 Hello everybody! Today we have a super interesting interview with Tom who is a good friend of mine and a super interesting globe shipper. I'm so excited about this interview because I didn't create any interviews or any videos for this YouTube channel for a lot of time but this one is a special one so I really wanted to spend time on that even with all of the world that we have right now on Autodesk. So how are you today Tom? I'm great, I'm great here, how are you? I'm good. So before we get started and jump into all the technical stuff about how you became a top Shopify seller with the Shopify Plus subscription and everything that you do right now, can you tell us a little bit about yourself? For sure, for sure. And started out with Amazon SBA and then I went on like like a big trip to South America and when I came back I really wanted to come back into the business but didn't have so much money so I was like looking for an alternative that will bring some cash flow but at the same time I won't need to like invest too much into it because I didn't have much time. So I started getting into dropshipping and of course the first thing that you do when you start dropshipping is like search for a software that will basically sync your products from the supplier that you want to use directly to your store and that's actually when I met Leo from Autodesk and from there I grew to like started and pilot labeling my products in China and then bring them to the US but when I just started dropshipping was like really helpful for me for testing products and seeing what works and what doesn't. That's cool. How did you hear about dropshipping in the first time? Like I was already in the SBA business so I was in like some groups and I just I started looking for like ways to make money without investing too much and that's when I found out about dropshipping. That's good. Okay and right now so from what I know and what you just said so right now I have a branded store and they have your SBA business and everything there but I would like to focus on the Shopify dropshipping store that I have in the beginning, regular dropshipping. So before I get started how did you get to the niche that you sold there and if you can also explain what was the niche if it's fine for your market? For sure and actually about the niche it's a pretty tricky subject and I was just thinking of like I didn't have any research method I was just thinking in my head like which niche are many people buying in and I just wanted to have like a big enough niche for me to to reiterate like if some product doesn't work for me I don't want to set up the whole store from scratch so I was looking for more like a general niche that I can test multiple products without opening new stores basically so then the niche I came to was actually baby products which as you know like is a pretty big niche and there are tens of thousands of products in this niche and you have like a lot of options to test. So basically you came to the niche just from thinking about the world and what people would buy it. Exactly as I said I just wanted something like very general so that I don't have to create the store from scratch again and I was just like okay baby products sounds good to me. Okay that's awesome it's interesting product signing method and when you started your store it was like one product store or you just listed multiple products for babies. So I listed actually multiple products like in my thinking especially if you're a beginner and you don't know what works and what doesn't drop shipping in a lot of ways is like it's a game of numbers so in order to find the right product you need to first go through as many products as you can in as little time as possible so you need to set yourself that like you want to upload five products a day this way you have like much higher chance to get a good product because there are many things that you don't know about the product on the back end like knowing how much competition it has and how well it's going to convert it's very hard to to determine before actually testing so testing as many products as possible is the key here. Okay and how many products did you test in parallel? Do you have a number? Way too much I was like I was all by myself like working like just uploading products all day and when I started out I had like a goal of uploading five or six products a day and with time it becomes much harder because you upload a product and that's not it you need to also advertise it you need to optimize the page you need to find a good supplier and connect it to your system to auto DS to the supplier and it's a pretty time-consuming process which later on I've actually higher than employee that I basically I teach them how to do it and they started doing this part of the business. Yeah that's cool the product we are from US or China or anything else? So you know we all prefer to to sell something from the US but sometimes like not all the products are in the US so your selection is pretty limited if you're just focusing on products and shipping from the US. So actually and at that time most of the products I was selling were from China. Okay from what supplier which supplier did you use? I actually found out like in the beginning I started with AliExpress and I had like so many communication issues with suppliers I had a hard time handling all the support that I needed because you know we ship products to customers and they have questions you need to provide answers and this answer you need to get from the from the AliExpress suppliers which they are not very responsive and most of the time so I've actually found CJ drop shipping to be a really good solution for a drop shipper that want to get into the business like they have a good selection of products you can actually request you can do a source request which basically you post like whatever AliExpress product that you want and they'll find it for you. So basically CJ is like a Chinese supplier that can source for you any product from AliExpress and how much it's cheaper than AliExpress or faster shipping what's going on there? Yeah so not really cheaper it's the price is the same most of the time it can actually be a little more expensive sometimes but like you have way more control you can actually choose what shipping method and you want to use and I really like it I like it much better. When like if you have more sales for a product can you bring it to the US warehouse how this works? Exactly so that's like the next step like basically if I break it down there are like three steps first step you start with drop shipping from China then you can actually bring the product into CJ warehouses that are inside the US and which still doesn't cost too much you don't need too much money upfront and it's pretty easy to do with CJ and then basically if you see that it really works and you want to manufacture your own then you can go ahead and do that. And how long do you take it to get your sales set on your drop shipping store? Also actually when I started it wasn't like going very easy for me and I was going a lot of wrong directions so it took me like I think something like two weeks until I got my faster but obviously it wasn't very profitable like I was basically losing money. What was your beginning budget? What budget did you start? Yes so I didn't start with much budget and I think I had like a thousand dollars something like this for the test and everything and you know you can't really do much with the thousand dollars unless you're doing drop shipping which doesn't require much so it was all good. Okay and then this budget went to advertising right? Yeah yeah just advertising. Okay so we'll talk soon a little bit more about advertising but before we jump into this what was like what was the scale that you got with this baby's store? Yeah so at the peak actually I had so many issues with my Facebook accounts getting banned and if it wasn't for that I would have been much much higher but at the peak I was at like seven thousand dollars a day in revenue something like that it was like that for like around a week and then my Facebook account got suspended and I had some supplier issues but that was like the scale at the peak time period. It's cool how much time it took you to get those seven thousand dollars a day? Yeah so it took a couple of months and I think about four or five months to get to this scale but if you know what you're doing you can do it much faster and in the beginning I was I didn't really know what what I was doing I was learning like as I go and but yeah that's how it is with drop shipping and because you don't need that much money you can actually scale really fast as opposed to having a private label brand where you need to to buy all the inventory up front and pay so much you have like so much overhead and with drop shipping it's not like that. Awesome so do you remember what was the first product that you saw? Yeah I actually do you know I think everyone remembers their first product yeah so it was actually the it was an elephant a peekaboo toy it's like a toy like interactive toy that moves its ears and plays like with a baby and it's a really cool product and I actually know why it worked it was because I was advertising on google shopping and at the same time like other advertising were scaling this product on Facebook so my traffic was like a by-product of people going into their store and then looking for the product on on google again so it worked like really well at the time. Cool and how was the feeling with the for the first sale? It was actually amazing I remember I just took my camera and I remember I took a selfie like I said this is my my first sale selfie I was this excited. It's an amazing feeling to get your first sale I also remember that and I think basically a blue drop ship I remember his first sale. Yeah especially with Shopify you have like this and the notification everything and this Shopify like green color like in the beginning it really really rises your dopamine when you see this this icon it was really cool. Yeah it's a bit of addiction after that like you're starting to get more and more sales and stuff to get into that. Definitely yeah definitely I think you know when someone is a beginner when he has the notification and sound turn on and then when you start to get a little more advanced and you don't want to see them notifications anymore like you just turn it off and you check it every couple of hours like otherwise you'd just be glued to your phone all day. Yeah it's an addiction I agree after some sales it's too much. And what so you talked about the Facebook advertising and about Google shopping can you tell us a bit more how you advertise new drop shipping product that you want to test? For sure I was actually and I did a course on Google drop shipping and I also saw some like good information on AutoDS website that really helped me to like keep start everything and what I'm basically what I'm doing is pretty simple like uploading a bunch of products to your Shopify store connect them to whatever supplier you'd like I really recommend using the AutoDS app to connect to CJ drop shipping because like CJ drop shipping and their interface is pretty hard to navigate and so I found AutoDS really handy in this way. So I was just uploading a bunch of products like I said the key here is to do it quickly and if you upload one product a week your fans are much lower to succeed so you just gotta go edit upload five six products a day and open a sandbox campaign I call it on Google shopping and just put a bunch of product groups in there and with one product in each group and basically what you do is you just observe it over a couple of days you give the product a chance and to spend some money and in the beginning my stop loss point was when I was spending on a product two times its price so if a product cost like $50 I was waiting until it spends $100 if it didn't make a sale I kill it and if it does make a sale I check maybe there's something that I can improve with this product and you use for like different ads videos pictures how do you do that so basically with Google shopping you don't have much options so you just upload a product and the main email is the key here it's like the only creative part I would say of this advertising and I was actually doing retargeting too on Facebook but not to call audience just retargeting the people who visited the website and it's something to cut yeah that was my method didn't involve too much creating work and on Facebook you use the video ads or images so actually I didn't have much video ads because it's you know it's how to find the good videos unless you create them but I did have some some good video ads and actually I told you about the elephant product which after that I found the a similar product which is the pickable belt that's the one and that you actually have screenshot of and this one and I started scaling it on Facebook so this was actually a product that started on Google shopping didn't work too well but then I found like a really good and you know it was like home taken home video like of a baby playing with this product wasn't like anything fancy just a simple product of a baby having fun with the product and this was actually the creative that worked the most and I did try to to play with it a little you know add some side titles and add some video effects and but like in the end what worked best was the original video no editing no nothing just showing the baby having fun that's what like convinced people did you consider to brand your successful products with a bear or the elephant yeah I've actually I've taken a look into into branding it but like just before I was about to do that and I had the facebook account issues I told you about but branding was definitely something that was like on the line what is your Shopify subscription plan right now and what was before when you did the drop shipping so actually when I started the drop shipping I was obviously at the starter plan like the lowest plan and I walked my way up to the advanced plan with the store we talked about the drop shipping store the baby one and currently I'm on Shopify plus and it gives us like the freedom to edit the checkout and do some maybe test over there so it also makes sense and in terms of fees to upgrade so actually good team for everyone is there's like if you search on google Shopify plan calculator I think the first result is going to be like a calculator that shows you and like you basically input your and your revenue and how you're processing the payments or PayPal or any of that not sure if I use them I'm sorry Shopify payments so you enter that and then it basically gives you and which plan you should be at and like it's calculating how much piece you're going to pay and what's the base price and it tells you like what you should use awesome so basically for you it was not only fees saving but also it increased the conversion rate on the checkout because you worked on the checkout exactly that was like the the key functionality that I was looking for when and when going for plus so we talked about how you find your products that basically you just feel if something that works well or not and think about the niche and about the audience we talked about the marketing that you use google shopping and Facebook and about the suppliers that you use which are basically Chinese suppliers with US warehouses and then you see what works and just get it up but what do we do when someone comes to your store how do you increase your sales using different strategies so basically there are many ways that you can increase sales and increase AOV and I have like many tricks like I can share with you and first like upsets I mean that's the best way to increase AOV and AOV increases your profit margin but by so much I mean if you increase your AOV and it's basically more money without spending more on ads so it's a key for making a profitable dropshipping business like if you're not doing upsets you'll have a really hard time and getting it to a point where it's profitable so I was doing actually two types of upsets one was an upsets before the cart so when you add something to the cart you're gonna have like a pop up pops up and then you'll see some products that make sense like based on what you first purchased you're gonna see other products that you might like and so if you don't pick this you just go into the normal checkout and actually when you when you finish the checkout and you also get an upset and with some urgency like if you say something like so you have 10 minutes to buy this product and what I found out is pretty interesting contrary to what like people would believe would work with upsets actually the the best product for upsets is the actual product that they bought in the first place so offering the same product twice works really well and a lot of the times I mean sometimes it makes sense sometimes it doesn't you know some products people don't buy two of them like if you buy a laptop nobody's gonna buy a second laptop but if you buy a cup for example then offering another cup is a should work it's cool and you give a discount for the second one yeah I actually did give a discount because you can actually give discount because the products will be shipped together and we drop shipping as you know and big part of the cost is actually shipping because you're shipping from China so your cost is a lot of it is shipping so if you're shipping two products in the same package and the shipping cost is not going to be twice obviously it's going to be much less so you can pass the savings on to the customer yeah it's cool so basically you give a discount but you don't lose money exactly and you you don't spend on another cost per acquisition so you pay for one acquisition and you get twice the revenue basically not twice because you give a little discount but close to that yeah also can you tell us what is the AOV that you you mentioned because I guess that many people will not understand what is that so AOV is basically average order value one of the key metrics and in e-commerce it's one of the thing you should really like take a close look of and when I when I started with this one the product cost 30 dollars basically 29 and when I started out my AOV was like 32 dollars and was just like a little more from people that and occasionally like bought another product in the store but when I started really like hammering it down with with upsets and offers and and all of that and it got up to almost like 40 dollars which is a big difference because you you gain an extra eight and dollars on each customer that you have wow and then you can spend more into the advertising exactly then you can like spend more on acquisition and get more customers interesting yeah so basically what other way you do have to increase the AOV so there's also another trick that I was using like towards the end of the of the scaling now that's something and I didn't see much people and I didn't see too many stores using this method but it's actually like making new shipping methods and you can get really creative with it so you can have a standard shipping and then you'll have express shipping which these two are like regular you see them in every store but then you can do some cool stuff like editor shipping method and like that includes a new random product with your order for like 10 dollars more and like I said you're not gonna pay too much for this product because they're all shipped together so you can add something that costs let's say three dollars for you and I think it's also really good like for the customer I think it's cool yeah and then do you make profits also on the shipping cost yeah I mean the shipping cost is going to be much lower because you're already shipping and a package to the customer for the express shipping of course you're going to make a profit and you can have like an express shipping for like five dollars from your supplier and you can mark it up to ten dollars and actually at some point of this scaling I was actually and charging shipping for the first like for the standard shipping so I was charging like something like two dollars for the shipping and I noticed that it didn't decrease my conversion rate so I just continued doing that so I really recommend everyone to take a look into what Tom just said and really start implementing it because maybe you can scale up your business and help with that so how do you get more inspiration for Facebook ads do you spy your competitors or do you have any other methods how do you do that so I always spy on competitors I think that's the best way and I'm not gonna like reinvent the wheel especially not at the beginning that you don't really know much about e-commerce then I think your best bet is like take a competitor that you like what he's doing that you see some social group on his ads so you can guesstimate that he's getting some sales because nobody waste money on ads that are not making not making money I mean not in e-commerce so if he's having some social proof you can take a look at the ad that he did and you can you can try to understand why it's working and look at the creative I mean don't copy the exact thing but take away the key point that make this one work and try it for your business so if you see an ad that works and you see that it's like it should at home and it's like user generated content not too professional then you can try to make something like that in your home and use this creative and you can also take some key notes from the creative that they wrote and from the text and see like what points the customer cares about and make your ads based on that okay cool so basically if something works for someone else's it means that they basically spend money on it and it means that it works for them exactly and it makes your process much much simpler because you don't need to guess anything you have something that works and you just need to find a way to make it work for you how do you manage everything do you have a team of VA's or do you manage everything by yourself so at the time that I started dropshipping I was actually all by myself and I did everything by myself and I think it's important for for everyone to do everything alone for a certain period of time and to learn everything better and like if you if you hire someone you need to actually teach them you can't expect them to to learn everything alone so you're going to know how to do it best and so at the time I was all by myself and right now for my for my new company the one that came after and the baby store and I'm actually I have a team and it's me my partner and another eight employees and we manage it all with like a project project management software and we're doing like everything like really streamline and everything has a process also and what what do what this team does make what kind of tasks and they are doing a lot of product research and customer service and they're also managing call sender which they call up on that is by the way another really important tip for all of you and that have a lot of abundant cards that's basically money on the floor like I mean yes emails are going to get some of them back to your stores SMS will also do it but actually calling the customers is the is the best way to get them back it's like very personal and a lot of American people really like that okay so there is a like salesman who just calling people so I wouldn't really call it a salesman and that was just like a VA and was not like super professional salesman and but you know when someone abundance your car that's basically it's like a really hot lid so you don't need too much and to get them back to buy your product basically a lot of them are just having hard time and like technically with the checkout so you don't really need to sell it to them you just gotta like give them the last push I would say and how do they call them technically there is a software or what yeah we're using a software called the air call and to manage our call center really good software I mean no complaints and and yeah if you get a little bit more advanced and you want to attribute and sales to certain ads then you can actually use call rail and your employees are from the US or from any other country my employees are all from the Philippines but they are like they are highly valued employees and I hire maybe one out of every 20 or 30 applications and make sure that the English is good and they have like that you don't have too much of a Philippine accent and so basically I have the best of the best but you have a ton of good employees in the Philippines I mean yeah I agree because this way you save time and there are really high quality people what about payments how do you get payments from customers do you use PayPal or any other payment method so as you know like with e-commerce and payments is like the it's a hard point for Israelis like us and it's really not that easy when you start scaling up and using PayPal is not very optimal they can just shut you down at any given point so you don't want to just rely on them and there are no other and payment gateways here in Israel that actually has a native integration to Shopify meaning the checkout choice inside the Shopify store without redirecting you to another page so at the time with my dropshipping store I was actually using another payment gateway here in Israel that redirects you to an outside page and then brings you back and it does hurt the conversion rate a little bit but the biggest problem with that is the time it takes for them to pay you the money it takes like 30 days so if you're tight on cash flow you're gonna have a hard time using one of these gateways you're gonna have to stick with PayPal so for beginners you would start just with PayPal yeah it works it works I mean I have strengths that have scaled past half a million dollars a month just of PayPal and it is possible it's not optimal but it's possible yeah I agree because PayPal is the easiest way to start we are talking here about international users because for American it's much easier you can go for strike or anything else about the product that you saw in the beginning did you get any sample to your home or just started to sell it without actually seeing the product yeah so it's a little bit of a shame but I the first time I saw my product was like after 10,000 sales so I didn't I didn't really know what I was selling until like a later later point in this business but like I mean eventually I did get a sample it takes like it took very long and I remember the day I took it it was like all submerged in water I don't know what happened in the way but the product was like all really wet and but I did get a sample eventually but you really don't have to and as I said in the beginning and one of the key points here is to test as many products as possible and getting samples to your home for each product is actually against this it like you wouldn't be able to test that fast so I'd say get a sample once something starts working for you then it's a good time to and to get a sample but up to this point you're good to go so basically you get the feedback from your customer actually a little bit before that I always check the feedbacks on AliExpress or whatever other other platforms this product is at so I just google the product I check what people have to say about it and I mean if it's really bad I wouldn't even and I wouldn't even sell it but if it looks okay then you can put it up to your store and get some feedback actually and a review up for your store it is really important both for social proof and also for like getting feedback and so even like if you have an angry customer and you better let him leave a review on your store and on your store review system then to go on Facebook and say some bad things about you so that's also a good one so you allow them to put reviews on your store for the products yes I do but it's not auto published so I can actually choose which reviews I want to publish which ones I prefer not to and that's one of the of the advantages that you have when it's your own store you're the boss you pick what's gonna show and what doesn't and then you just you also work with the customer after that to make them happy of course I mean if someone leaves a bad review and like yeah I'm not gonna publish it and I have no reason to but I will speak to the customer and try to make it right for him because as you know in the United States they also have the option to to charge back the charge so you don't want to mess with them too much because like as we said before we are also using just PayPal as a gateway so if you have too many chargeback and disputes you're going to get burned by PayPal and also like lately Facebook it's not really lately but Facebook has a feedback score on your page and they basically send and surveys to customers who have purchased from you and it's like they're anonymous they won't show you the actual customer that gave you a certain feedback but it's a score from from zero to five and if you go below a certain point you're gonna like a really hard time advertising on Facebook your CPMs will go up and at one point your your company just shut down so you've got to make sure your customers are happy wow okay yeah so so you say what you say here is that basically shop if I drop shopping business is like every business in the world and you need to really to care about the customers and make them happy exactly it's actually becoming more and more important with time and basically everyone is making new systems of checking like how good is the experience of the customers are because Facebook is their own interest that customers that purchase from ads are actually happy with their products because otherwise people just wouldn't click on ads so it's Facebook interest it's Shopify interest it's PayPal of course it's PayPal interest PayPal don't like when when a customer disputes a good charge so basically it's everyone's interest for you to sell a good quality product and give good quality customer service okay so I have two last questions so one of them is what are the tools that you use to manage your drop shipping business and to scale it up so I've used a few different tools and I was using like I said and I was using your software the out of the air software and really helped me with the streamlining the product uploading and checking the prices and everything and this was like I'd say that the main and the main app that I was using and I was also using some upsell apps I really I really like the candy rack and upsell which is the before cart upsell the pop-up and I was using reconvert for post-purchase upsells they work really good they're also Israeli and what else did I use there's actually one more trick that I can give to you guys which is to add a line and somewhere in the top part of the page that says and your item will arrive in this date so if you have a fast shipping like if you ship from China I guess you don't really want to do that but if you have a faster shipping then you can like get an estimated shipping delivery date and show it to the customers it really puts up the conversion rate. Cool so for those who use your air suppliers it's really recommended. Exactly like I've tested it I've actually tested it in like I did an A-B test and without this line and with this line and it was showing like great results just by like this one little trick. Awesome okay so the last question that I like to ask in the end of an interview is what would be your best tip for a beginner who wants to start a dropshipping business? So the best tip I'm actually going to say a tip that's not like really technical or like very related to dropshipping but in general and like pick what you want to do and just stick to it because it's not going to be easy or not going to make money the first day and not even the first week and for me it actually almost took like six months from the point like I really started in the beginning until I started making money so and the key here is to just speak to it stay dedicated and keep pushing even when things are not working and and just be patient until you start making money because it's a process. Awesome so like any business you just need to be consistent. Exactly and being consistent is not always easy it's easy to be consistent when you're succeeding and making money but it's not that easy to be consistent when when things are not working for you and that's where and you really need to stick with it. Great so thank you so much for this super inspiration interview and for all the inspiration that you will give to dropship else and thank you for your time Tom and thank you. For sure I had a lot of fun thank you for your time as well.