What is Dropshipping?
Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product using the dropshipping model, it
purchases the item from a third party and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly.
In practice it’s broken into four steps:
- Customers order from you site
- You send the order to supplier
- The supplier packs and ships the order
- The customer recieves the order
Since dropshippers do not need to buy or store inventory it makes it very easy to start, giving access to people who couldn’t otherwise start a business.
Advantages of Dropshipping
Dropshipping is a great business model for aspiring entrepreneurs to start with because it’s accessible. With dropshipping, you can quickly test different business ideas with limited downside, which lets you learn a lot about how to choose and market in-demand products. Here are a few other reasons why dropshipping is such a popular model.
1. You can start with a small budget
A traditional retail business requires the purchase of inventory in bulk, storing it, and the suppliers to pack and ship it to the customer. Dropshipping avoids these costs by relying on the supplier to handle the storage and fulfillment.
The majority of costs dropshippers incur are from marketing. Your website and advertisements will be the bulk of what you spend growing your business, but you can start with as little as a few hundred dollars to test a product. Once you start bringing in orders you can use the revenue from your sales to fund your ad campaigns.
2. Easy to test ideas
Since your costs are relatively tiny compared to a traditional business model it gives you the ability to quickly test ideas to find something that works. If you have 2 or 3 three products you think could work you can easily run them side by side to find the most profitable. In most cases, you will know if a product is able to scale after a week or two.
3. Easy to scale
Compared to traditional retail, dropshipping is much easier to scale. Traditional retailers have to worry about manufacturing capacity, pack and ship operations, and other problems to scale. Dropshippers on the other hand focus on expanding marketing campaigns. While your product may require some negotiation with your supplier or the use of dropshipping agent to scale that process is a lot easier to handle than all of the operations suppliers are dealing with.
4. Starting a dropshipping store is easy
All you need to start a dropshipping store is a willingness to work hard, learn, and a small budget. Ecommerce platforms like Shopify and WooCommerce make launching a store easy. There are a ton of other free tools and apps that help automate and optimize your store. When getting started keep your store simple and track your ROI along the way. Find what works through A/B testing and getting feedback from friends and family (or join our dropshipping Facebook group).
5. You can dropship from anywhere
Many people that start dropshipping are after a lifestyle rather than an ecommerce site. They want to travel and make money without working a 9-5 style job. Good news, dropshipping is a great way to build passive income from anywhere in the world. Word of caution, dropshipping DOES require work, marketing skill, and hard work, but thousands of dropshipping sites have led to a great profit and lifestyle for their operators.
Disadvantages of Dropshipping
While dropshipping is a great way to quickly start and grow an online business, it’s not perfect. While you get the benefit of skipping a large portion of operational costs it means that you have to rely heavily on dropshipping suppliers. When your store relies on third parties it can face problems that are out of your control. Here are some examples.
1. Inventory and supplier issues
This problem usually happens once you start to scale a product. One day you’re averaging a handful of orders a day, then all of sudden you’re getting dozens (or hopefully hundreds) of orders. While you’re celebrating your success, your supplier can’t keep up. Since they can’t ship the products you aren’t able to fulfill the order and end up refunding all your sales.
While this problem is a “good” problem to have it often stops dropshippers from growing their business to its full potential. Make sure you have an open line of communication with your supplier. Before you start dumping money into ad campaigns, find out what capacity they can handle if necessary find alternative suppliers.
2. Shipping times
Many dropshippers use Aliexpress or Alibaba to fulfill their orders. While it’s easy to find products and start with these types of suppliers, they almost always have terrible 30 day (or longer) shipping times. In today’s world that just won’t cut it. Max shipping times should be less than 10 days and ideally less than 5.
If you find a product that you want to test on Aliexpress we recommend ordering the product from the supplier to see how long it takes to deliver. You can also contact the supplier to see if they offer faster shipping times.
3. Supplier errors and quality control
As a dropshipper you have essentially no control of what your supplier ships to customers. Since the customer ordered it from your store, you are the one they contact to get the order corrected. To make the situation right you have to contact the supplier and order to get another product shipped or refunded etc. This gets time-consuming and frustrating quickly.
How to Find Products to Dropship
So you’ve decided to give dropshipping a try, congrats! Now what are you going to sell? This is the first roadblock and the biggest potential mistake new store owners make.
Choosing a winning product that people actually want. Aliexpress has millions of products, most are garbage.
Successful dropshippers use one or a combination of these methods:
Why reinvent the wheel? Go to Facebook or Instagram and start looking for items that look like dropshipping items. Make sure to click the ad and note the quality of the page pricing etc.
Then use Facebook’s Page Transparency tool to gauge the success of the product. If the ad has been running for several weeks or months and has lots of comments and likes it’s probably because this product is profitable.
Create a list of 5-10 items you come across and list pros and cons to each. You can use the list of 5 tips for picking winning products that’s a few sections down to help narrow down to the right product.
Looking at the world around you
Okay this sounds simple and vague, but when you start looking at the world through the lens of an ecommerce store owner you will start seeing opportunities everywhere.
You will start noticing new trends and products just by watching what others are wearing, using, or talking about. Look for new gadgets, accessories, or even seasonal items you see friends buying.
Here are couple of examples:
Smokeless Fire Pits – Every spring and fall I noticed friends and family members buying fire pits. It’s the time of year when everyone wants to be outside and what better way to relax than sitting by the fire. This is also a high-ticket item with good search traffic so Google Shopping ads could be a great channel.
Cell Phone Popsockets – I’ve been kicking myself over this. Several years ago my 6 year old niece grabbed my brother’s phone and pulled something from the back. Confused, I asked what it was and he told me how it helped my niece hold his giant smartphone with her little hands. I had never seen one before. It interested me but seemed kinda dumb. In hindsight I missed out bigtime. Now this market is saturated, and I missed out on a very profitable trend.
Keep your eyes open, watch what influencers or “trendy” friends are talking about and bre ready to test out products quickly.
Google Trends is a free tool that helps you identify and measure the popularity of an item or topic based on how many people are searching for it over time. Here’s an example for pool floats:
You can see that every year during the summer months interest in pool floats skyrockets. This sort of short term interest can be a great indicator of when to launch a product or what sort of product you should be selling at X time.
Here’s another example of where Google Trends identified a spike in interest in popsockets:
Tips for Picking Winning Dropship Products
Picking winning products can be a time suck. There are several product research strategies that deep dive into niches, seasonal strategies, one product branded stores vs general stores etc…
But, across all of the different product research strategies there are few core principles that they all share. Here’s 5 tips for picking profitable products.
1. Can you cross-sell or up-sell with the product?
One of the best ways to make more profit from your store is to expand your profit margin. While increasing the price of the item may be the first thing you test, adding cross-sells or up-sells to your product is one way you can maximize your profit. Even by tacking on a few extra dollars at checkout can quickly add up.
What is a cross-sell?
Cross-selling is the practice of introducing additional (usually complimentary) products to your visitors. For example, if your store sells memory foam pillows you could also offer items like pillow cases, sleep spray and so on. These products are usually offered on the product page as a bundle or during the checkout process.
Cross-selling is a highly-effective strategy used in almost every industry to boost sales and value to the customer.
What is an up-sell?
Up-selling is the practice of marketing higher-end (and higher price) products to your customer. For example, if you manage an electronics store that sells speakers when a user is looking at a 6 inch speaker you would use images or charts to show how much better your 9 inch speaker is. Generally, up-selling has a better conversion rate than cross-selling.
The key to success with cross-selling and up-selling is to create a product offer that fits your customer needs. Create more value for your buyer and conversion and profit will follow.
2. Is it easy to ship?
Every dropshipper has struggled with shipping at some point. Whether its shipping times, packing quality, or cost it is a constant battle we all face. That is why it is crucial to sell items that are small, lightweight and easy to ship.
While this isn’t as important when you are testing items from some place like Aliexpress, once you start to scale your store and move to a fulfillment service you will quickly realize how important this is.
Many fulfillment services like ShipBob will pack several items into one shipment and only charge shipping once. So if you sell multiple items to one customer you only pay shipping once, erasing a big portion of your variable expense.
Additionally, as you scale you will inevitably have returns. While you may ask your buyer to pay for return shipping, in today’s world that doesn’t go over very well. If your item is cheap and easy to ship, getting items returned takes a lot less out of your pocket.
3. Is your item eye-catching or unusual?
Common items that you can find at any store are NOT good dropshipping products. This doesn’t mean they are bad products or won’t sell online, it just means that if your plan is to take a boring old product like a spatula, run Facebook ads to a Shopify store and expect success, you will fail.
Your product has to stand out in someone’s distracting social media feed. You have less than 3 seconds to grab their attention, and if you’re lucky 10 seconds to show off your product. This means your product has to be something that will draw interest and your ad creative and copy needs to be spot on. Not to mention, that’s just to get the click to your store, where you then still have to peak their interest through the checkout process.
4. Does your item have a perceived value?
Perceived value means that users will associate a price to the item as soon as they see it. For example, when you think of a coffee mug you can easily associate a price range. It may go up or down based on the quality or size, but you can easily determine it’s perceived value.
Winning products do not have a perceived value because they are unique and solve a problem. Their price is based on the uniqueness and value of the problem they solve. This is why comfort products like posture correctors and back braces do well for dropshippers. They solve a problem that is high value. If you have back pain how much would you pay to have it disappear? Probably a lot and you’re willing to try almost anything.
Selling the value of the problem your product solves means you can increase your profit margin exponentially higher than products that are commonplace with a value already attached to them.
5. Can you sell more than one?
This is particularly important if you are selling a low cost item in the $10-$20 range. If you are selling low cost items you will quickly learn that to sell enough items to make a decent profit you are going to have to sell a lot of products. That means more time fulfilling and tracking orders, more customers to communicate with, and more headaches.
However, if you can bundle low cost items into packs of 2, 3, or more you can make more profit with less orders and headaches. Many sellers do this successfully by adding bundles discounts like by 3 for 20% off, but if you are a competent copywriter you may be able to sell the value of having multiple of the same item. Whether that means selling different variations like color or being able to have multiple uses.
How to find dropship suppliers with fast shipping
If finding a winning product is the first hurdle dropshippers face, getting reasonable and reliable shipping is the second. This should not stop you from testing a product. The first step is to make sure you can actually sell and make a profit on your product. Step two is to get shipping times down and work out supplier issues.
While some suppliers on Aliexpress have express shipping most products have insane 3 week+ shipping times. That simply doesn’t cut it in today’s market where 3-7 day shipping is pretty much expected.
Make sure you test shipping times by actually ordering your product from the supplier – this also makes it easy to get unique product images and create custom video ads
This leaves you with a few options:
- Use Aliexpress suppliers with U.S (or local to your market) warehouses. This will quickly limit the amount of products available. Make sure to test the shipping time.
- Contact the supplier or use an agent to arrange for faster shipping
- Use a dropship aggregator like Oberlo, Salehoo, Doba, Wholesale2B or others.
- Find a local supplier
The best option will depend on your product. Some products can be sourced from Aliexpress using their ordering system. Sometimes just sending a message to the Aliexpress seller can connect you with better shipping and pricing terms.
Connecting with dropship suppliers
Keep in mind many of Aliexpress sellers are just a middleman between you and the actual supplier or manufacturer. If you find an item on Aliexpress and can’t work out better shipping the next step would be go to Alibaba and see if you can’t locate the actual supplier or manufacturer. They can usually tell if they have any express shipping options or local warehouses.
Dropship agents can also help connect you with the right company to fulfill your orders. Agents are usually people with industry experience in China who work with suppliers to get you the product you need. Many of these agents try to sell orders in bulk and then get you to pay for third party logistics (3PL). This isn’t really dropshipping in the basic sense and requires more money.
Be very clear with what you expect when working with an agent. In most cases I would advise involving an agent only when you are looking to scale your store.
If you can’t get the right supplier with manual outreach and an agent is a bit too involved then using a dropshipping aggregator is a good option. While they do have some monthly costs you are paying for the ability to have a stable supplier who can fulfill orders.
Not all suppliers in these aggregators are made the same. The aggregators screen suppliers but each one has different requirements. Just because you find a product or supplier doesn’t mean it’s going to be perfect.
Here’s some of best dropshipping directories available:
(no particular order)
- Inventory Source
- Worldwide Brands
Use Local Suppliers
While the US doesn’t have quite the amount of product manufacturing as China, you might be surprised what options there are for dropshipping. Many small-to-midsize US brands offer dropshipping. DropCommerce for example connects dropshippers with US based companies that offer dropshipping and gives you an order management platform.
There are two downsides to US suppliers: low profit margin, and product selection. Manufacturing is cheaper in China so profit margin is greeted if you can get goods made overseas. The types of products made in the US is limited, so finding something unique and interesting you can sell via Facebook ads can be hard.
How to Build a Dropshipping Store
This section will give you a high level walkthrough on setting your dropshipping store. We will focus specifically on Shopify, but if you have experience with WordPress or other platforms feel free to use what you are used to. For most, Shopify is the fastest and easiest way to build a dropshipping site.
Step 1: Create a Gmail Account for Your Store
Creating a Gmail account gives you a way to keep everything related to your store separate from your personal inbox. You can create your account here. Keep the email professional and similar to your store name. If your name is taken you can use something like “firstname.lastname@example.org” or “email@example.com” etc…
Step 2: Create Your Shopify Account
Go to Shopify.com and start your free trial. It will ask you a few questions about your address etc. Using your home address is fine for now.
Step 3: Setup Your Store’s Backend
After you create your account you will need to make a few quick edits to get your store setup 100%. Click settings in the left menu then the General Tab.
In the general tab there are 5 things you need to look at.
- Make sure your store name is correct and change to match your brand if it doesn’t
- You can change this email to anything you want like firstname.lastname@example.org etc…
- Should match A
- You can use a dummy phone number, your personal number or something else. If you want a phone number but don’t want to share your personal information, the Burner App is a cheap option to spin up phone numbers that get forwarded to your phone.
- You can use your home address, but you can put anything here. Generally using a UPS Store address or other mail room is a safe bet.
Next you will need to set up Shopify payments. To do this go back to settings and select payments.
One you’re in the payments tab you will want to do two things.
1) Click the “complete setup” button for Shopify payments and fill out the information including your bank account routing and account number. This where Shopify will send your money.
2) Complete the PayPal account setup. If you haven’t already, use the email address for your store to create a new PayPal business account specifically for your store.
That’s it for payments. Don’t worry about Amazon pay or the other payment options for now.
Your site’s check out flow is extremely important for increasing conversion rates. Here’s some basic settings you should implement.
First, go to settings and navigate to checkout.
Step 1) Change customer accounts to optional.
Step 2) Make email address mandatory for checkout. This helps grow your email list.
Step 3) Require First and Last name at checkout. Oberlo and other apps require first and last to fulfill orders.
Step 4) Activate tipping options. This helps increase your order values. Yes, people actually leave tips.
Step 5) Activate preselected email marketing opt-in.
Hit save and we are done with the checkout settings. On to shipping.
You should always offer free shipping. The idea of paying for shipping is a big turn off for many, so just include your shipping cost in the price of the product.
Start by going back to settings and click shipping and delivery.
Next, select manage rates.
Shopify will have rates already built in. Delete all of their prebuilt rates and create a new rate. Call the new rate “Free Shipping” and select “Custom flat rate”.
You should now have one rate called “Free Shipping”.
If you are shipping worldwide you should create another rate the same way in the “Rest of World” rate options.
Thankfully Shopify makes it really easy to generate all the boring legal terms and conditions so this part isn’t as bad as it sounds. Start by going to legal settings.
Each one of these sections has a “create from template button” except shipping policy. Click create template for each policy and review the policy to make sure you contact information is correct and remove anything that doesn’t apply to your store.
Step 4) Adding Products
There are a lot of apps and integrations for dropshippers to add products to their store. For the sake of simplicity we will focus on Oberlo in this guide. It’s free and easy to use. To get started, go to Oberlo in the Shopify App store. Then click “Add App”.
On the next page click “Install App”.
You will then be prompted to create an Oberlo account or log in. Create a new Oberlo account specific to your new store. Once your store is connected you should be in the Oberlo dashboard that looks like this:
Once your Oberlo account is linked you can import products from Aliexpress and manage your orders. If you need help importing products or learning more about Oberlo’s capabilities you should refer to their documentation. They have a ton of info and tools to help you get started dropshipping.
How to run successful ad campaigns
After getting your store setup the next step is getting traffic and eventually sales. Nailing your targeting, creative, and copy is key to growing a successful store. Make sure you track and tweak your ads as you learn what works.
What channels should you test first?
Facebook ads are typically what people jump to but in reality there are several channels you should consider for testing ads. Your product and audience will determine which ones you should test first, but here’s some questions you should answer to determine where to start.
- Is there search volume for your product? (Use a free Chrome extension like KeyWord Surfer to see search volume) If so Google Shopping ads or Google Paid Search may be a cheap way to drive high intent traffic.
- Does your audience have a niche audience or persona? Products that appeal to a very specific person are more likely to have success on social networks and/or with influencers. For example, energy drinks are pretty broad VS an energy drink designed specifically for yoga enthusiasts. The drink designed for yoga enthusiasts is much easier to create hyper targeted ads than just a “energy drink”
- Do you have direct competition? If you have competition selling the same product as you, don’t reinvent the wheel. Use the Facebook ad library to see if they are running ads or use SpyFu to gauge how much they are spending on Google Ads. Research how they are marketing their product and see if you can find a starting point.
Dropshippers most commonly start with Facebook Ads. If your product is trendy and has a wow factor, Facebook can be an easy to scale solution for driving traffic.
But…it’s not all rainbows and sunshine. There is not a silver bullet strategy for every product or site for Facebook ads. The mix of your product, target audience, site experience, and ad creative will determine your success with Facebook ads.
Many dropshippers get stuck here. It’s not always easy to know what’s working and what’s not.
By far the most common question we see from dropshippers goes something like this…
My Facebook ads have 120 clicks but no purchases. What am I doing wrong?”
The easy answer is it depends…
There is not a perfect formula for Facebook ads. It’s not a matter of setting up 3 ad sets and two video ads, one carousel ad and magically making sales.
This guide will help you get familiarized with Facebook Ad basics and start getting sales.
Types of Facebook Ads
Types of Facebook ads
Your success in Facebook advertising depends on your objective and the types of Facebook ads you use. Producing effective, high-performing ads, however, presents a challenge for many beginners because there are so many different types to choose from.
To help overcome this hurdle, we’ve outlined five key Facebook ad formats you can use.
Single image ads are the default for Facebook ads. They are easy to make, offer a clean format for you to promote your brand, and are effective. Dropshippers often rely on video ads, but standard image ads can be very successful as well. It just requires the right creative.
Image ads are best for when you want to create an ad quickly or don’t have much of a budget. You can create an image ad right from your Facebook page as a boosted post, or if you want more detailed targeting options, you can make one in Facebook Ads Manager.
Video ads let you show off your product or brand and capture viewers’ attention in the feed. You can create video ads in Facebook Ads Manager or boost a post that has a video from your Facebook page. These ads appear on Facebook, Instagram, Audience Network, and Messenger.
You can use Facebook video ads to show unique features or tell your brand’s story. Videos that are 15 seconds or less can help capture your audience and keep them engaged. They should also have a clear call to action (CTA) at the end, such as purchasing a product or visiting a website.
Carousel ads let you include up to 10 images or videos in a single ad, each with its own link. People can scroll through the carousel by swiping left or right on their devices or by clicking directional arrows if using the desktop client.
You can use carousel ads to:
- Feature multiple products and link out to different landing pages
- Showcase different angles of one product to inform potential buyers
- Explain a process or offer a tutorial
- Present one large image across multiple frames to create a more immersive experience
The collection ad format includes a full screen, Instant Experience to make it easier for people to browse and buy your products. These ads include a cover image or video and can show multiple products underneath.
How to advertise on Facebook, step by step
Follow this Facebook ads tutorial to create, launch, and optimize your first ads.
- Setting up your Facebook Business Manager
- Installing the Facebook pixel
- Creating Facebook audiences
- Creating a Facebook ads campaign
- Setting up your first ad sets
- Choosing your creative
- Optimizing your Facebook campaigns
#1 Setting up your Facebook Business Manager
The Facebook ad ecosystem is not the most user friendly ad platform. Starting off on the right foot by setting up your account correctly will save you trouble in the future.
- Go to business.facebook.com and click Create Account.
- Enter your business name, your Facebook business page (create one first if you don’t have one), your name, and your email address.
- Create or add an existing advertising account. This can be done by choosing Business Settings in the Business Manager menu, then clicking More Tools and Ad Account Settings.
- You will be taken to a new window and given the option of adding an existing ad account, requesting access to an ad account, or creating a new ad account. If you’ve never advertised on Facebook before, click Create a New Ad Account and follow the prompts.
- Once you have completed those steps your account should look like this:
If you need more help getting your account started watch this video.
#2 Installing the Facebook pixel
Setting up the Facebook pixel in Shopify is really simple.
- Go to “Preferences” under Online Store
- Copy and Paste your Facebook Pixel ID into the field.
- Click Save
- Test your Facebook Pixel in Facebook Ads.
#3 Creating Facebook audiences
Audiences are why Facebook Ads are such a valuable tool. You can target niche audiences and demographics to get your product in front of the people most likely to purchase.
Interests, behaviors, and demographics
If you don’t have a list of past customers or website visitors to create a Lookalike Audience, you can use Facebook’s interest, behaviors, and demographic data to create prospecting audiences using the saved audiences option.
Interests relate to pages and content Facebook users have interacted with (e.g., golf, football, fashion).
Behaviors are actions taken by users (e.g., moving to a new city, getting married, having a baby).
Demographics include user profile information (e.g., parents, doctors, college grads).
You’ll want to test from all of the options available within interests, behaviors, and demographics. The Audience Insights tool can help you narrow down these options and identify categories for testing.
The information gathered in Audience Insights can be used to identify new interests for targeting experiments, as well as placements and locations that might work for your chosen demographic.
Note* The Audience Insights tool will be deprecated on July 1, 2021. It is moving to the Facebook Business Suite Insights.
#4 Creating a Facebook ads campaign
Before you start building your first campaign you need to understand how the Facebook Ad structure works. It has 3 levels. Campaigns, Ad sets, and Ads.
Choosing an objective for your campaign
Time to create your first campaign. Go to the Ad Manager inside your Business Manager account and click the Create button. You will be then asked to choose an objective. For dropshipping stores we almost always recommend choosing “Conversions”.
No matter what objective you choose, Facebook will always charge you for impressions.
It is important to tell Facebook what your objective is so your ads will be optimized to reach your goal. If you choose Traffic but are actually looking for purchases, you won’t be guaranteed to reach your goal because it was not chosen as your objective at the campaign level.
Facebook will try to get as many conversions that you have set as your objective as possible. We don’t want people that are likely to click but not purchase. We want people that are likely to click AND purchase.
#5 Creating your first ad sets
The next layer of your campaign you will need to create is ad sets. For each ad set you can define 3 things.
- Target audience
Ad sets are useful for testing audiences and placements against each to see which performs best. For example Ad Set 1 you may leave the audience extremely broad like Male/Female 18-65 with no or broad interest target vs Ad Set 2 that has a more target audience like Female 18-30 who are single with Instagram only placements.
It’s important to think about who you believe would be interested in your product and A/B test difference audiences and placements.
#6 Creating high converting ads
While audience and placements are important they don’t mean anything if your ads suck.
Think about how many ads you see on Facebook and Instagram. Most of them barely (or don’t at all) catch your eye.
You have a split second to grab your customers attention and get them to engage with your ad.
No matter what product you are selling, the key is to sell the problem your product solves. This idea is summed up with this simple quote: “Noone Wants a Drill. What They Want Is the Hole”
Here are 5 tips to keep in mind when build your ads:
- Keep Your Ad Copy Short – (posts with fewer than 80 characters earn 66% more engagement than longer posts)
- Give Your Audience Fewer Choices – more decisions, more problems. Create unique ad copy for each of your featured products, rather than trying to cram them all into a single ad.
- Keep Your Discounts in Dollars Rather Than Percentages – discount codes and coupons can boost conversion but dollars speak more than anything. If you have a coupon code use the dollar value. Ex: “Save $5 when you use coupon code XYZ at checkout”
- Use Text in You Images – Stylizing your images with text and graphics sharply increases conversion rate. Here’s an example:
- Show Your Product in Action – Actions are stronger than words. Show how your product works to make it easy for the customer to understand.
If you are intimidated by Facebook Ads or Google Ads then using an influencer for a paid post can be an easy way to get traffic for cheap.
But…beware it’s not as easy as finding a profile with a few thousand followers and getting them to post some crappy ad.
Just like anything, it takes time and effort to be effective.
What products sell with influencers?
Products that have a strong niche focus are usually a good match for influencer marketing. Ex: matching a piece of exercise equipment with an exercise influencer.
More general products are more difficult to sell with influencers since it’s a shot in the dark if their followers are actually going to be interested. In addition if the paid post looks like an ad unrelated to their usual content their followers are significantly less likely to engage or purchase.
How to find an influencer
There are tools like BuzzSumo Influencer Finder that can help you find influencers in a particular niche. You can also dig around in social media platforms manually and quickly find accounts.
Start by creating a spreadsheet (or use this free template) to store accounts and metrics. This will help us find and track which influencers have the best engagement.
The main metric we will use to find influencers is engagement rate. This metric will tell us which influencers get the most engagement on their posts. The higher their engagement the more likely a paid post will generate clicks and purchases on your site.
ER post = Total engagements on a post / Total followers *100
Follower count while important to determining the size of your potential reach is secondary to engagement rate. The follower count will often dictate pricing for sponsored posts. Find the best mix of engagement rate and follower count. Generally influencers with 20k – 150k are the best bang for your buck.
Next, go to whichever social media platform you plan on using and start browsing hashtags and accounts in your niche. Look for profiles that post consistently and have lots of likes, comments, shares etc. on each post. Just because an account has a lot of followers doesn’t mean they have an engaged audience.
Influencers will often buy followers to make it appear like they have a huge audience when in reality they only have a small amount of active fans. Avoid these types of accounts like the plague.
Negotiating with Influencers
Once you have found a few influencers with good engagement rates it’s time to get pricing. Their profile will often have an email or instructions to get advertising information. If not just send them a direct message.
Start with something like this: “Hi [name], i’m interested in partnering up for sponsored posts. I think your audience is a great fit for our product. Please let me know if you’re interested and if so what sort of pricing you have.”
Most influencers will respond to the first message, but if they don’t just send a couple of follow ups.
Using the Right Creative
Your ad should feel like a normal social post from the influencer. If your post looks like an ad their followers will quickly skip over it, but if they feel like the influencer is actually suggesting your product they are way more likely to purchase.
Here’s an example from Pro Disc Golfer Brodie Smith doing a paid post for a smart watch.
Notice the image is of him playing disc golf, similar to an image he would usually post, and is not just a picture of the watch. Along with the image is ad copy that’s written from Brodie’s point of view.
Keys to Successful Influencer Campaigns
- Only work with influencers with a high engagement rate
- Send the product to the influencer when possible
- Create posts that looks like the influencers normal content
- Track engagement and ROI for each sponsored posts
Google Ads is one of the best ways to scale your store and maximize return on ad spend. Since you’re serving ads to people actively looking for a product the conversion rate is generally much higher than Facebook or other social ads.
For example, someone searches for “portable blender”. The entire screen is filled with Google Ads. Depending on the product and niche the CTR for these ads can be up 35%.
The downside of Google Ads is that you have to rely on search volume to drive quality traffic. If no one is searching for your product, then Google Ads is not going to work. If you’re not sure how to tell if your product has search volume you can use the free Chrome plugin from What’s My Serp or use the Keyword Planner tool in Google Ads.
Setting Up Your Google Ads Account
We aren’t going to deep dive into Google Ad strategies in this article, but we will cover the basic setup and give you a starting point for testing Google Ads. If you want a deep dive into strategies check out this guide from WordStream. If you want a step by step video then follow this guide on YouTube.
Step 1: Create your Google Ads account.
Create your Google Ads account here. If you need help getting setup this guide will answer any questions you have.
Step 2: Google Merchant Center
Ecommerce sites must set up and link a Google Merchant account to create product feeds. Create your Merchant Center account here.
Step 3: Link Google Ads and Merchant Center
Merchant Center Is where you will manage your product feed so to get the data into Google Ads you have to link them. Follow this guide from Google to link your accounts.
Step 4: Add Products to Merchant Center
If you have one product you can simply add the product info in the Merchant Center. If you have multiple products you want to create a product data feed. This guide takes you step by step on how to create a data feed.
While Facebook, Influencer, and Google Ads are the most common marketing channels for dropshippers there are several other channels that can make your store profitable. Rather than deep diving into each this guide will give you a quick intro to other channels that you can test.
These channels effectiveness will depend on your product and own marketing prowess. If you have experience creating engaging ads then trying out new channels can be a good way to find new ways to scale your store. If you have never run digital ads before then sticking with more tried and true is your best bet. There are hundreds of videos on YouTube that can teach you how to run Facebook, Influencer, and Google Ads. Get comfortable with the most common channels and expand from there. Don’t reinvent the wheel.
As you start getting traffic to your store you will quickly start gathering customer emails. Even if they didn’t purchase, sending abandoned cart offers or sale discounts can be a simple way to retarget and grow traffic that has already been exposed to your brand.
SnapChat has over 265 millions users, most are 30 or younger. If your product has a younger audience then SnapChat can be a lucrative channel to scale.
TikTok has a huge user base and in many head to head tests has much better economics than Facebook ads. If you’re having some success with Facebook but not hitting a good ROI perhaps testing TikTok can put you over the top.
Organic search is extremely lucrative if your product has a large search volume, but it can be incredibly competitive and difficult to rank for a keyword. It’s a long term strategy but can pay off big.
Bing only makes up a relatively small portion of search compared to Google Ads, but if you have success with Google Ads then Bing ads can be another way to scale your search campaigns.
As your store grows and you do your part to keep customers happy it only makes since to ask them to refer friends and family.
Affiliates are similar to referrals except you are counting on a site or person to send your site a lot of sales. For example, if you sell a campaign tent you could pitch an outdoor blog to write a review about your tent and give them X dollars of sales from their link.
Pinterest has 300 million monthly users, including one the most active affluent audiences according to WordStream.
Reddit is a conglomeration of very specific niche communities. Your product will most likely appeal to subreddit or groups of subreddits that you can leverage to drive low cost clicks to your site.
While not quite as ecommerce friendly as other channels, Twitter can be a great tool to grow demand for your brand.
Enough Reading…GO GET STARTED!
99% of people fail at even getting started. Don’t wait until the timing is perfect. Don’t spend weeks or months spinning in circles over a product, domain name or whatever else. Start your store and learn.
You may not hit out the park on your first try (It would be shocking if you did) but you will learn and you can turn your dropshipping side hustle into an extremely profitable business.