 Dropshipping can be an extremely lucrative business model, but sometimes it's made out to be a lot easier than it actually is. In this video, we're going to be talking about some of the hard truths about dropshipping that other gurus don't tell you about. So without wasting any time, let's just go ahead and get straight into it. Let's go ahead and talk about the hard truths about dropshipping. Let's go ahead and run that intro, and let's get started. What's going on, everyone? Mario here with AutoDS. And if you like informative videos on the dropshipping business and pretty much anything related to dropshipping, then make sure you hit that subscribe button as well as ring that little bell notification so you don't miss out on any future videos. As always, to go along with this video, we have the ever popular cheat sheet. If you want access to that, all you have to do is go ahead and comment down below, hashtag hard truths along with your takeaway from this video. And once I see that you commented, I'll go ahead and reply back with the link. Now, even though we're discussing hard truths, remember that we make it easy for you with all of the different resources we have available at pretty much your fingertips. So for one, we have our blog section over at AutoDS.com. And there we have tons of different articles on all of the different topics based around dropshipping from tips and tricks and some of the best strategies to some of the hottest products to sell. You can find it all there. Another awesome resource that we have available is this YouTube channel. You can simply go over to the playlist section and see all of our different videos categorized on there. Okay, so let's go ahead and get into it. And the first thing that people don't really talk about are profits. Well, they do, but they don't always give you the full picture. So when it comes to profits, you have gross and you have net profits. A lot of the times what people are showing you are the gross profits. What you really have to focus on are the net profits. Well, what exactly is the difference? Simply put, gross profits are the entire sum of all of your sales without subtracting your cost of goods or any other services that you're paying for. So for example, if you're selling this squeegee and you sell 10 of them for $5, you have a gross profit of $50. Now with net profits, you're actually subtracting the costs of your goods. So let's say this same squeegee costs me $2 to make. And I'm selling it for $5. So when I sell 10 of them, it's going to equal out to $50. But then we need to factor in the cost of goods or how much it's costing us to make this. Now, assuming that it does cost $2 to make one of these, then that's going to make our production cost for 10 of them $20. Now $50 minus $20 is going to equal out to $30. So our net profit will be $30. Net profit is the number that you need to focus on. That's going to be the number that tells you whether or not you're actually being profitable and making some money or if you're losing money. Let's say that instead of $2 to make this, it actually costs us $6. And we're selling it for $5. Obviously that's not going to be the case, but just as an example, that means if we sell 10 of them, we're going to make $50 gross profit. But when it comes to the net profit, we're actually going to be negative $10. Since it would be costing $6 per product, six times 10 is going to equal out to $60 in production costs. So we're not going to be making net profit. It's actually going to be considered a net loss because we're going to be negative $10. Now, I know in this example for the squeegee, I did mention production costs, but that's not necessarily the case. It doesn't have to be an actual production cost. All it is is really how much it's costing you to come up with the item. So how much does it cost to make it or how much does it cost to purchase from our suppliers? Now, that being said, that's just one part of all of the expenses that you need to factor in a few of the things that you always have to think about are going to be fees. So you have things like selling fees, channel fees, transaction fees, marketing fees. So whatever you pay for things like Facebook ads and whatever else you're paying for to pretty much keep your store up and running, you know, whatever you pay monthly for Shopify or for Wix, maybe your domain, whatever you pay to keep your domain open. These are all different types of fees and costs that ultimately do need to be factored into your gross profits. Now, as a general rule of thumb, you can safely assume that your net profit is going to be about 15 to 20 percent of whatever your gross profit is going to be. Now, another thing that I've noticed a lot of people talk about that they don't really go too deep into or they don't give you much detail on is the type of store that you're going to be opening. Do you want to open up a general store or do you want to open up a niche store? Now, if you decide to go with a general store, then you're going to be selling pretty much all different kinds of items. You can be selling things from kids toys to bedroom furniture. If you open up a general store, that means you're going to have a store that really encompasses pretty much every niche. Now, if you decide to go into a niche store or then you're going to be focused on a particular niche. So are you going to be selling kids toys or are you going to be selling bedroom furniture? Maybe you're going to be selling certain articles of clothing for a certain demographic. Ultimately, that's going to be up to you and whatever niche you decide to go with. Now, if you're still debating about opening your drop shipping store and you don't know if you want to go with either a general store or a niche store, then here's a quick tip for you. Start with a general store and have different products pages on there. From there, see which items are selling best for you, which ones you're working with best. And from there, then you can start to decide whether you want to niche down or if you want to keep going at a general store. Really, a general store is going to help you test different products, different niches, and it's also going to help you interact differently with different suppliers, because in a general store, you're typically going to be using multiple suppliers. So from there, you can also start to see which one of these suppliers is best and which ones you want to stick with. Now talking about products, the next hard truth that we're going to talk about is product research is number one. You can't just go ahead and sell any product because it's not going to work. For one, you want to make sure that the products that you're offering have a wow factor. And not only that, you also want to make sure that they bring value to your customers. Unfortunately, this is something that takes time. While there are tons of different resources out there that you can use, ultimately, it's going to be up to you to find the product that works best for you and that works best for your store. Now, product research can take quite some time. It can take a few hours, if not a few days, to find the right products for you to sell. As I mentioned earlier, there's tons of different resources with different types of product suggestions that you can start to test out. For one, you can check out the AutoDS Marketplace. Now, from here, you have tons of different products that you can choose from. And best of all, you have multiple suppliers. So check this out here. We're at our platform over at platform.AutoDS.com. Now we're under the Marketplace tab. Once we're in here, there's a little section labeled supplier. Click on that and you can choose from three different ones. We have Amazon, AliExpress and AutoDS. Let's go ahead and choose AutoDS really quick. Then you can scroll down and you can find tons of different products that you can choose from. Now, let me show you an extra feature on here. So if you see down here, this particular item is actually shipping from the AutoDS Warehouse. That means that your customer is going to get their product fairly quick. In this case, it's going to take between nine to 12 business days. And that's not nine to 12 business days to ship the product. This is nine to 12 business days from the time that your customer places the product to the time that they're going to be receiving it in their hands. That's pretty quick shipping, to be honest with you. Now aside from that, there's another really cool feature here, especially if you have a niche store. So if you have your own logo or if you're trying to build up your own brand, you're able to brand these products with your branding. All you have to do is look for the items that show branding logo. Now, the way this works currently is fairly simple. Once your customer places the order for that product and you have your logo already uploaded to your store, then the item is going to ship to your customer with a custom thank you card with your logo on it. So as you can see here, there's a custom AutoDS thank you card. Obviously, in your case, it's going to be your logo rather than the AutoDS logo. Now, you can also see a couple of bags around it with the AutoDS logo. Just take that as a sneak peek for what's to come. Now, aside from that, we also have the winning products hub, which on here you have tons of different items that are proven to sell and have been trending in the past. On top of that, if you click into any of these items that are under the winning products tab, then you're going to have tons of insights from AutoDS to help you market and sell these items. So for example, here we have the item cost, which is about $10. And you can see that it's currently being sold for if we just scroll down a little bit for $54.39. That gives you a potential profit of $29.72. That's actually a pretty good profit. So next to that tab, you also have a target audience tab. These are suggestions for audiences to target when you're advertising on Facebook. So in this case, it's geared towards males between the ages of 18 and 50 who are single and married that have interests in motorcycles. And to take it a step further, you can also add an occupation, which in this case would be office worker or motorcyclist. Now, once again, these are just suggestions. You can change it by adding in different interests or different occupations, maybe a different age range. Really, you can customize it however you'd like to target whatever demographic you'd prefer. Now, on top of that, there's also some more information. So from one, you have an example Facebook ad. So that way you can see more or less how you can structure yours and you have some more AutoDS insights along with the link to an actual website that's selling this particular item, just like this one right here, this hot sale, cool, half helmet. Now, another option that you have is the Aliexpress dropship center. The Aliexpress dropship center is somewhat similar to our marketplace, except in this case, you're going to have the amount of units that have been sold along with a star rating. All of these different items have actually been proven to sell. These have been trending up until now. Now, speaking about Aliexpress, that's another hard truth that we need to get into. Everyone talks about sourcing items from Aliexpress, but I'm here to tell you that that's not necessarily the best option. Aliexpress is fantastic for testing products. They're great so that way you can get your hands on a product, test it out, see how it does and see how it sells. But unfortunately, Aliexpress actually has some pretty slow shipping times compared to other suppliers. Also, communication sometimes can be a bit wonky. A lot of the times it's a bit frustrating to be able to communicate with some of these sellers. Ultimately, though, when it comes to Aliexpress, you do want to use them mainly to be able to test different products to see how they sell. Once you find a winning product and something that works for you, then you can start looking for a few other suppliers. You can check either the AutoDS warehouse. You can head over to platform.autoDS.com or you can check other suppliers such as CJ dropshipping, DHK, Wayfair or one of our other many supported suppliers. Now, aside from that, you can also check out seller recommendations. So if you aren't a seller's page over at, let's say, CJ dropshipping, all you have to do is just go ahead and scroll down. Keep scrolling, keep scrolling, keep scrolling until eventually you hit this section where it says recommended products. These are products that are either recommended from the supplier or from CJ dropship. Typically, these do have a proven track record and have had some sales in the past. Now, I did say it before, but I do want to put some emphasis on this. Even though you have all of these different resources at your fingertips to be able to find some great products, it's up to you to test them and see which one of those actually sell best for you. See which one works best in your store and which one you actually like the most. Now, the last thing I want to cover when it comes to the hard truths about products is the fact that not every product is going to sell. No matter how much research you do, there's going to be times where you spend maybe one or two days researching a certain product. And then when it comes time to import it to your store and try to start getting some sales, it's just not going to sell. It's going to happen. Just remember, don't get discouraged. Start doing some more product research and move on to the next product. Just make sure that you keep going and you stay on that never give up hustle mindset. Now, the next hard truth is actually one that I personally had to learn the hard way and that's organic traffic isn't going to last forever. Now, what I'm referring to are things like take talk videos or Instagram reels that tend to go viral and just bring in tons of sales at once. That's not really sustainable. Eventually, the video is going to die down. People are going to stop watching it and sales that are going to your store from that video are going to cease. Now, I'm not saying don't make these videos because doing this is actually probably one of the best ways to be able to get your name or your brand or your product out there in front of the eyes of new customers without really having to spend much money. But just always keep in mind that the hype for that video is eventually going to die down. Now, how can you combat this? Well, it's pretty easy. Just keep making more videos. Hopefully, a few of them will catch on and also go viral. But always remember, not every single video is going to go viral. Some videos might only get one or 200 views even though you put in tons of work into it. That's just how it is. Just got to keep going making more videos. On that note, I also know that making these videos can be pretty time consuming. Sometimes it can take anywhere between one to maybe even three hours to make a 15 second to a one minute long video. Now, when that's the case and if you find yourself spending way too much time making these organic videos, then you can start to look into things like paid advertising. For paid advertising, there's quite a few different ways to go about it. You can either look into TikTok ads or Facebook ads, maybe influencer marketing. There's a lot of different ways that you can go into paid advertising. And if you want more information on that, then just make sure you check out the cheat sheet because I'm going to have all the details in there. Remember that if you want access to that, all you have to do is go ahead and comment down below hashtag hard truths along with your takeaway from the video. The next truth that we're going to cover is order fulfillment. When you first get your first order, you feel absolutely amazing. You feel like you can conquer the world and you're going to become a millionaire dropshipping. But the truth about this is the fact that if you get one order, that's awesome. You can manually fulfill it and you can get it done fairly quick. But once you start getting more orders, you start getting maybe 10, 15, 20, then it's going to get extremely time consuming to go to each and every one of your suppliers and place an individual order for each individual customer. In this case, it's best to use either automatic ordering or something like fulfilled by Autodesk to be able to help you fulfill all of these different orders at once. So when it comes to automatic ordering, what ends up happening is whenever you receive an order from your customer, then Autodesk is going to go ahead and log into your supplier's website using your credentials. And then it's going to make the purchase on your behalf using your banking or your credit card details. Once that's done and the order is shipped, then Autodesk is going to go ahead and take that tracking number and update your customer with it. Now, the other option is fulfilled by Autodesk. This one is probably one of the better options to go with, mainly because it can help with things like account suspensions or account restrictions. Now, with fulfilled by Autodesk, instead of logging into the suppliers using your credentials and making the purchase with your banking or credit card details, Autodesk is going to log in using its own credentials and to pay for the item, it's just going to use a balance that you top up. So you don't even need to have accounts with CJ dropshipping or AliExpress to be able to use fulfilled by Autodesk to make those purchases. This next truth is pretty crucial, especially when it comes to legal terms. And I'm talking about the truth about taxes. So when it comes to taxes, you really have to check the local laws to where you're going to be dropshipping to make sure that you're up to date with everything that you need to be. So most countries that you decide to dropship in are going to have some sort of tax laws and you're going to have to pay some sort of taxes. So whenever you're setting up your dropshipping store, always make sure to check the local laws and the local tax laws. Just to make sure that you don't get in any hot water or any legal trouble. Now, I can't really say too much about taxes because this is just too broad of a topic. But if you want any more information, just go ahead and check out the cheat sheet. I'm going to have a link to a relevant article in there. Now, the last but certainly not least hard truth that we need to cover is the truth about customer service. So we all know customer service is absolutely crucial to anybody's dropshipping business. If a customer reaches out to you to get some information about a certain product and you don't get back to them within a certain timeframe, typically within 24 hours, more than likely they're going to go to the next dropshipping store and place their order through there. Or at the very least, they're going to go to the next dropshipping store and contact them about the item. And if they reply back to them within time, then they'll place the order. Now, a couple of things about customer service. For one, not all customers are going to be happy customers. And that's just a fact. That's just how it is. That's just part of the business. Just always make sure that you respond to them and you reply back to them in a professional and courteous manner. If they have any issues, make sure to address that issue within a certain timeframe again, about 24 hours. Now, one big thing I want to mention about customer service is you could potentially get overwhelmed. And the reason I say it is because let's say you have a TikTok video that goes viral and gets, I don't know, a few hundred thousand views. If from those few hundred thousand views, you start getting some pretty good sales, then you might potentially be overwhelmed with the amount of sales or the amount of customer service requests. You can either be getting a lot of questions regarding an item or you can be getting some people that are requesting a refund or maybe an exchange or just people asking, where's my item? In this case, there's actually a pretty simple fix to this. You can hire a virtual assistant. Now, the awesome thing about using a platform like AutoDS is the fact that you can hire a virtual assistant and you can grant them certain rights. You don't have to grant them access to your entire store. You have the option to grant them only access to what they need. So right now I'm actually in the settings page of my platform over at platform.audios.com. From here, all I have to do is click on users. Now, once I'm under the users tab, all I have to do is click on add a user. Then all we need to do is just fill out everything we need. So you can add their name, their email, their password that you would like for them to start off with. And then you can give them access to whatever you need. So you can either give them access to all of your stores if you have more than one or you can give them access to only a select number of stores. Then you can select the different privileges you would like them to have access to. Now, even though dropshipping isn't as easy as some people may get out to be, it is a fairly simple business model to get into. All it really takes is patience, research and dedication. Remember that if you want everything that I covered in this video in a quick and easy to reference cheat sheet, all you have to do is go ahead and comment below hashtag hard truth, along with your takeaway from this video to get access. Once again, my name is Mario with auto DS, wishing you all nothing but success in your dropshipping business. And if you haven't done so already, just make sure to hit that subscribe button. And if you found this video informational and if you liked it, make sure to leave a like. Thank you all so much for being here today and I'll catch you on the next one.