 was going to get his welcome back to another video. So yesterday I put out a poll on my YouTube channel asking people what their thoughts were on drop shipping being a long-term business, whether it's viable or not for drop shipping to be a long-term business. And in brackets, I put two plus years. Now two years is not long term. If you're somebody similar to my age, you need a business that's going to make you money for the next 20 to 30 years. However, since then we've had 58 votes and as we can see 79% said yes and 21% said no. As somebody who's been drop shipping now since 2016, so going on seven years, in fact it'll be seven years next month on the 6th of July. That was when I made my very first sale, 6th of July 2016. It was £4.99 and it was for a turquoise animal bracelet. If you try to sell products that cheaply today, you'd never be able to do it unless you didn't have to pay for your traffic. But back then I was regularly consistently able to get purchases for in and around £3. What I'll do is I'll try and dig out some screenshots of my sales back then and exactly what that product is so you can see exactly how things stacked up or how things compared to what they are today. So as somebody who's been doing this for nearly seven years now, I thought it might make an interest in video topic to do and give you my take then on whether I think drop shipping can be a long-term business, a business that will continue to make you money for the foreseeable. For those people on a timeframe then if you want my one word answer, then that answer is yes. For those people who want a bit more contextual and background information to that, then I would say yes, but it probably doesn't look like what you think it does. So most people's perception of what a drop shipping business is as follows. It's an Aliexpress product that you're selling on a Shopify store and you're using some form of paid marketing to drive traffic to that store and sell that product. The products are in and around $20 to $40 and you're using recycled content. So content existing content on the internet, you are recycling that for your creative to sell your product. If that's what you're doing now and it's working, then brilliant. However, from my own personal experience, at some point you will probably fail and I will give you the reasons why in a second. So when you've got the traditional drop shipping business model that I've just explained set up, you might see some initial success, but at least from my own experience where the real money is made or where the consistent profits are made is when you take those steps from drop shipping and progress from that to building a less replicatable business or a more established business. And again, I'll give you the details on exactly what that is. So a better way to think of drop shipping is like a means to an end or a better way of explaining it is a means to testing and validating that your idea that your products that your business that your brand works before you invest bigger money into establishing that business into something that is bigger and better than everything else or anybody else out there. So once you validated that the idea works, ie you are consistently profitable and you have no reason for sales to dip off at any point, ie you're not selling a trending product that when in winter hits sales are going to go completely dead or vice versa when summer hits sales are going to be completely dead or there's something happening outside of your control, which means sales are going to dip off. If you can consistently sell a product profitably and your drop shipping using that very basic business model and it's working for you, then in my mind, that is when you then choose to move off from that traditional you choose to progress from that traditional model. And this is when you start to separate yourself from anyone else out there any competition out there and make your business less copy ball because let's think about it. If you're using that traditional business model that I've just explained overnight, I can build a business that is almost identical to yours and compete against you and be a very good competition because if you're using that basic business model that I explained earlier, then overnight I can build a business and compete with you. So can somebody who is 14 years old do that so somebody who is 20 years old that can do that your competition is pretty much endless because you haven't done anything that means somebody can't copy you haven't established yourself to a point that makes you more difficult to copy. And if I have more money than you then I will probably win and put you out of business. However, once you've validated that it works using that traditional business model using that traditional drop shipping business model and you move on from this. So you private label the product, i.e. you get your logo printed on the product, you have branded packaging so instead of it showing up in a clear plastic bag or a wrapper or unbrowned brown bag whatever it may be it has your logo on it and it's a different color whatever it may be basically is branded towards its original packaging for your business. You use a 3PL fulfillment warehouse or pick back and dispatch the items yourself. So 3PL is basically a fulfillment warehouse. It's somebody that you would ship all of your products into at the end of each day you'd send your order list to them they will pick pack and dispatch those orders direct to your customer so you still haven't got to see it still haven't got to touch it you're still effectively drop shipping but obviously to get to this point you're going to have to be committed to a bulk quantity of stock because you're not going to get somebody to manufacture an item and one off at a time and put your label on it will be way too expensive so this is going to drive down your unit costs it is cheaper to buy 500 units of something with your logo on than it is to buy one unit of something at a time without your logo on so it's going to make you more profitable which means you can be more aggressive when it comes to your marketing and also means you'll have more money to reinvest into your business on things like UGC content. UGC content is user generated content so it'll typically be an actor typically be an influencer it can be friends it can be family it can be yourself basically it is somebody on camera in some sort of selfie format holding up the phone works best because then it's more authentic and they're just talking about the products they're unboxing it they're demonstrating how it works they're talking about how it makes their life easier so on and so forth when you have all of these things in place so a private label product branded packaging 3pl so you can offer faster shipping bulk quantities of stock so you're more profitable UGC original UGC content unique to your brand then all of a sudden your business becomes a lot less easy to copy and it is a much bigger risk for anybody to try and take you on for anybody to try and compete with you why because it's a much bigger investment to make without knowing if it's going to work or not so for example if we go back to that traditional drop shipping business model where you're just using an AliExpress supplier AliExpress content recycled online content for me to compete with you is going to cost me a hundred dollars for me to compete with a private label product 3pl's original UGC content branded packaging for me to get that point is probably going to cost me a thousand dollars two thousand dollars I don't know about you but I'm much more willing to risk losing a hundred dollars than I am losing two thousand dollars and if you agree then you would also agree that the amount of people out there willing to risk a hundred dollars to test a product and compete with you is a lot more than the amount of people out there willing to risk a thousand dollars to test and compete with you so that means once you progress from that traditional drop shipping into private labeling so on and so forth you significantly reduce the amount of competition which only benefits your company more you're following on social media dominoes the more and more you build that up the more followers you get the more likes you get the more loyal customers you get the more organic traffic you'll get to the site the more grand organic orders you'll get to your site and therefore the more profitable you will be if we could all get a million visits to our website for free every single month we would all be multi multi millionaires one of probably the biggest expense in fact starting out will be your marketing costs and that is because without running ads you will not get any traffic to your website unless of course you use other means like SEO influencer marketing whatever it is basically though you'll have to pay for it if you didn't have to pay for marketing it'll be a whole lot easier so this is one of the massive advantages to doubling down and building a private label brand is that over time your following on social media will domino and continue to increase week by week month by month so on number two is your email list builds i cannot tell you the value of a good email list it can make up as much as 25 percent of your sales every single month if you know what you're doing with email marketing so think about this if you're making 100 grand a month and you're not running emails you can instantly add an extra 25 grand a month with a solid email marketing strategy plus the advantage to using emails is that it is cheap cheap cheap conversions it's cheap acquisitions or not acquisitions that's the wrong word because you've already acquired them but it's cheap purchases because you're not paying to get those people back on your store it's free to send an email well it's not free because obviously you pay your esp however you might be looking at somewhere between one and five hundred dollars a month depending on how many contacts you have when you compare that to the potential of making an extra 25 grand a month basically what i'm trying to say is the cost of the esp is multi in the hundreds multiples in the hundreds outweighs the cost of it in terms of what it can return you the next massive massive massive advantage as well to continuing with the brand continuing with the same target audience is at least on facebook anyway is your pixel matures and becomes more efficient the hardest hardest thing you will have to overcome the hardest hurdle you have to overcome is finding that first initial winning product and that is because facebook has zero idea who wants to buy that product initially with every click with every purchase with every action with every visit facebook starts to learn who is interacting with your business who likes your business who buys your products and the more of that that goes through your pixel the more facebook learns and the more efficient it can be at delivering your ads to the right people so once you've found that one winning product that works really well finding the next one is going to be a whole lot easier because you already have this previous amount of data to draw upon for experience i have seen it time and time again where somebody might get to the fourth or fifth product that they've tested it becomes a winner and then they go back to those initial ones that they tested that weren't successful but because they now have that seasoned and matured pixel the previous products they test have now become winners as well because it's the same audience facebook knows who they are they start to see those results from the beginning and it starts to work lastly a massive massive massive positive as well about building a real brand that gets you consistent results in the long term is that you are building an asset an assets that will run without you and what that means is it's a saleable asset it's an investment that people are willing to make so you have an exit strategy you can sell your business you can sell your brand for a cash sum you typically value a business somewhere between sort of maybe two and three maybe two and four what the annual profit is what the annual gross profit is so for a bit for a business that makes 50 grand profit per year you could probably sell that business somewhere between sort of a hundred and two hundred thousand dollars and that's a nice cash lump sum straight into your bank account that you can use to fund future ventures whether that's other dropshipping businesses whether it's property whatever it may be it's a nice cash lump sum you have now to give you some freedom to pursue other things in summary before i wrap this up is that dropshipping is a brilliant brilliant business model everybody should start with dropshipping however if you've been doing it for a few months and you're kind of borderline break even and you're not really sure whether you're going to make this work consistently firing to the future then consider doubling down by private labeling your product the least profitable you will be is when you are dropshipping one unit at a time from a supplier if you do things correctly after that not only will you acquire more customers but your business will be more profitable as well this also significantly makes it a lot easier to be more consistent and know where your sales are coming in before you should ever consider leaving your job to do this full time even on the bad weeks even on the bad months you should be clearing well in excess of the amount of money that you need to be taking home in order to clear all your bills all of your responsibilities all of your commitments and so i'm going to wrap it up there guys otherwise i could probably talk on and on on probably for hours on this subject any questions at all aren't any of this make sure you make the most of it like i said at the beginning we don't get many comments on my channel i do read every single one so if there's something you're stuck on or something you need advice on make the most of me leave it down below i will read it i read every single comment so i will get back to you thanks for watching guys i'll see you on the next video on friday cheers