot higher. That's a lot of money. Gross profits means your sales, period. No deductions, no item costs, no fees, just what you made from selling. And that is not realistic because every single time your net profit is going to be less than your gross profit. You have to remember that every product that you're selling for $100, you have to pay for that product to get it to your customer. So realistically speaking, you're not making $100. You're going to be making maybe 50 or 40. Really depends on how you price your items, but as you can see, it is going to be lower because you have to spend money to purchase the product, to have it shipped, to pay for the fees, to pay for the website, to pay for your domain, to pay for any transaction fees if you're selling on a marketplace. There's a lot that goes into profit that actually ends up taking out from your gross profit. So take for example, I sell a pair of shoes for 100 bucks, like I said. I'm going to have to place an order with my supplier for those same pairs of shoes to get them to my customer. Now let's say those shoes cost me $30 plus $5 in shipping. That's $35 already that's going to be deducted from the $100 that I'm making. On top of that, I'm also going to have to pay the fees for the marketplace that I'm selling on or the credit card processor or a transaction fee or whatever fee that's associated to it. So let's assume 10%, 10% of 100 is already $10. So that's $10 less than I'm going to be making. So on top of the $35 for the product, I'm going to be spending $10 in fees that gives me $45 that I'm going to be paying. So in this case, my gross profit is $100. So I can say that I sold an item for $100. But how much money did I actually make from that transaction? $55. So while I'm still making a profit, it's not as big as the gross sales. So imagine multiplying this by maybe 10,000. Let's say somebody had 10,000 orders in two or three months. If you sell 10,000 units at $100, then congratulations, you just became a millionaire. That is $1 million. But let's go ahead and start subtracting our fees and let's go ahead and start subtracting our product costs. So in the end, we're actually going to be multiplying $55 times those 10,000, which gives us $550,000 for net profit. That's how much we're actually taking. That's how much we're going to be keeping. Now, don't get me wrong, $500,000 is a lot of money, but it's not the million dollars that is being advertised if I'm talking about my gross sales. You're a liar. So you see where the discrepancy is? Now, realistically speaking, that's a little bit on the high side. A lot of the times you can expect your profit to be anywhere between 15 to about 20 or 30%. On some extreme sides, if you find some really good products that you find some pretty good prices for, then you can probably make up to about 60%, but I would say that's really kind of the top of how much you're going to be making when it comes to your profits. But on average, always assume that your gross profit is going to be about 20%. Now, speaking of fees, what kind of different fees are there? What can you potentially be charged for? Well, there's quite a few. So for one, you have selling channel fees. Selling channel fees can include anything from your subscription that you're paying on Shopify to the monthly payments that you're paying for whatever apps that you're using on your Shopify store. And of course, this doesn't only apply for Shopify. This applies for anywhere where you can set up your own shop and your own website, such as Wix or WooConverse as well. Aside from that, you also have transaction fees. Transaction fees can be charged whenever a sale is made. Typically, these are charged by the credit card companies. So let's say I made my sale for $100 on Shopify, then a credit card company that's processing the payment is going to take about 2% or 3% plus 30 cents. Of course, this is going to vary depending on where you're selling. Transaction fees can also be charged on let's say Etsy. So whenever you make a sale on Etsy, Etsy will charge you a certain percentage for that sale. Aside from that, always remember that you have to think about your marketing. So if you have your own website, you are going to have to pay for your marketing fees, which can come in the form of influencer marketing. So you can pay to have your items sent to an influencer and have them make a video on it or a review or whatever it may be, advertisement fees. So you can be paying for Facebook ads, let's say, or TikTok ads, which in my opinion, are a lot better because right now, TikTok is where you need to be. And the marketing fees can also come in the form of boosted or promoted listings. So let's say on eBay, Etsy or Amazon, you can pay to have your listing at the top of the list. So you can have it be featured or promoted. Now, if you want everything that I'm talking about here in an easy to reference written format along with all of the different links and some tips and tricks that I'm going to give you, then make sure you go ahead and comment down below, hashtag dropship now so you can get access to the cheat sheet. Everything I'm talking about in this video is going to be included on there along with all of the different links. So make sure you go ahead and request that by commenting down below. Once I see that you went ahead and left that comment, I'll go ahead and reply back with a direct link to the sheet. Also, before we continue, make sure that you hit that subscribe button if you're finding this information useful or if you're finding this video informative, if you like what you're seeing and if you want to keep learning more. So make sure you hit that subscribe button and make sure you ring that little bell notification so you don't miss out on any future videos. Now, we all know that product research is number one. Product research is king. You need to have a winning product in order to get any sales. You can't just sell absolutely anything that you want. But what a lot of people don't tell you about this and what you really do need to know is that product research actually takes some time. While, yes, you can accidentally stumble upon any product that can be a best seller, the chances of that happening are very low. So you need to use all of the resources that you have available to you to be able to make an informed decision on what to sell. Of course, you do need to have a product that has a wow factor and it needs to provide some sort of value to your customer. If it doesn't meet at least one of those two criteria, then the chances of it selling are going to crash. It's not going to sell. It's just going to sit in your store and you're going to get discouraged and you're going to quit. Sounds dramatic, a bit, but it happens a lot more than you think. Most of the times when people quit dropshipping, it's because they don't have a product that sells. So it doesn't sell and they get discouraged and they think this doesn't work. Well, no, it's not that it doesn't work. It's that you're not selling the right product. You need to use everything that you have available to you to find the right products. One example being TikTok. What more social proof do you need than social media? Go on TikTok, look up the hashtag. TikTok made me buy it and start scrolling through the tons of winning products that people are trying to sell on here. From here, you can start to look for things that actually provide some sort of value and actually wow you. Of course, you can't just choose anyone that you think is good. Click on one. Let's say this little egg peeler over here or egg mixer, whatever this is and start reading through all of the different comments. If they're positive, go with it. If they're very generic and people aren't saying that they need to buy it onto the next. Another option that you have to be able to look through different TikTok ads is the TikTok ad spy. So for this, you are going to need an account over at AutoDS. And if you don't currently have one you can sign up right now for the trial period for just one dollar. One dollar. So once you sign up for AutoDS and you're logged in, just go ahead and look for the TikTok spy which is right under the marketplace. Once we click on that, you're going to see all of the different ads that are running on TikTok promoting different products. So here you can actually set a bunch of different filters. So let's say how many likes it has. Typically, I like to go with something that has more than 50,000 likes. That means it's actually gaining some popularity but it hasn't reached peak yet. You can also filter by impressions, interaction rate, call to action buttons, the source. So whether it's organic paid advertising. And you can also search by keyword. So I've seen a slushie cup a lot lately. So let's look for that. Let's just go ahead and type in cup and let's see what there is. So there are already quite a few different ones. You have this water bottle here. You can see that this one has 1.8,000 likes and 86 comments. So this is probably on the rise. This might be one that you want to check out. Keep scrolling, you have this one right here which looks like a little knockoff of those Stanley cups that everyone loves right now. Trust me, I know everyone loves them because my wife has one and she's already planning on buying like three more. It's kind of my fault too though because every single time that she's using it I end up going up to her and asking her, hey babe, let me get a sip. Aside from that, we also have another knockoff similar to that one which is actually Halloween themed and Halloween is a month away. So this is something that you might want to start looking into. Even though it doesn't have a lot of interactions, again, Halloween is right around the corner. Now keep scrolling and as you can see there's actually a lot of those Stanley cups or knockoff Stanley cups. All right, so let's check out this one right here. This one actually looks similar to the Halloween one that we saw earlier and it has a pretty good interaction rate. 27,000 likes and 134 comments. Let's click on that. So as you can see, it's just a quick unboxing. So let's just go ahead and click on see TikTok ad and here you can see all of the analytics with it. So let's go ahead and play this really fast. Let's mute that sound so we can watch it while we analyze it. So we have the different impressions. It has over 700,000 views. 27,000 likes, 134 comments, 3.6 thousand shares and the interaction rate is actually really good. It's 4.35%. Now you also get some ad information, the description and you get the option to see the original post. Now aside from that, you also have the marketplace which has tons of products that have pretty quick shipping. Like look at this one right here. This one has two day shipping and you also have the winning product section which has proven best sellers that have a proven track record. So these have been selling in the past and are currently trending. Now while everyone says don't use Aliexpress or only use Aliexpress to start drop shipping, use it to test your different items, I agree. Aliexpress is great. Aliexpress has some pretty good shipping times if you know what you're looking for. But at the end of the day, Aliexpress is more than anything an awesome place to be able to test different products because of how many they actually have. Now one thing that people don't really mention about Aliexpress is the fact that they have a dropship center. Now this dropship center is somewhat similar to our winning product section over at Autodesk.com except it's not necessarily as detailed. But you can definitely use this to find out what's trending and what people are looking for on Aliexpress. So as you can see here, they also have a winning product section and they have a drop shipping price section where you're supposed to be able to find some cheaper products. Aside from that, if you scroll down a little bit you can see different products that are currently trending and they also have a star rating along with how many have been sold. Now once you find a narrow down product and you know what you're gonna sell then you need to figure out how you're gonna start marketing it. Now, everyone tells you to start marketing it either using Facebook ads or TikTok ads. And that's great. Facebook ads work, TikTok ads work. Depending on the product that you're selling or the demographic targeting you wanna go with either Facebook ads or TikTok ads. But another thing that you can do is you can also do organic marketing which is what a lot of people recommend especially if you're just starting out which in my opinion is fantastic. Organic marketing is one of the best ways that you can start marketing to start getting some sales. So when it comes to organic marketing there's a few different ways that you can do it. But ultimately what it is is pretty much just marketing your products for free. Primarily in the form of content on TikTok. Why? Because TikTok is the one place where you can post a video and it can just get a million views overnight for absolutely no reason. Now does that happen a lot? Yeah, it does. It happens more often than not but you have to be consistent. There's always a chance of your product going viral as long as you have a good video. Now when it does come to organic marketing unfortunately it's not sustainable. So think about it. You get one video that gets a million views. You get another video that gets 600,000 views. You get some pretty good sales from both of those different videos but then you keep posting and you keep posting and you keep posting. Some videos are gonna get 100,000. Some videos are gonna get 10 views. Some videos are gonna get 500,000. It's not gonna be consistent and you don't know what you're gonna be getting because you can't predict how well a video's gonna do. So just remember that. Organic marketing is great. I absolutely love it but it's not sustainable. You're not gonna be getting the same results each and every time. It's coming. Next up we have a topic that absolutely no one likes. Myself include and that's taxes. So another thing that you need to know before you start dropshipping is taxes. And taxes can get complicated but the good thing is that we have a few different resources and articles to help you be able to maneuver your way through taxes. And if you want access to that all you have to do is just go ahead and request the cheat sheet. But just quickly touching up on the subject when it comes to taxes pretty much any country that you dropship on is gonna have some form of taxes that you are gonna need to pay. You don't wanna land on any legal trouble so make sure you do your research and you get your taxes done. Each country, each region, each location is gonna have their own way of doing taxes or their own way of processing them or their own way of paying them. So again, do your due diligence, read up on taxes for the country that you're dropshipping on and get that done quickly. Because I'm gonna tell you one thing. The government regardless of the country that you're selling on does not mess with taxes. They want your tax money and they're gonna get it. So you better be ahead of them before they get behind your butt. Again, if you want more information on taxes just check out the cheat sheet. Now, one of the last things that I wanna cover when it comes to what you need to know before you start dropshipping is the customer service. So when it comes to customer service, remember one thing. For the most part, it's just gonna be you. So a lot of the times you're gonna be getting a lot of questions or a lot of concerns regarding a particular product or an order. At this point, this is when you need to drop everything that you're doing and make sure you reply back to your customers. Always try to reply back within at least 24 hours. If 24 hours pass and a potential customer reached out to you, then more than likely what's gonna happen is this customer is gonna find the product somewhere else or they're just gonna forget about the fact that they messaged you and you're gonna lose that sale. Now, if you have somebody that purchased an item from you and they have a question about their order then in that case, you also need to get back to them pretty quickly because if you don't, if you take too long, if you take maybe one or two days then they're not gonna be a satisfied customer and they're not gonna come back to your store. And while you did get one order from them you can potentially be missing out on many more. Now, what can you do to be able to help you with customer service especially if you start getting lots of sales? It's easy, just go on Fiverr and look up for a virtual assistant or a VA. Here, typically you can find virtual assistants for pretty cheap especially if they're in different countries and that's pretty much everything that you need to know before you get started dropshipping. Remember, if you want any of the information I mentioned here along with any of the different links that I talked about then just go ahead and comment down below, hashtag dropship now and let me know what your takeaway is from this video. Let me know what you learned and how you plan on implementing some of the stuff I talked about into your dropshipping store once you start. Huge thank you to everyone for watching especially if you made it all the way to the end it truly means a lot. As always, my name is Mario with AutoDS wishing you all nothing but success in your dropshipping business and catch you all next time.