 What's up guys? Welcome to a new video. So in this one I want to discuss the topic of how much money you actually need to get started in dropshipping and give it a proper go So there's a lot of numbers floating around especially in different Facebook groups like $200, but in this video I want to actually well number one show you inside my ad manager account from when I first started so you can see exactly How much money I spent and how much money it returned me because it really is difficult to give you a bang on number That's going to suit everyone because ultimately it will come down to how successful your marketing campaigns are So for example when you first get started the furry first kind of campaign you invest in might be a hundred dollar Instagram influencer and that might return you a thousand dollars in revenue in which case that's going to set you up to start Pretty much and go in any direction you want however You may choose to start with Facebook ads and it might take you a thousand dollars before you get enough data through your AdSets before you start to realize what audiences are working until you start to scale things and actually see a profit come back in So in this video then I'm going to show you inside my ad manager account show you how much money I invested when I first started and then I'm going to give you a ballpark number and just discuss the strategy behind How I would go about spending that money But before jump into it then I just want to quickly mention a couple of things actually number one is a massive Thank you to you guys and everybody who watches these videos and engages with them and watches them to the end Recently I hit over 6,000 subs and it's all thanks to you and the support. So thank you very much I really do appreciate it and please please please do keep it coming if you haven't subscribed yet Then please do make sure you do and number two then in every video as always I am giving away a free one-to-one consultation call with me So if that's something you might want to win just a chance to talk to me one-to-one And ask me any questions you might have then all you simply have to do to enter the draw is Like the video and leave a comment down below and if you commented on my previous video Just make sure you stay tuned to the end of this one where the winner will be announced and with that being said then guys Let's get straight into it. Hey, what's up guys? Here we are my ad manager account then so this is like the very first month I started advertising in fact, I think there was one day in June. So I'll just show you June quickly So here we go, there's not one single day I spent like five pounds my very first day So the first proper month was July 2016 That's where I'm going to start this video from and you can see then total spend was 391 pounds for a return of 455 pounds so With the 1.16 row ass as well as you can imagine I wasn't profitable So even though I'd spent 400 pounds on ads I'm not going to bother talking about the Shopify plan side and app side because it's neither here nor there For the very first month or certainly for the very first few months You're probably looking at about $50 a month including the basic Shopify plan You don't need an advanced one. Just the basic one is absolutely fine until you hit about 10 or 15 grand It's either one of two of those numbers Then it doesn't make financial sense to upgrade your plan. So just stick to the basic one Get your basic apps like over low a decent upsell app a decent review app And that's pretty much all you need then to begin with and it's it's gonna be about $50 per month For the first few months until you start to make some decent money So I'm just basing that on that $50 a month That's going to get you your plan and the necessary apps that you need to begin with So I started with Facebook ads and I didn't even look at Instagram influencers until about six months later I'm a numbers person. I like looking at numbers spying patterns So I've always stuck with Facebook ads ever since I started three years ago now So yeah back to my very first month and 400 pounds in ads 455 revenue And if I remember rightly I lost about 200 pounds But at that point I didn't care because I was starting a new business I was excited to see people were spending money with me So and it showed the potential as well 500 pound back then especially was still a lot of money to me So the facts that I had that potential there Spurred me on to basically just keep funding this drop shipping business with my nine to five wage and just keep going So in this first month then my business cost me around about 200 pounds now I know you're gonna say I spent 400 on ads But I made all of that back plus a little bit and then the product cost was about 150 pounds back then I used to work on Kind of like the ratio of 30 30 30 so 30% of product cost 30% of marketing cost and a 30% profit However today with Facebook ads being a bit more expensive Then you can expect to pay a bit more than 30% of the product cost now That's only on low ticket items with higher ticket items and obviously it's not going to be as high as 30% Especially in today's age with Facebook ads being more expensive Then I always recommend people try and leave at least 15 pounds for a cost per purchase and still be able to make profit So selling products in the kind of like 25 pound range and upwards up to about 40 pounds I usually find is pretty much the sweet spot Facebook nowadays So without being said then that is my very first month It cost me about 150 200 pounds included in all the different Shopify apps and the basic plan etc I spent 400 on ads But as you can see I got all of that back plus a little bit So the only kind of expense for that first month then because the Facebook ads were paid for themselves Was the product cost on Aliexpress and 30% of 450 pounds was about a hundred and fifty pounds Plus 50 pounds for the first month on the Shopify app plan and that was my very first month Moving into month number two then this is where things started to get a lot better for me because my business started producing and profit So essentially my business wasn't costing me any more money because it was making more money than it was costing me So as we can see I spent a bit more and adds 530 pounds and a return 1200 pounds with a 2.41 ROAS And if I just show you month number three quickly Things continue to improve fortunately enough for me as well You can see I spent 1600 on the ads 5 for revenue with a 3.27 ROAS at this point as you can imagine I was pretty happy with things But that's back then then you've probably noticed the date was 2016 So we're talking nearly three years ago now. What does this all mean then if you want to start drop shipping in 2019? So what I'm going to do now is go into the breakdown where I'm going to show you the number in which I recommend you guys save up until you have this number before you start your drop shipping business and then give you a Guiding strategy in how I would go about spending that money. Hey, what's up guys? So this is the strategy then mapped out day by day I'm going to take you through it step by step and then at the end tell you why this strategy actually works And the kind of rules then that it's based on so start from the very top as a minimum recommendation I Suggest you wait and save up at least five hundred dollars to start your drop shipping business now I understand this will be quite a lot of money for people But one of the advantages to drop shipping is that it is low startup costs I can't really think of any of the business model apart from social media marketing agency where you'll need actually less money than this To start a significant business, especially in that the last five or ten years Certainly before the internet that most people required Premises and they had to pay people from the very beginning So you were talking tens of thousands of pounds to start a business So five hundred dollars might seem like a lot But don't be in a rush take your time look at other ways to make money perhaps sell things around the house Just try and save up as much money as possible as it says there That's five hundred dollars as a minimum the more you have then the better chance You'll have to succeed because the more money you can test with and play with on Facebook So if you're starting with five hundred dollars then Kind of like the minimum requirements in which you'll need before you can start advertising and selling products number one Is the Shopify plan just go for the basic one twenty nine dollars is absolutely fine until you hit I believe ten grand in revenue a month then it doesn't work out financially viable or Advantages to increase your plan Number two then there's kind of like three apps Which I recommend you have as a minimum before you start number one is Oberlo So you have that cross-integration integration with aliexpress number two is an upsell app because if you can convert a good upsell Certainly at 10 20% that can make a significant difference to your average order value and therefore your profitability One kind of quick little tip is just make sure you choose an upsell product that is from the same supplier as your Trigger products or the products you're advertising that way you're going to save that Usually it's about two pound fifty carriage charge, which is quite a significant profit Effect on your profit margin and number three make sure you get a decent review app Something like looks reviews you get a free trial with most apps But just to kind of make sure you do have enough money in the bank to pay for these just set aside $50 for the first month. So this leaves then $450 left for marketing So $450 then how are we going to spend it day number one and two is going to be all about testing I've spoken about testing a lot of my channel recently and how I use traffic campaigns to test different audiences because it's cheaper data So that's what this premise is based on. I want you to create traffic campaign I want you to have 20 ad sets So we're testing a ton of different audiences here and just make sure then these ad sets have Unique interests the unique audiences. Just make sure you're not testing the same audience twice You want that audience size into be around the kind of like one million mark You can flex interest. You can flex it with Online shopping flex it with engaged shoppers. Just try and get it around that one million mark Now if it's two million, it's not a big deal But to begin with just don't go out and target audience sizes of like five ten fifteen million people Daily budget then I want each ad set to be set at $2.50 per day After two days then this will give you a total spend of a hundred dollars over the two days Which leaves you $350 left to scale now the reason I want you to start with the traffic campaign I've spoken about it tons before in the video So I'm only going to go over it briefly is number one the data is cheaper You can reach more people and the more data you have then the easier is to set that kind of median that mean average To give you a comparison of whether an ad sets performing well or whether it's performing badly So if you have 20 different ad sets 20 different audiences the main piece of data I want you guys to focus on is the cost per link click and then that's clearly going to give you An idea of which audiences are performing the best so at the bottom end You might have a cost per link click of like over a dollar But then at the top end the best performing ones you might have a cost per link click of say ten cents or twenty cents So obviously this one that's performing at ten to twenty cents cost per link click Then obviously that audience is a lot more engaging and has a lot more interested in your product and therefore it warrants being invested in even more in a conversion campaign and Given that extra budget to try and scale it and actually start bringing in some sales So that's what I want you guys to focus on run it for two days two dollars fifty per day That's a hundred dollars total spent which leaves you three hundred fifty dollars and left to scale the ad sets that are performing the best One important thing is well is make sure you're looking at the cost per link click and not just all clicks because a link click is a lot Higher value event than just somebody who clicks on your ad somebody who's actually taking the time actually clicked on your URL your link and gone to your site then obviously they've shown more interest than somebody who's just simply Clicked on your ad to open it up in bigger view So just make sure you focus on the cost per link click because that's going to give you a better Representation of whether people are actually interested in your product or not So all that being said they're moving on today three then this is where things get interesting and where we start to make some money So take the three best ad sets and so out for the 20 audiences You've been running 20 ad sets take the three best performers and duplicate them into a CBO purchase campaign I forgot I left that out Into a CBO purchase campaign because now we know which audiences are most responsive now We want to tell Facebook right we don't just want traffic to our store We actually want to drive people who are going to make a purchase and out of this audience Which is showing the most interest now find the people within those people That are more likely to make a purchase if that makes sense before you set the campaign to go live Then what I want you to do is take each one of those three ad sets and duplicate it two times So you have ad set number one duplicate it twice ad set number two duplicate it twice ad set number three Duplicate it twice and this is going to give you nine ad sets in total in your CBO campaign Now the reason I want you to do this is because I've been experimenting recently with this whole Within the audience you'll have different kind of sections and groups of people and every time you duplicate an ad set Then it's going to be kind of like targeted to a different group and segment because you could spend say $50 Testing a specific audience to get zero results But then if you duplicate it and have two ad sets in two different segments of that audience now Facebook hasn't confirmed this yourself Themselves, but this is just something I've been experimenting with recently that's been working really well for me So this is why I want to pass it on to you guys So if you're not clear on any of this by the way, make sure you just leave a comment down below And hopefully I can answer your all your questions. So nine ad sets in total then in your CBO I Want a $50 daily budget and I want you to run it for three days Now the reason I want you to run it for three days is because purchase campaigns take a while for them to optimize and actually start performing Efficiently you might find that in two days you get zero sales But then in one day you'll get a decent amount of sales You might even be profitable and if you are then what that shows you is a really strong intent that those ad sets in this Campaign then has potential. So once you've run it for three days Just kind of quickly taught up how much we spent we spent $250 spent so that now leads us $200 left to scale the ones that are showing the most promise and the most potential So after you've run the campaign for three days, then what I want you to do is go over all of the ad sets and Just kill the ones that are performing well So the ones that are actually bringing in sales because we spent $150 we want to see some sales by now We want to start recouping that money we're spending on ads So any ad set that hasn't produced a sale for you just kill them keep the ones that are producing and Then just let it keep running keep it at $50 Run it for another three days and again if they keep performing then that's when you start to increase the budget and by now You'll start seeing money coming in the door Certainly if you've got PayPal linked and you'll be able to reinvest that money into more ads And then just slowly but surely scale up that CBO campaign and that is essentially what's been working really well for me recently Now so that's the strategy itself as I mentioned earlier any questions on that at all Please make sure you do leave a comment down below I get back to every single person, but then what is the thinking then behind your strategy? Why does this actually work number one is you have to commit to Facebook ads in order to succeed? So this includes your budget and this includes your time time and time again I see people spending $5 per day on ad sets and they'll test a ton of different ad sets But they're all at $5 per day and they can work up a total bill of about $1,000 But because they've not had that commitment to us and that confidence to try and scale something and just Like whack a budget of $50 per day on it or $100 per day and give it a chance to actually properly succeed Then they never have Facebook works on past data. It needs time to optimize So if you don't commit to the ones that you have confidence in and that's why it's important to run these traffic campaigns So you can see exactly which audiences are committing and which ones have that interest So unless you have unless you do commit to those ad sets Then you're never going to give it time to optimize or budget to optimize and actually see those results And then the second main reason is the broad testing lets you find winning audiences quickly and cheaply So by using traffic campaigns, you get further reach So therefore you get more data for your money and therefore you can see which audiences are actually interested in your ad in Your product and by spending less money effectively. It allows you to test. It's almost 10 percent. So by Testing 20 different ad sets in order to get the same kind of results in a purchase campaign testing audiences This is then you'd have to test almost 200 ad sets or pay the price of 200 ad sets to get the same amount of data back that really is how much cheaper it is and Like I mentioned earlier is that when it comes to being successful at Facebook ads It's about testing as much as possible Sometimes I'll be gorgeous crazy and Tesla 50 ad sets within a traffic campaign because the more you test Then the better averages and the better mean you have I've used this example before so the only reason then we know that Usain Bolt is the fastest man in the world Because it's because we've seen him race against all the other best runners in the world and therefore we know he is It's the same with your ad sets The only way you'll know if an ad set is performing the best is if you have other ad sets to compare it again So this is why the testing stages within Facebook ads is just really really important So anyway, with that being said then guys, I feel like I've talked on and rambled on enough Hopefully you guys have learned something new if you go out and test this strategy Make sure you come back and let me know what kind of results you get and of course any questions Make sure you leave them in the comment section down below And if you enjoyed the video then please do make sure you leave a like and of course If you want that chance to win a one-to-one call with me Then all you have to do is simply leave a comment down below and with that being said then let's get into announcing the Winner of the previous video. What's up guys here? We are then on my previous video do $5 Facebook ads still working 2019 a very important video if you haven't watched it yet Please do make sure you go and check it out. Anyway, let's go on to announcing the winner So I'm just gonna take the URL head over to our random comment picker these competitions are 100% random 50 unique comments, which is absolutely awesome So thank you very much for the support and the winner of the previous video then is Mario So thank you very much Mario for your comment Please do reach out on Instagram and we can get that call arranged and guys If you just want to get straight down to business and book a call right away You can't actually do so just make sure that you check out the links in the video description below I've got me so then thanks again for tuning in. I hope you enjoyed it and I'll see you all in the next one