 What's going on guys, welcome to a new video. So in this one then we're gonna be going through five different things you need to be doing before you actually start drop shipping. We're gonna be covering the kind of topics you don't really hear many people talking about such as whether you need to set up a new company or not and the different taxes and kind of financial things behind a drop shipping business. I feel like, or certainly a lot of people I talk to on Instagram because drop shipping is pretty much one of the easiest businesses you can start. If you know what you're doing, like within the space of two to three hours you can have a Shopify store created, you can have products on that store and you can be running Facebook ads to sell those products. So a lot of people jump into drop shipping trying to make some money really quickly but they don't kind of take care of the fundamentals or the kind of natural things that come to mind that you actually need to be doing before you actually start drop shipping. And by avoiding these things then at some point later on down the road we're gonna come across some problems, some headaches that are gonna end up costing you some money and some time. So before we jump into it I just wanna quickly say that I do read every single comment. So if there is a question you wanna ask me feel free, make sure you post it down below. I will read it and I will answer it. And of course, if you enjoyed the video please do make sure you let me know by hitting that like button. And finally my aim in 2020 actually on my YouTube channel is to upload four videos every single week. So if you do want regular consistent content on this sort of stuff, just make sure you hit that subscribe button too. So that being said then let's jump into point number one which is setting up a company slash a separate bank account. One of the most common questions I get asked is do I need to set up a limited company? Do I need to be a sole trader? What do I need to do? So what I recommend then in the beginning is when you're getting started is at the very minimum at least set up a separate bank account just for accounting reasons just to kind of keep your personal finances separated to your company or to your business. And then depending on your own personal circumstances will depend on whether you need to set up a limited business. And the reason for this then is pretty much tax so financial reasons. If you don't set up a company depending on what your circumstances are the number one is you may end up paying too much taxed. So to give you an example then if we have a look at this image here the top one these are the different taxable branded incomes for the UK whilst I'm recording this video. So these are accurate today. The basic rate so let's say for example you're earning 25 grand a year which is the average wage in the UK you would be in this basic rate here you'd get 12 and a half grand completely tax free and then anything between 12 and a half grand and 50 grand you would pay 20% on. So let's say you're earning 25 grand a year you start a drop shipping business and that drop shipping business makes 50 grand. What would happen if you wasn't set up as a limited company you were running as a sole trader then essentially what would happen is that 50 grand profit you make from your drop shipping business the first 25 grand of that you would pay 25 you would pay 20% sorry because you've already got your previous 25 grand from your job. And then the next 25 grand would be in this higher rate which you'd pay 40% on. So you'd pay 25 grand at 20% 25 grand at 40% which probably roughly averages out about 30% overall. Whereas if you separated yourself from the limited company and registered as a limited company corporation tax as according to the screenshot here it's just a flat 19%. So instead of paying 30% on that 50 grand you would only pay 19%. Plus there's tons of other benefits through having a different company. So for example you can put some expenses through your business like wifi different kind of accessories for your office or whatever it is there's just so many different kind of other ways in which you can put things through your business as an expense. The second reason then which is the main reason why all businesses I start I will set up as a limited company from day one with a separate business bank account is because it protects any assets that you personally own. So essentially what that means then is that when you create a limited company that becomes a separate financial entity if that's the right word to yourself. So what that means then is if you're running as a sole trader and for whatever reason you get sued or you become liable for a payment of let's say 200,000 pounds if you don't have the cash or other means to pay that and you have a mortgage that your wife and kids are living in that house that has a mortgage on it then essentially that house can potentially be at risk for footing the bill for that payment. Whereas if you set up your job shipping business through a limited company it's a separate entity a separate financial entity to yourself. So if it then becomes liable for that 200 grand payment for whatever reason then essentially your personal assets are protected. And because I own a few different properties then that is the main specific reason why I set everything up from the beginning in a separate limited company. The third and final point then which is just straightforward is it makes accounting so much easier. Trust me, take from me. It was the biggest mistake I made in the beginning. I ran my job shipping business from my personal bank account and basically what I did when it started to make some decent money and I knew this was gonna be a long term thing I registered it as a limited bank as a limited business and then I had to back date everything from my own personal accounts and their headaches, their hours it was an absolutely just awful job of having to do, of literally go through every single transaction in my personal bank account. So I'd have AliExpress, Facebook, AliExpress, AliExpress, AliExpress and it would just be random ones like fuel or some sort of restaurant or electricity bill that just weren't relevant to my business so it just took hours and hours. So to avoid that and make it easier to kind of keep track of whether you're actually making money or not I just before you do anything just make sure you set up a separate bank account. So my advice then to kind of summarize these points is number one, speak to an accountant. They will within a space of a few minutes they'll ask you a couple of questions and then they'll be able to give you a definite answer of what the most tax and financially efficient thing is to do for you. Everything is gonna be personal to your current circumstances and then number two is just have a separate bank account from day one. This will also make budgeting so much easier if you just keep putting more and more money into your business from your personal account it'll be difficult to keep track of how much money you've actually spent whereas if you have a separate bank account and your staff will say a thousand pounds then it's quite clear in terms of budgeting it's just a whole lot easier. So yeah, at the very minimum then make sure you set up a separate bank account. Moving on to point number two then this is a biggie as well. There's a few different kind of life hacks you can do to make the most of the money you're spending and one of those ways then is to have a rewards credit card for order fulfillment and Facebook ad costs because these are two kind of direct costs of your business that you won't be able to avoid spending then you might as well get something back for that money that you're spending. Now before getting to this one very quick warning I just wanna say is be responsible with your spending if you're not very good at financially planning and sticking if you just basically get carried away and as soon as you get credit card you're gonna go out and buy loads of crazy things and don't do this but if you're sensible enough to discipline yourself and spending your money wisely then you can get some pretty good bonuses back for the money you spent. So for an example then these are what these screenshots are relevant to if I just show you my British Airways account you can see that I've got 50,000 Avios points I can just refresh that very quickly too so you can see it's legit. And Avios points essentially what they are is when I spend money on my Mastercard or Amex my American Express card I get Avios points. Every single pound I spend I'll get at least one Avios back and then with these Avios points I can use them for certain perks. One of those perks for example is plane flights. So to give you an example then of how much money I can save then this is an example flight. So one way London to Los Angeles Friday the 17th of Jan 2020 so this is in a few days time. If I was to take the 1040 flight and fly premium economy economy it's gonna cost me 32,500 Avios which you've seen I have plus 340 pounds. Now if I was going to book that flight and pay for absolutely everything in cash for the exact same flight so London to LAX in Los Angeles 1040 flight premium economy I can't say that word today it's gonna cost me 2,621 pounds. So as you can see I'm saving over two grand simply by paying for my Facebook ad costs and my order fulfillment using a certain credit card. And then to kind of summarize another reason and why you could have a credit card or why it's beneficial. Again another common question I get is that people will start a drop shipping business and they won't have the money to pay for order fulfillment. So they'll have to wait for that payout from Shopify or Stripe or whoever they're using which can sometimes take a week so it's a week on top of drop shipping delivery times which is not a good thing. So by having a credit card you can make sure you fulfill the orders the same day and which in return is gonna be faster order processing, faster delivery times which in return is gonna be less refunds and complaints from customers. Moving on to point number three then we have increased professionalism of your store. So basically increase how trustworthy your store comes across. As a new business the number one thing that's gonna stop somebody from spending their money with you is whether they trust you or not to hand over their credit card details to hand over their PayPal details to hand over their money. So make sure that your store is really professional and more professional and trustworthy than the next one. Then you have the best chance of converting that customer. Less than 1% of all the Shopify stores I've ever looked at have the following three things which in my eyes any decent and creditable business should have these things. Number one is an email address to match the domain. So for example if your website is called bluecrate.com you should have an email address that is sales at bluecrate.com or info at bluecrate.com. It should match because it's professional. Number two is a contact telephone number. Again something that in my mind should just always be included. People want to know they can ring somebody and sort out a problem if they have one. Now if you're scared or you don't want customers ringing your personal phone and you don't want to talk to customers it's fine I'm gonna show your work around in a second. Number three again is a business address. People want to know that you're a legitimate business with a physical address. Again so they can contact you or get hold of you if they need to. So it's given you example then this screenshot here it's not just a random office building. This is where some of my stores were registered with a, it's called a virtual office. So if anybody ever Googled my address this is what they would see. It would look so much more professional than just a random street address and a picture of your house or God knows what address. Some addresses honestly that I've seen people give their customers and they just have just fake addresses basically and it's just not a good idea. So the cost of these then number one an email address to match your domain is gonna cost you three pounds per month per email and that is where the G Suite account I use it for all of my accounts and it lets you use a custom domain for your email address. Number two a contact telephone number is gonna on roughly it's gonna well basically there's two ways in which you can pay for this. Number one is approximately 20 pound per month which gets you unlimited calls or you can pay one pound per call and you can use a website called takemycalls.co.uk Basically what this does is it's an answer in phone service for you so you don't actually have to directly speak to your customers. They will take the information from your customer take the question and the query and then pass it on to you so you can then respond to them however you decide to. Number three a business address you can go with real amount and get a PO box this is gonna cost you the cheapest option is 26 pounds 25 per month or you can get a virtual office which is what I do which is approximately 30 pounds per month. Now all three of these things I would say they're optional in the beginning but they will help your business they will help your conversion rate so if you've got a decent budget to play with then I recommend getting all three of these things. Why like I mentioned in the intro to this point is that it increases the trustworthiness of your store and this is the number one factor of why customers will not buy from you. If they don't trust you there's no chance in hell they're gonna spend money with you. Moving on to point number four then which is build social proof of pages and posts. So if you're advertising on a social media platform then social proof is absolutely everything. If you have zero engagements, zero likes, zero views, zero comments, et cetera again you don't come across as trustworthy and as I've already mentioned trustworthiness is like the number one factor of whether people will decide to spend their money with you. If you can't get over that barrier of people trusting you there's no way in hell you're gonna be successful it's just a fact. So how do you actually fix this then? Number one is you can run page like campaigns you can get some pretty decent results for quite cheap. As you can see here this is like a screenshot from my ad manager account you can see that a cost per engagement is gonna cost you about two pence depending on what kind of campaign you're running. In terms of page likes then you're looking at about 10 pence per page like so if you can dedicate say 50 pounds to that if I've done my maths correctly then that's 500 page likes so you don't have to spend that much money to increase your social proof quite dramatically. Number two is you can run post engagement campaigns again these are specific campaigns you can run and you can go really broad on the audience here because it doesn't matter who likes it essentially all people care about when they see your ad is how many people have engaged how many people have commented it doesn't really matter who it is plus the broader you go the cheaper results you're gonna get. Number three this is kind of like a way of compounding the engagement on your ads so just make sure that you run ads to the same posts on your page make sure you use the same post ID that way all the engagement is gonna compound onto that one post and it's gonna build up faster essentially. So make sure then that you don't try and compound the engagement onto one ad that's a poor ad that's never gonna perform very well in the beginning then what I recommend doing is testing multiple creatives in the beginning and then the one that performs the best then start to compound all your engagement onto that one ad creative. And then number four finally is regular posting on pages for example then if your last post on Facebook was nine months ago and it's you changing your cover photo when somebody comes onto your page and that's what they see you don't come across as very active or very current so people might start to doubt whether you're still in business and again they won't trust you it all comes down to trustworthiness. Let's give you an example then here's like a quick study I found online of the different reasons of what makes people trust you versus not trusting you. The biggest thing was customer reviews it goes without saying it's a fact by the way that people follow people so if the more reviews and more engagement you have then basically then the better. Number two is easy to contact the company which we've already spoken about. Number three is secure browsing so it says there in brackets the presence of HTTPS with Shopify then you'll automatically have that. Number four is a clean website design layout and navigation and number five is accurate and up-to-date content so just make sure you post regular content every single day and it's gonna be beneficial. To give you another example as well is these two ads here again screenshots from certain ads I found on Facebook and therefore the exactly the same product except this one here at the bottom has 10,000 comments and 43,000 reactions and this one here has three as you can see if I could just move this out of the way this one only has three. So if somebody sees this bottom one versus the top one which one are they gonna trust more and actually buy through? It's gonna be this one here because it has significantly more engagement and comes across as more trustworthy. Moving on to the fifth and final point then which is keep things simple in the beginning. So this is quite a big and important one to be honest the amount of people I talk to on Instagram beginners and they just try and do the most complex and ridiculous things like they try and run before they can walk and they're just setting themselves up for failure. It's like before you learn to ride a bike you wouldn't try and learn to ride a motorbike it just wouldn't make sense it's like it's a bike with an engine you'd start with a normal push bike that you pedal and then you progress onto a motorbike you wouldn't just go straight to a motorbike it's kind of like a metaphor that just comes to my head I don't know whether it really makes sense but what I'm trying to say then is just keep things simple in the beginning don't over complicate it give yourself the best chance of success by keeping things simple and avoiding the following so here's just kind of like a few general tips to make sure you run the right path so things to avoid the number one is dangerous, fake, consumable or trademarked products all of these will either get held up at customs and will never get into the country you're shipping to or they'll end up with you getting your Facebook ad account banned your Shopify store banned your payment provided banned and you'll fail before you've even started number two is complex store design I've seen people with bright pink backgrounds or black backgrounds or yellow backgrounds and white fonts and it's just difficult to read it's off-putting just stick to the basics a white background, black test a serif or sans serif font and that's gonna put you in good stead we saw in the previous point in this study that one of the biggest reasons that puts people off by not trusting you was where is it clean website design layout and navigation so just make sure you stick to the basics get some feedback on your store and make sure it looks professional number three is selling globally in the beginning there's no need to try and target the whole world stick to one country at a time even today I still focus on the UK when I'm testing a new product if I can sell a product well and profitably in the UK only then will I start to scare that into bigger countries different markets will react to different products in a different way so if you try and take on the whole world all in one go then it's gonna be really difficult to find something that sticks and something that does well so focus on one country at a time then to give yourself the best chance and success number four is copying content the amount of people I see that copy content from other job shipping stores other Facebook pages especially products product images with models then now if the Asian models from AliExpress then you might get away with it because it's probably supplier content make sure you always check by the way but if you go into Instagram and find some influencer and take content from their page then again it's gonna end up with you receiving complaints it's gonna end up with Facebook getting in contact with you and putting a strike against your account it's gonna end up maybe even with your ad account getting banned there and then or perhaps your company or you even getting sued so just produce your own content buy the product as a sample so you can test it yourself make sure it's decent quality and take your own pictures or videos or whatever you wanna do with it and with that being said guys there's one more thing to do and that is to say thank you very much for watching I really do appreciate everybody who watches these videos by the way it's still crazy to think that I've got over 10,000 subscribers on my channel so thanks very much if you enjoyed the video please do make sure you hit the like button I've said it in the intro but if there is a question you wanna ask me I read every single comment it might take me a couple of days to be honest to get back to you but I will read it I will answer it and if you want more content then on Shopify and Facebook ads off of YouTube, hence Instagram and then head over that's my username go over there follow me check out my free e-box too in the description below there's five different ones people I've had some really good feedback on them as well actually so make sure you check them out 100% free won't cost you any money and then finally if you want like a proven step-by-step program that includes my full support and then you can check out my e-com academy too again there will be a link in the video description below finally then thanks again for watching and I'll see you in the next one