Dropshipping is one of the quickest ways for many retailers to get started without spending a ridiculously large amount of money on startup costs. However, for those who are still new in the world of online marketing, specifically in eCommerce, getting your hands into this retail fulfillment method can be daunting just as it is disastrous.
In this episode, Brad Costanzo sits down with Anton Kraly of Drop Ship Lifestyle to serve you sizzling hot advice on how to do drop shipping the right way, most especially if it concerns high ticket products. Anton shares how you can build relationships with manufacturers, identify pricing, market online, and more so you can serve up those products to your customers without missing a heartbeat.
Some Topics We Discussed Include:
To learn more about Anton and get some sizzling hot advice on how to do drop shipping the right way, visit http://www.dropshiplifestyle.com/.
Anton Kraly is a serial entrepreneur with over 15 years of experience building online businesses, including Drop Ship Lifestyle.
Voted “Best eCommerce Course” by Shopify, Drop Ship Lifestyle was created to give students the knowledge and tools necessary to create freedom through entrepreneurship.
Listen closely as Brad asks a series of specific and actual questions that get to the heart of a successful dropshipping business.
I'm going to talk about one of the hottest topics in all of the business marketing and some of the hottest opportunities out there and that has to do with eCommerce specifically dropshipping.
If you are new to the world of online marketing especially eCommerce, you may not understand what the word dropshipping means. It is one of the quickest ways to get started.
It's one of the easiest ways to validate a product and to do it without spending a ridiculously large amount of money on startup costs. If you are familiar with dropshipping, we'll go into the definitions, you also may have some concerns and some things that you want to be careful with.
A lot of people get into dropshipping. They screw it up and they don't do it correctly. They end up wasting a lot of time and money because they thought that you could find any old thing out there, throw some traffic at it, have it sourced from China and you're making millions and millions of dollars.
That's not the case. I know that's not the case because I've been around the block on this stuff. I've tried some of it myself. I've had some success. I've had some failures, but that's why I reached out to Anton Kraly from DropShipLifestyle.com.
I asked him to come on the show and discuss the right way to do dropshipping and to do it in a way that makes sense. That is scalable and you can build a real sound business without hitting any of the landmines.
Anton is a serial entrepreneur. He's got several years of experience building these online businesses, including Drop Ship Lifestyle. It was also voted the Best eCommerce Course by Shopify.
It was created to give students the knowledge and tools necessary to create freedom through entrepreneurship. Anton, welcome to the show.
Thank you, Brad. I'm happy to be here.
Drop Ship Lifestyle, I want to find out a little bit more about your history in eCom, dropshipping in particular because it sounds like you've had some good success. Did you start DropShipLifestyle.com to help shed light on this for other people?
Yeah, that's right. In 2007, I had my first online store. Drop Ship Lifestyle, I started it in late 2012, early 2013, somewhere around there.
What was your first online store? What were you selling?
If you go way back to the beginning, I was selling cookies online. I had a relationship with a bakery in Brooklyn, New York. That was my first actual business. I had a delivery route from them. I delivered cookies around Long Island.
I've spent $25,000 for the right to do that. I bought a van. I bought this business, territorial rights. I didn't like that business at all. I got sick of it fast, but I was 21 years old. I had every dime I had into it plus more.
That's when I first heard about eCommerce and thought, “Let me build a website called New York Cookie Shop and see if I could sell these things online.” That was the first eCommerce store I had.
What was the first successful eCom store you had?
Honestly, I would consider that one successful compared to the other option, which was that offline delivery route business where I would drive around all week to these grocery stores and try to sell them boxes of cookies that they sold to customers.
The online store within a few weeks, that one cost me $29 to start instead of $25,000. I set up AdWords to it. I uploaded products. Within a few weeks, it was making a lot more money than that offline business. That's what got me hooked.
From there, I thought, “If I could build a website. If I could run AdWords,” because that's how I was getting all my traffic back then, “Why can't I do it with more expensive products?”
Instead of selling $20 boxes of cookies, why can't I sell a $5,000 range for your stove topper? Why can't I sell anything for your house that people buy between $500 and $2,000? I started at that point importing products from China and going upmarket in every industry and selling more and more expensive things.
Let's back up for the audience's sake and let's define dropshipping.
In 2018, it was one of the hottest opportunities. You see it everywhere on Facebook being promoted. You see people talking about it on YouTube everywhere. It seems almost like it's this new thing. It's been like forever.
The first dropshippers were people that sent out catalogs to different businesses and had products in those catalogs. You get the term product catalog in every eCommerce store now. People would call the catalogs and say, “I want to order product ABC.” They'd say, “Great. What's your credit card number?”
They would call the supplier or the manufacturer of that product and ship it to that customer. All dropshipping is from a 30,000-foot view is a way to fulfill orders. It doesn't even have to be online. It's simply a way of getting a product to a customer.
As retailers, which is what I consider myself, the goal is to build the store and to get the customer. We do that. Once that part is done, we have that order fulfilled by a manufacturer or a brand because we go direct to the companies that produce these items.
The other way to do it is to import the staff, to warehouse it, to take care of shipping yourself and to handle all of the fulfillment. I know in the early days that could be a big commitment.
Let's say you find a widget that you want to sell. You can either source it in the US. You can source it overseas. You can spend a whole bunch of money to get it over here. That's one of the things that's always caused me a headache before I even started.
I'm a big believer in validating something before you sink a whole lot of money into it. Dropshipping is a terrific way to validate a product idea for a little money.
Not even the capital outlay but the risk. Even if you have the cash, you're still taking on that risk. When I started transitioning from the cookies and whatnot to more expensive products, this was before I even knew what dropshipping was.
I built websites and I listed lead times on different product pages for several weeks. We would collect the money and order these products from China, have full containers come in. It was because one, I didn't have the capital. Two, I didn't know what would sell. It's a risky business model.
At any given time, you have $50,000 of customers' money sent to China waiting on products to arrive. That's how I started. I wouldn't do it again now that I'm a little bit older and wiser. It's definitely risky.
For my audience, we gave you a brief overview of it. I'm not going to try to talk way over your head if you're new to this. At the same time, I've got some very specific questions that I want to ask.
I will encourage you early on that if this already sounds like something you want to do, but you need more of a primer on it, Anton's got some amazing information at DropShipLifestyle.com. I'm going to start to ask questions that will impact me, my clients, my business partners.
It may go over your head a little bit, but I want you to pay close attention even if it does. These are the questions that I'm going to ask, which are the ones you don't typically see, like when you're reading blog posts about this and watching for YouTube videos and all of that other stuff.
I invite you to eavesdrop on the conversations. Anton, I've got a very specific one. I'll even explain to the audience exactly what it is and they can hear you giving me some advice on what you would do. Let me give you some rapid-fire questions. With dropshipping, what is your business model?
I'm not talking about as you're teaching it, but you're going to launch a new dropshipping store. Are you typically using dropshipping as a way to start it off and validate it?
Is that your actual business model? Do you do it to start it off and say, “This is working well. Now I'm going to go import, fill a warehouse and all this stuff myself.”
I go into it assuming that 80% of the business revenue will come from simply having relationships with manufacturers and brands in that industry so dropshipping. That's assuming that. If I find that something takes off and the store is doing well.
I can identify over six, nine, twelve months a few bestselling products out of usually thousands of SKUs, there's a good chance that I will form my own brand and private label a few of those top-selling products
I know you don't want to get too outside of this and too advanced. I say about 80% because we also do lots of other things since we do build niche specific stores. I'll have a standup desk store.
What I'll do instead of selling stand up desks to my audience, to the people that find us, to the people that buy from us, to the people that opt into our email list. I'll also promote other affiliate offers to them for things that they might be interested in.
That makes up a smaller portion, but definitely extra revenue for our business as well. There are three ways to monetize, but the majority is those relationships we have with the manufacturers that make the products we want to sell.
Do you usually start with a niche-specific where there are a whole lot of products that you can add in there? Do you oftentimes start with a product by itself and say, “This is something I can sell?”
With a niche, for example, if I wanted to sell stand up desks, I'd have a stand-up desk store. If I wanted to sell surfboards, I'd have a surfboard store. All smaller things that are related to it, we will have product add-ons and upsells and whatnot.
We stick with that product type. Once we know that product type, let's say it's surfboards. I'd want to find every surfboard manufacturer there is and try to form relationships with all of them individually so I could sell their products.
Some of the examples you've given here are a little bit of higher-ticket products. Do you try to stick to higher-ticket dropship stuff or do you go for stuff like $50 and under?
I'd say at the minimum $200. Usually, we try to be higher. Our average order price is usually over 1,000 on most of our websites. The reason we do that is because with dropshipping, your margins aren't going to be as big as if you had a warehouse and had all your own product lines and whatnot.
It doesn't mean you can't make money. It definitely can work. If you're trying to sell $20 items, you're on the dropship model and you're trying to buy traffic, which is how we get almost all of our sales, where we're paying for traffic. It's next to impossible if you're going to make $5 on an order to have a business.
We say minimum we want to work for is 20% margins. We're usually higher on our own stores, but that's a rule of thumb we give to our students. That means if they're selling a $200 item, they're going to make at least $40. If you're selling $1,000, you want to make at least $200 net profit.
That's after the cost of goods sold, after shipping, after your ad costs. On a $20 purchase, you're going to make $2. What's the point?
What's a higher end of the margin that you're able to get? I know it depends on a lot of things. Is 20% being the low end?
We'll use that surfboard example again. If I had a surfboard company and you wanted to sell my surfboards, let's say your wholesale cost to me was $500. Chances are the minimum advertised price for that product. That would be what you sell it at would be double that. It would be $1,000.
You start with 100% markup on products. What your margin comes down to is how cheap can you acquire a customer for? What are your overhead expenses? Your margin from your suppliers isn't going to be 20%. If that was all they gave you to work with, it wouldn't work. It's usually much higher.
What you can get your margin to be is your cost to acquire customers. As a general rule of thumb for our businesses, for our own stores, we try to keep our return on ad spends to be about ten to one. If I'm going to sell a $1,000 item, I'll spend $100 to get $1,000 sale.
That comes out of that profit margin. Things like if you have staff, the software that you use to power your businesses. Typically for us, we'd like to be about 30% net profit. That's everything paid. 30% net is always our target in our own businesses.
For our students that are trying to figure it out that doesn't do everything for lead value optimization, have upsold and had affiliate offers in their business, 20% is a good starting point.
Do your suppliers typically give you a minimum price that you have to sell it for so that you're not?
It's a minimum price that you can't go below. They do give you that. The big reason that the way that we do dropshipping and other people do as well, but the big reason it works is that it's not like a race to the bottom in terms of pricing because those prices are locked in.
We'll use that surfboard example again and let's say you want it to sell Anton surfboards. I said, “Here's our new retailer application form.” In that application and in that paperwork, you would have our price lists for Anton surfboards and there would be three columns of prices.
The first one would be wholesale, which is what you would pay to me for the surfboards. The next one would be MSRP so Manufacturer's Suggested Retail Price, that's the highest price that no one ever sells for. That's the one that you'll usually see on the website being crossed out. We strike-through on it.
The third column will be MAP, which stands for a Minimum Advertised Price. That's the one that 99% of people selling these products will sell for. That's the one that's usually 100% markup on wholesale.
What's good about that is if you want to sell my surfboards and five other people did too. It's not a matter of how low do you guys want to go to get the sale. It's everyone going to sell for this price. If you want to stand out, it's got to be for more things than the price.The goal of a retailer is to build the store and to get the customer. Click To Tweet
It's not going to destroy profit margins within a few weeks, which is what happens with suppliers that don't enforce pricing policies.
I couldn't necessarily get your product and put it on my Shopify store and say, “I'm going to sell it for the wholesale price,” as almost like a loss leader because it's going to screw everybody else up.
It screws everybody. A good way for people to get this concept if it's new to them is picture Apple products like an iPhone. If you want an iPhone X, it's going to be the same price at the Apple store, Best Buy, Target and AT&T.
If you're not getting a contract, it's the same price everywhere because of these MAP policies. If Target said, “We're going to sell the iPhone X for $400 because we want all the customers,” that would make the iPhone X now a $400 phone.
It would diminish the brand value. It would make everyone else stop wanting to sell it. That's why these policies are in effect. They do protect both brands. Everyone's selling for the brands, the retailers like us.
I'm circling this because I want to circle back to it on a strategy. This is important. I want everybody to pay attention because I want to see if what I was thinking is even possible. I set up a Shopify store and I want to sell widget or kitchen supplies, whatever.
I find a manufacturer or I find a supplier. Is there a way to get an even lower than traditional wholesale price? This oftentimes depends on what you're selling and who your source is. If you have a physical location versus you're somebody who's going to do dropshipping, etc.
That oftentimes you can get lower than advertise wholesale prices. Are there any tricks to the trade of getting the best prices?
That's a big part of our quarterly reviews that we do in our businesses as well. One thing you mentioned in there like physical store versus online only. That is true. I got to say it's rare. I've definitely seen it before with some industries.
It seems to be niche-specific were some industries, for example, baby stuff like cribs and strollers. They'll give people that have retail stores much better pricing on the wholesale side. I have seen that. It seems to be an outlier thing. It's not everywhere.
As far as the pricing that you'll get from the suppliers, it'll either be straightforward. Here's your wholesale price list. Sometimes they'll also give you another sheet in your new retailer packet that'll show, “If you sell X amount of units of this thing, we'll give you 10% off your wholesale price.”
If you go up to X amount of units, we'll give you 20% off. Most of the time that won't be there, but that is something you'll occasionally see.
Even with all that being said, it's definitely possible because remember your relationships are directly with the manufacturers, with the brands to negotiate with them. We do it all the time, especially around any big holiday.
For example, people always do promotions for Memorial Day. What we do is reach out to our top suppliers and say, “We are doing promotions for our store. Can you give us any better pricing so we can bump your products up higher on our pages, include links to them on our website?”
More often than not, if you have a relationship, they will give you a deal. Let's say, “For all the orders you place in June, we're going to give you 10% off your wholesale price.” Around the holidays, it's the same thing.
Because if you position it in a way that, “I'm going to put you to the top of our website and I'm going to push your products the most to our customers.” It's definitely possible to get discounts because it has that direct relationship.
If you are going to them, and let's say you're not drop shipping, but you're looking to buy 1,000 units or something in warehouse, that is one way to get cheaper as well.
That's one way. We've used that too. We don't like to do that often. Let's say you sell for twenty different suppliers in one store. You know there's one product that drives half your revenue. It's your bestselling products.
What we'll do when it gets closer to the holidays, especially Black Friday and around Christmas, there's a good chance that your supplier will sell out of those products.
That's when you can use that move like, “I want to make sure that we have this inventory and maybe I want 200 of these things. Can I buy them now? I'll pay you for them. Can I get a discount? You still keep them in your warehouse, but I own that inventory.”
You're prepaying them for the product they already have. They're storing it for you because they're still going to dropship it. Now your money is for them. You got a discount and your inventory is secured. That's one way you get to play with that as well.
Do you typically go straight to the manufacturer and the main company or through distributors?
No, every time goes direct. There have been instances where we have worked through distributors, but it's not a good process. First of all, there usually are extra fees involved. The margins are usually smaller. There's usually not pricing controls.
Some industries like we've seen with medical equipment, a lot of that you have to go through distributors. For most industries, you can always get a connection directly at the brand itself, which is always the way to go.
Do you oftentimes source from overseas and dropship from China or somewhere else? Do you always try to dropship from the US?
For me the US because this is where my businesses are based for Drop Ship Lifestyle. We have students in Australia. They work with brands that are in Australia. We have students in Germany. They have suppliers in Germany. We keep it domestic sourcing.
Typically like you recommend the higher ticket stuff. This is not like the little tchotchkes you source for a couple of bucks.
No. I did start with cookies and whatnot. That was a less expensive item. Even over the years, I have tried some of the less expensive products in the $40 to $50 price range. What's happened every time I've played around with it and see what I could get out of the business, it's the same thing every time.
It looks exciting, a bunch of orders comes in and the revenue is good, but at the end of the day, you're dealing with too many customers. It's a different business. It becomes a customer service and customer management business when you're trying to process thousands of orders a day.
I'd much rather have maybe a few dozen customers a day to make the same amount of money as 1,000 or 2,000 units of a $50 product.
I'm with you. I love the bigger ticket things. I'd much rather have bigger sales. That being said, this is a competitive advantage. We'll use stand up desks because you use that as an example and I am a customer of those.
With bigger ticket stuff, I'm imagining that the consumers are doing a little bit more research. It's not an impulse buy. They're a little slower to buy it. It doesn't sound like somebody with a dropship business can necessarily compete at the lowest price.
You can probably match the lowest price. These days with Amazon and everything else, it's hard to be the lowest price. What is it that you do when you're sending people to a standup desk store, any store, in order to encourage them to buy from you, an untrusted source if it's the first time.
I buy from Amazon because I know Amazon. I trust them. That's the number one thing they've got going for them is the trust factor. If you're not competing on price and it's hard to compete on trust, how do you make people choose you over the competition?
A couple of things as far as pricing goes, you will technically be the lowest price, but that's because everyone will be the lowest price because everyone sells for at the minimum advertised price. You're not competing on price.
You don't have a competitive edge on price.
It's all the same there. Some other things you mentioned, which are totally true though. When people find us, the only time we want them to find us is when they are at the very bottom of the buying funnel. We don't want people even coming to our websites.
If it's free, why not? If they're coming to us and we're paying for it, we want them to know which stand up desk manufacturer they want to buy from, what size they wanted in, what SKU number it is, what color it is, and they're trying to decide with their credit card on their desk. Where should I choose?
That's the type of people we want in our stores to begin with. Once they're there, it's our job to get them to become a customer. There's a whole bunch of things we do. Some of the bigger ones could apply to everyone. We like to use urgency and scarcity because those are the two biggest drivers of conversion.
We do expiring coupon codes on our websites that expire every Wednesday night and every Sunday night at midnight. Whenever anyone finds us, within a few days, they're going to see a coupon code everywhere on the website that they can use for the next few days.
Again, these are people that are ready to buy anyway, so it makes them first think like, “Am I going to buy this in the next few days maximum because that coupon code is about to expire?” That's the first thing, trying to get them to choose us.
What discounts are you typically, like 10% off?
That'll be the maximum. It depends on the store. Usually, it’s about 10% off. Sometimes it'll be free shipping, but that's not the typical thing. Sometimes it's 5% off. It depends on that store's profitability and on how well our ads convert and what our relationships like with the suppliers on that store.
As you said, expiring coupons with urgency and scarcity. What was number two?
The next thing is one advantage we have on anything we build over someone like Amazon is because we do build these niche-specific stores. We can give that person an experience that speaks to them. If it was a stand up desk store, the product page would look like a sales page for a stand up desk.
It wouldn't have the stock manufacturer photos and the little three sentences that they wrote up. We would explain to the person why this was the perfect standard desk for them. We would get unique product shots on there. We would most likely have a video that walks them through how to use it.
We would have reviews specifically for that stand up desk and turn it into a whole experience. What you'll find with a lot of the companies that do the business model I'm speaking of, what they do is get approved to sell stand up desk ABC.
Copy the two basic photos, copy the one basic description of it, don't even make any features and don't make an effort. We do our internet marketing skills and make it into an actual like little sales page that stands out when you mix that type of thing with the expiring coupon codes.
We also have, which most people do now, great support in all of our stores. We have a live chat that doesn't say, “You have a question for us.”
In that case, say something like “We're the stand up desk specialists or speak to a stand up desk expert,” something like that to make it connect with that person.
It's customer experience.
It's about that. The reason some retail stores are still around when everything can be bought online is that people want to go to them and have that interaction. It is all about the experience. We try to bring that online.
It's qualitative versus a quantitative thing. People are going to buy from you because they have the best experience coming to your site like, “These guys answered my questions,” etc. The bottom of the funnel, which for if anybody doesn't know what that means.
If you're at the top of the funnel, people aren't aware that they're not necessarily shopping for your stuff, but maybe they stumble across a cool Facebook ad or something like that. They're like, “What's this? It's interesting.”
They start down the path, the bottom of the funnel. I already know I want this. I haven't decided which one at what price or from what store.
I'll add one thing to that too because a lot of times they are looking for the best deal because, by the time they find us, they know they want it. If they could find a site that looks trustworthy, having reviews, have it look professional, have actual support networks, they'll probably choose that.
Something else you can do not to get around but to make MAP on your site seem better than someone else's. Let's say I was selling a $700 stand up desk. I could not buy breaking MAP technically include something with that purchase that made it a no-brainer.
If you buy the stand up desk from us, within the next few days, I'm going to include computer mounts or I'm going to include a cable holder for behind it you don't have cables all over your desk. You can include bonuses like that and it might cost you as the business owner $10 to $20.
That $10 to $20 as a bonus gift for the purchase could easily convert a lot more $700 sales. We do a lot of things like that too on our bestselling products.
If you're going for a lot of that bottom of the funnel as well, is a lot of your traffic coming from Google? Both Google AdWords as well as Google Shopping versus something like Facebook, which has a lot more top of the funnel.
Facebook is amazing for retargeting, but the majority of your front-end traffic, are you getting that from which channels primarily?
Our highest converting source of traffic has been for the past decade now and it still is, but Google Shopping is by far the best. Behind that organic, but we're not doing a lot for SEO besides onsite stuff.If you're not competing on price, it's hard to compete on trust. Click To Tweet
All those long-tail product names, brand names, SKU numbers, we're ranking for things like that, which converts great search text ads on Google. We do, but only for our bestselling products to have more placement on the front page of Google.
If you think about it, and for anyone that doesn't know what Google Shopping is, if you go on Google and type in any product, you're going to see product pictures, you're going to see store names, you're going to see prices.
The people that click those, they're buyers. They know where they're going. It's an effective ad type for eCommerce stores.
We've covered a little bit about sourcing. We've covered a little bit about traffic. We've covered a little bit on the conversion and how you make your stuff stand out, etc. We've talked a little bit about profit.
You mentioned a 30% net profit. That's typically what you're trying to get and shooting for. That's after ad costs? That's after everything.
It's every single expense.
I do know that one of the things that some of my eCom friends have stumbled into, especially not so much with the dropship. When they're sourcing their own products is that they've got high gross revenues, but their profit margins are absolutely dismal, like 5% or sometimes less.
A lot of that has to do with sinking money back into inventory costs. With your dropshipping, you don't have inventory costs because that's the whole nature of it.
You may have a lower overall margin gross margin, but you don't have that issue. I've seen people grow to death because their demand outstripped their ability to finance inventory.
That's a huge thing. When I say our margins are 30%, that's calculated. It's because we know that's where we want them to be. We're making sure we're constantly monitoring our biggest expense besides the cost of goods sold, which is our ad costs.
Easily tomorrow, my margins could be negative 20% if I didn't watch my Ad Words account and went in there and update all my budgets, 500%.
What you make out of this, because the margins that you have, your gross margins between your product price and your wholesale costs, those are high no matter what.
It comes out to how many expenses you add to the business. The cost of acquiring a customer is the biggest. That's why you got to be so careful with that especially when people want to scale. I know when I started, I was not good with tracking what was converting for us.
Luckily back then it was a lot cheaper to advertise. I had a lot more leniency. Once I finally figured out the whole eCommerce for the analytics tracking system, I realized like, “I'm spending a ton of money on ads that aren't making any.”
The business was still profitable because back then it was much cheaper. Now, if you're not on top of that, it's very easy to take a store that maybe I can get a 30% margin on and to be losing money on because it comes down to your cost to acquire new customers.
It does. I want to circle back now regarding the low-cost prices. I've seen a version of this done. I've liked it and it made me think about some of the opportunities here in regard to a buyer's club. You may have a lot more information on this than myself.
One of the sides they came across was in a specific niche that does have a lot of repeat purchases because there is a consumable product. It's not something you ingest. It's something that you need to replenish. It was like an eCom store behind a membership site.
Think of it as a private site that you come in and the whole point of it is to get this product at wholesale cost. They probably mark it up a little bit. In general, if you looked at the product inside their membership area, you paid $10 a month to be in it.
You look at the product inside the membership area and you go search that exact same product elsewhere on the web, it is definitely a lot cheaper, sometimes 25% cheaper. I've seen it as much as 50% cheaper. It did look like they were selling it at breakeven.
That individual product is not being publicly advertised, but it's privately advertised and members only. It was interesting because I was talking to the owner. He's like, “Yeah.” What's been genius about it is that we don't care about making money on the actual sale of the product.
These are not high-ticket stuff. This is lower-ticket stuff. We don't care as much about making money on the sale of the product. We want continuity because continuity is a lot of fun. It improves their valuation.
I thought that was a pretty genius as far as creating a members-only Shopify site with your entire basic premise is you're going to get this stuff at wholesale cost. I want you on continuity.
A, are you familiar with that exact model? B, do you have any other insights on buyer's clubs or this whole concept that I brought up?
I am familiar with the business model. I know people that have or that have in the past or have businesses like that. I personally have never done it. I would say I do like it though.
The things you're talking about, what's great about them is since they're usually based around different industries, that type of thing when you're making money on the continuity. Even though it is that lower-ticket product, the margins come from the technical info side or the membership side.
You can acquire a customer and let's say you made your $10 right away, that's $10 profit and next month it's $20 profit a month or $30 profit. I do like that business model.
Especially now with the ability to do things like build YouTube channels and have Facebook groups with likeminded people that all know of this buyer's club. It's a great business model. I haven't done it personally, but I liked that one a lot.
It's one of the things that I do know for a fact because I've bought some websites. They make acquisitions. I've sold some website businesses. I do know that if you have continuity in your business, continuity is the Holy Grail. That's what everybody wants.
If you can create continuity, your valuation when you go to sell your company is dramatically higher than if you always have to make one-off sales. I love the fact that you don't necessarily have to focus on other stuff. You're literally saying this is the cheapest way to get it.
You got to join the club to see behind the curtain. Have you done any other types of buyer's clubs and not exactly like that in the past? I know there's the whole subscribe and you save a little bit of money option.
Not specifically, it's not the same, but the closest we have done is when we've sold to a different type of trades and whatnot. We formed relationships with different trade organizations where we give discounts to everyone that's part of XYZ Club or association.
Not that they paid for, it was more of a relationship. I haven't. I know people that are doing this and doing big numbers. One of the benefits, like a dropshipping store, the way I built them without continuity. The average sale price they're going for is about 30X monthly net.
That's the normal valuation. When you add continuity behind that, it definitely goes way up from there. It's a huge plus side if you build the sell, which is something we do as well.
Are they going for 30 times?
It's 30 times monthly net profit so net. If it made $5,000 a month, $150,000.
I was thinking 30 times annual. This is a random question. Shipping costs, do you offer free shipping?
Yeah, all the time. If that site is getting the expiring coupon code being free shipping, that will be the coupon code. That's rare. The reason we offer free shipping everywhere is that that's what everyone does.
If there are five other stores selling the same thing and we say, “Give us $100 to ship it.” They're not going to choose us.
People are being conditioned with Amazon especially to not pay for shipping. I don't know if you've ever tested this, but one of my close friends and a former guest of the show is a guy named Ron Lynch. He lives in Austin. Have you come across Ron?
He's one of the top infomercial guys out there. He sold $3 billion or $4 billion on Direct Response TV. I had an amazing interview with him a few years ago where I went deep like this and a lot of the things.
I know one of the things he said that they tested with big money was that when you say free shipping versus we'll pay your shipping, we pay your shipping ends up converting a lot higher.
Yeah, definitely. I'll add to that, I 100% agree, especially if you're in an industry where your competitors are paying for shipping. You come out and say it that way rather than saying free shipping. Some of the things we sell are big, heavy items. Some of them are going to offices, some to restaurants.
There are different shipping options. You have free shipping. You have upgraded like a white glove delivery service. What we'll say on some of our websites are, “We'll pay for your white-glove delivery.”
They know that our competitors are going to say, “Give us $200 extra for that,” where we say, “We'll pay for that.” It converts like crazy. It's a great tip.
What about support because your support team is limited on what support they can give. How does that typically work? Let's say I'm selling desks. I'm selling it through Bob's Desk Supply. How does that work?
They're sending a support ticket to my company. I have got to go figure out what the hell is going on. Is that a big issue or is there an easy way around that?
When you first start out in a new industry, it's a big issue because like in any business, you to have to learn it and see what people are asking about. Like any other business, the longer you're in it, you realize people ask the same things over and over again.
We focus on having great internal resources that our team can use for support. It’s also having our website, one of the things too. How to get people to choose us, we know what questions people are going to have before they ask them.
We can update our product pages to give them all the answers that our competitors might not because they're doing basic copy and paste product uploads. It's a process to get it right. After a few months with any traffic to your stores, you'll figure out 95% of those questions have answers ready to go.
When they ship it out, do they send you tracking information, etc. to pass on?
There's a way to do that. Now is the part where I've got some selfishly personal advice. I bought a business in the home beer brewing market. It gets a lot of traffic, about 60,000 visitors a month organically. It's an authority site. It's a blog. It sells courses and affiliate offers.
The one thing it did not have until I bought it was it was an eCommerce platform. Everything is WordPress. I put Shopify on the site. We've had a handful of sales and testing some stuff out, some print on demand t-shirt related stuff.
However, in this market, which you told me you'd done some good research on home beer brewing. It's probably a great market, especially for a high-ticket because most homebrewers are buying gear stuff.
They're buying consumable, everything from certain things like yeast and ingredients that go into beer. They're also buying all types of kits, gear, Conoco for mentors, work chillers and all these things that I barely even know the name of.
I see it as being a pretty right market, especially because our site has a lot of built-in trusts, organic reach, etc. They're coming into our site to learn the how-to and for instructional stuff. It's an absolutely perfect way to add a dropship eCom aspect onto this store as well.
There are a lot of stores around the country. I have not started to look at the best suppliers because most of the suppliers that I see are the sites that we send to as an affiliate.
I'm guessing that those probably are not necessarily the best suppliers because they're probably getting their stuff from somebody else as well. Is there anything that in your research that you looked into that you would make any recommendations for?
The other thing is I don't want to have a dropshipping store that has everything under the sun, death by a million SKUs. There's easily some stuff that we can do to find the bigger ticket and the most commonly purchased products.
What would be your advice on the best way to get that off the ground and running? Granted, we've already got the Shopify store set up. It's finding the right sources and doing it in a way that people buy from us versus the competition.
What I saw when I was looking into that is a lot of the other eCommerce stores out there, they sell these kits. They have a beginner-level kit, maybe a mid-tier kit and a premium kit for the person that wants to build out their whole garage into a brewery.People are going to buy from you because they have the best experience coming to your site. Click To Tweet
I thought a good way to do it was do the same thing and have maybe three different options, three different tiers. Are you starting out? Are you experienced and watched something like, “I can make X amounts,” or do you want this master lab?
Have three different products on the website that are a combination of everything needed to put that kit together.
The way I was thinking of doing it, which I would definitely recommend since you have that audience already, if you could find those product groupings at good price points for three different price points like that.
I would go ahead and try to find someone from the community that is part of the website already that has an experience that seems like a good writer. That seems like they actively either post or comment. I would try to ship them one either at cost or maybe for free.
See if they could do different videos, assembling it, a video showing how to use it, a video brewing different beer with it. I would use all that content in the community, share it and hope that person shares it too.
They want to be part of it and build out three different products around that. From there I would have everything that's included with those kits as replacement parts if they needed, but that would be a hidden section of the store.
From there where I saw the big opportunity in that industry was the actual material people need or the supplies they need to make the beer. When I was thinking of it, I wasn't thinking of it as much as a buyer's club for that one.
I was thinking a subscription box where they get different seasonal beers depending on what time of year it is. What's cool about that too is there are already some huge YouTube beer channels.
Having those people, those brand ambassadors that have the kits in their house, when they get it, ask them to make a video making the beer, tasting it and whatnot. You have all this content that we keep sharing to the YouTube channel, to the Facebook group.
I feel it's a perfect thing that people are passionate about it. They enjoy that hobby. It’s getting a few people to start with that, the subscription box could grow big with that and be that recurring revenue.
There's an interesting one in print on demand subscription box for this market. I've seen two or three sites do this, which is on t-shirts. They'll go around to different breweries. They'll grab their designs. They'll partner with them. This month, it may be one or one to three different breweries.
They'll say, “Give us your logo” or whatever. They'll have a designer mock up a cool shirt. You're a part of this subscription box, but you get a t-shirt for the brewery of the month. For all, I know the brewery may be paying to be included with this because it's like advertising.
It's $16 a month and every month I'm getting a new brewery's logo. Granted there's probably a lot of ride-along with that. These are the number of people who are on this subscription. Let's send that out. I thought that was a pretty interesting way to throw continuity on there as well.
They bought an ad on Howard Stern. I heard an advertisement on the Howard Stern Show. It's the same company, same product. They must be making money. I'm sure that's not cheap. It’s that model where the bars or the breweries might be paying to have their logo on it.
They probably are. When I was thinking of this along with some other similar ideas was when I was thinking of the beauty box companies. The way that works is they ship a beauty box every month to all the women that are subscribed and they have little samples of products in them.
The products not only are free to the company, they usually pay to have theirs included so the customers will buy more of it. It's a beautiful business model where you can not only get free products but usually get paid to send your customers products.
As far as where it goes to sourcing stuff, let's say in the homebrew market, do you have any recommended shortcuts to find good homebrew suppliers? Once more, a lot of the times I'm going to find the companies that are selling this has been eCom sites as well.
Are there directories that you typically start off at or are there Google searches like homebrew supply plus wholesale or something like that?
Definitely, I would say no directories. When you're using Google, don't use the term dropshipping because that's when you're going to find middlemen and the companies that charge for access to products.
Any good supplier will never charge for access to products because the relationship is, “We're going to sell your products and we're all going to make money. What we do, if I was going to search for that, I would go on Google and I would type in whatever the specific products were.
Homebrew kits and I would look at websites that were selling homebrew kits. I would look to see what brand names made them. If they had an SKU number listed, I would look for that. I would google those brand names and those SKU numbers. I would try to find directly the companies that make them.
I'm at a stand up desk that's made by VARIDESK. I wouldn't want to look at AntonStandUpDesks.com. I would go to that website, see VARIDESK was sold there. I would go to the VARIDESK website. If I wanted private-labeled stand up desks, I would contact VARIDESK and say, “I'm looking to sell your products.
I'm calling from AntonStandUpDesks.com and in the scenario that we're talking about now, if you want it to go the private label dropship route, I would ask them if they did that.
If I wanted to sell it under VARIDESK, I would ask if they work with internet retailers and who I should speak to about getting approved to sell the products. I understand why if people want to dropship, they google dropshipping.
It's the worst term you can use if you want to build a real business with this model. The only reason my business is called Drop Ship Lifestyle so people could find us. We never use that term with any of our customers, any of our suppliers.
It's more like marketers who are using it. That was one of the things specifically with this market like a homebrew kit is usually a combination of a bucket, tube, something or other, some other gadget and also a doohickey. I always wonder if it's the store that’s bundling stuff together.
I got a bucket from this person, I got this from that person, let's bundle them all up together. That's some research that we need to do on that. The strategy here, also going to some of the competitors' websites.
A lot of times you can sort by bestselling items and say, “Show me anything above $200 is what you like to price.” Anything over $200 or maybe even $100 and up to where it's a good selling item.
It's like, “Let's add that stuff to our store. Let's add the essential stuff for getting started for things.” It’s beginner, intermediate and advanced. Start to find the supply for the ingredients. These people need barley. They need hops.
Especially at those different price points, the fact that you have a lot of organic traffic built into that site already. Your cost of acquisition is going to be lower. The fact that it sounds like there is going to be recurring built-in on it. That's something.
If the customer's there for free and you sold something at $100. With that $100-order, they had the option to add on $20 a month or whatever it is, subscription.
That's still great because you're not paying 10% of that to acquire the customer. There are definitely ways to get creative with pricing too. I use that as a general rule of thumb because more often than not, our traffic is mainly bought.
When you're sending to a landing page, are you sending it straight to a Shopify product page or are you creating standalone funnel style pages, whether it's in ClickFunnels or one of the other landing page builders like Funnel Buildr from Matt Stefanik or something like that?
They're all Shopify product pages. We do build them out a little bit, so they don't look like a basic copy and paste product page. We keep everything for our eCommerce in Shopify.
What're the most expensive products that you've either sold or have students have sold in dropship model $5,000, $1,000?
It was a long time ago, the biggest one, but it was over $8,000. It was like $8,300 or $8,600 or something like that. The biggest order I ever got, which a student beat me, was for $62,000 for a company that ordered 62 pieces of $1,000 item. That was a good one.
I had a student, he's still a student. A couple of years ago, he got an order for over $100,000 from a university that bought a ton of one of his products. They don't happen often. When they do, it's a good day.
What you mentioned were some almost business purchases versus an individual. Do you ever look for those industries where there is a bunch of business purchases going on?
Not specifically but we do call attention to it on our websites where if I was selling commercial wine refrigerators, I would assume that most likely it's going to be restaurants.
I would definitely have a tab visible on every page that said something like, “To the trade,” where if they went to that they would see examples of other businesses we've sold to. They would know that if they're buying in bulk, they will receive a volume discount.
It would have a phone number and an email like VIP@AntonsRestaurantStore.com or something. Those orders don't come in through on the website.
It's usually a conversation back and forth. They want to make a deposit and pay the balance when it gets there. We build pages that target those people, but we don't run traffic to those pages. They click there once they find our website and are seen if they want to buy from us or not.
Are you adding any one-click upsell funnel-style things into your Shopify using some of the apps that are out there or not?
We do like on our product pages. People can add things on. There are no elaborate funnels behind our products. A lot of what we do with our remarketing and trying to have people take different things is done via post-purchase emails.
After people buy from us, we are making offers in their actual B product delivery sequence. It's not straight after for the most part.
What about when you're looking and deciding which products to do? Are you trying to look for things that have repeat buyers more so than one-off sales?
It's not the most important. If we can get that, that's great. Typically, to give you an idea, most of our websites on any given day, 90% plus of the traffic is first-time visitors. A lot of the things are one-off purchases or something people will buy maybe every couple of years.
We don't have a lot of recurring and the majority of our stores are a lot of things that people keep coming back for. I've been doing this stuff for a while with eCommerce.
The whole lead value optimization thing where we promote info products to our audiences, where we promote other people's less expensive products to our audiences, we didn't start doing that until a few years ago.
It's made a big boost in our revenue and in profits because now we have other things that we can promote to our buyers. It used to be that they'd buy our thing and we didn't have anything to sell them for a while. Now we promote other people's stuff to them and we can increase that value.
Hopefully my audience is like, “I got to read this thing ten times,” but they don't because they can go to DropShipLifestyle.com. Let's give you a plug because this has been fantastic. Tell me about some of the resources that are available over at Drop Ship Lifestyle.
That's where we have our courses and whatnot and some different downloads. There's also a blog there. We've posted at least once a week for a few years now.
There's enough content to keep you busy for a while if you want to see if this is for you, get some more information on it. That's where everything that we published gets eventually linked to.
Is it courses? Is it coaching?
That's the main thing. The blog is there to keep people updated, share some new things we learned and what we're working on. We do have a course that won the Best eCommerce Course from Shopify. It's called Drop Ship Lifestyle. That was exciting.
I wasn't expecting it because I didn't know it was a thing because this was the first year they ever did it. That was a good phone call to get. Our main course takes people through the seven steps that we use every time we launch a store, starting with niche selection, market research to see if your idea is viable.
Web design so how to use Shopify, how to get approved with suppliers because this isn't like you don't pay to get approved, you don't use the directory, you have to find them and say the right things to them.
I help people with optimizing their website for conversions to make sure people buy when they get there. We have a whole module on traffic, how to use things like Google product listing ads.
How to do basic onsite SEO? How to form relationships with niche-related blogs and other people that can send you traffic? The final step of the course is all about automation.
How to use different apps, tools and even how to hire virtual assistants once you start making a bunch of money and don't want to be in your email all day. The whole process from A to Z of building a high-ticket dropship store.
I'm on your website. I went over to courses. I see the basic premium and done for you. Everybody likes a done for you.
For people that don't want to learn web design, they want to skip that module. We'll do it for them.If you can create continuity, your valuation when you go to sell your company is dramatically higher than doing one off sales. Click To Tweet
You'll set up the store. You'll find the suppliers for them and plug in all the stuff?
We help with all of that.
I already know the answer to this. Apps like Oberlo and other things that automatically go out and scrape the suppliers and stuff. Do you typically stay away from the automated stuff like that?
I know there are people making money using that. I'm not going to say it's a scam or anything like that. The thing is if anyone wants to think about it in the simplest way.
If you want to have a real business that is worth more in a year than it is now, that's still around in a year, that's still around in five years that you could have in ten years and maybe pass down to your children or flip for a lot of money.
It's not going to be a website that you clicked a few buttons, connected to an app and imported 100 products from China. That's not the answer.
If you're going to spend your time doing this, and by doing this, building a business, you might as well do it in something that has an opportunity. Not to make you real money, but to be lasting and something that benefits the customers and you.
Not a scam, not like they're ripping you off or anything, but it's not a long-term play at all.
I have a couple of other questions that came to mind. I've made acquisitions and I love doing exits. I like to make acquisitions in order to exit.
Have you done much in terms of buying somebody else's dropship site and/or selling a site once it's up and running? Which side of that have you got more experience on?
It's selling. I have bought, but I typically sell. The reason is that there are definitely some great opportunities to buy. You want to get into the industry that has an audience built in. That's a great example to buy.
What I see a lot of people making the mistake of doing is, “I want to start an eCommerce store.” They'll go on Flippa or something. Maybe there are some good sites on Flippa, but if you search for dropshipping stores, most of what you're going to find are these copy and paste templates.
All you have to do is set this up and get traffic and you can make money like that. That never works. For the acquisition side, unless it's going to be one of those deals where you have a built-in audience.
I typically try to see what everyone is doing and spend a ton of time, most of our time goes into market research.
It’s seeing who they're working with already, who their brand partners are, where they're getting their traffic from, and trying not to recreate it. See where there's a gap to make it better and do it ourselves. More often than not we build it and we sell it.
Do we see some good valuations on selling these sites when they're done well?
That's when they were done well. I'm sure you know this, but so everyone else knows it too. When they've been established for a couple of years and revenue is at least flat if not trending upwards. If you started a store a few months ago and it made $1,000, it's not worth $30,000 now.
In a lot of cases for somebody especially like yourself who's very skilled at starting one of these stores and getting them up and running. It doesn't make that much sense for you personally to go buy somebody else's dropshipping store because the costs are recreated is almost nil for you.
They would have to have something dramatically leaving on the table or in the case of what I did is I went out and I bought a trusted site that gets a ton of organic traffic. It has a decent-sized email list already.
For instance, eCommerce is one of the things they weren't doing. There was a lot of low-hanging fruit. I see that as being a good strategy for somebody in which they go out and they buy the audience elsewhere that isn't being served in this way.
They've gone through Drop Ship Lifestyle and they know how to do this, go by the audience and create the eCommerce aspect. You may be able to get that money back right away.
To build on that, we have a bunch of students that have bought different Amazon affiliate sites and they buy them. They're monetized only with Amazon. Instead of doing that, they swap out the affiliate links with actual products and start making a lot more than the default is 4%.
That's exactly one of the things behind ours is because it's a very robust blog. The biggest affiliate program we've got is Amazon. You're making peanuts.
I may sell $100,000 worth of stuff and make $3,000. It's a little bit frustrating. This has been phenomenal. This has been one of my favorite episodes because it's been so rapid-fire.
You've got answers for every single question. I know you've given me a lot of shortcuts and the learning curve of some things.
I was like, “This is some stuff I'm going to do. I need to plug in a couple of holes and find out people who are doing it differently.” I love the fact that you're doing the bigger ticket products.
I don't want to compete with the other people who are selling crap and impulse buys. This is a terrific model that people can go out on. Speaking to that, for anybody who's like, “I've never done eCommerce. I've never gotten this going.” What do you think people should budget?
Assuming they've bought your course so that doesn't have anything to do with it. Somebody has got now all the education they're wearing to go, how much should they have set aside to get this thing up tested, validated and get some momentum?
I know it sounds ridiculous, but a few $100 is more than enough. One of the beautiful things about this business is it doesn't cost a lot. That's not to say it doesn't take time. That's not to say it does not work, but your actual expenses, Shopify is $29 a month.
They give you a 21-day free trial. The domain name is $10 so you're at $39 two months into your business. Besides that, your costs are going to be advertising expenses and Google gives you $100 credit to start using Google Shopping.
It's not about money. It's more about being willing to put in the work that it takes to build it. A few $100, you're good for a while.
If Google Shopping starts to work, that $100. You spent $100. This is a ten to one return on ad spend is not impossible to get.
Not only that, we're not looking to do that in 30 days or in three months. We're looking to do that within a few days. Those expiring coupon codes, the fact that when people find us, they know they're going to buy from somewhere.
They're going to buy from us within a few days or they're not going to buy from us at all. You get the return on ad spend back quickly, assuming you do everything right. I don't want to make it sound too easy, but if you do it right, people buy sooner than later.
Is Google Shopping straightforward to figure out? I know there are some nuances to it.
It is. There are different strategies. You can't use straight up keywords, for example. You have to use negative keywords a lot and filter what you want traffic for by different ad group levels. There's some learning required, definitely a learning curve, but it's not impossible.
Do you either suggest or see that most of your students end up trying to learn all that in themselves or go out to a place and find a Google Shopping expert and pay them to help ramp it up?
Yeah, like almost any good Google Shopping expert take on a client unless they're already making some money with their store. Most of our students, we even tell them like, “Do it yourself. You don't have to be making six figures a month in sales but do it yourself.
Prove that your store is working, prove that everything is set up correctly, it's a good time to have that conversation. Most people get to whatever milestone they first want to hit on their own. Call it $10,000, $20,000, $30,000 a month, considering outsourcing it and those sales, not profit.
What is a nut you're trying to crack in your business or your life, whatever? By that, getting more people to be aware of Drop Ship Lifestyle so they can use that as a resource.
Is there anything specifically, either a person you're trying to meet, a skill you're trying to learn, something you're trying to figure out, a nut you're trying to crack. This is where I and my audience can potentially be valuable to you.
It's something I've been experimenting with and using for the past year or so building up a YouTube audience. I liked YouTube as a platform and our organic growth has been decent.
It's not where I want it to be. I'm looking to get the subscriber count way up and looking to put out more of the type of content that more people would engage with.
Our YouTube channel is YouTube.com/DropShipLifestyle. I had a goal of having over 100,000 subscribers by the end of the year. We're at 46,000 now, 45,000. I got some work to do on that. I could use some help on that.
I've got a couple of introductions I'll make on that. One of them is a guy named Aaron Biblo. Aaron is literally helping people with a specific thing on YouTube. He told me, “Yeah, I'll send you the bullet points of this.”
He goes, “We figured out how to make it so that almost immediately you can get your videos as the suggested video.” The one that usually auto plays right after on one of your competitor's channels, it's one of those things.
He goes, “It works like crazy.” His partner figured out this either algorithm or hack. It's a way that it's like, “This is valuable.” so that you can get on all different types of channels where it's the YouTube suggested video.
They've got an entire strategy around this. He sent me a text where I was like, “Put this down in bullet points in case I run across anybody who needs some YouTube help.” He goes, “I'll put together some bullet points for you regarding what it is, what it does, who it's for and pricing.”
If there's anybody out there reading this who also wants information, you can send an email to AskBrad@BaconWrappedBusiness.com. Put YouTube contact in there and I will forward that onto you as well. He's someone I can definitely recommend.
That's one of the nice parts about the show is you get to know the real stuff that's working as opposed to the other stuff. Hopefully, those two help you.
Anton, I've enjoyed this. You're offering a tremendous amount of service and I can already tell that you know what you're talking about. You're not BS-ing this stuff. You've been doing it for a while and helped a lot of people.
I recommend that every one of my audience go out and check out DropShipLifestyle.com. If you have any questions about it, send an email to AskBrad@BaconWrappedBusiness.com about anything. Do you have anything else to add, any parting thoughts from you?
I'll close it with one thing. We briefly hit Facebook ads before for these types of stores. Retargeting all the way, that's definitely the easiest way. Everyone should do that from day one.
If anyone does want to get into this whole higher ticket thing, don't try direct response ads to cold audiences with Facebook as you don't have a good chance of getting a good return on investment and it's not worth it.
You want those people that have intent already. Stay away from targeting cold audiences with $1,000 products and you'll be good to go.
With Facebook on these higher ticket products, you do retargeting?
Yes. The store is much more established and even then, what we're running traffic to is some type of buyers guide or some piece of content. That doesn't always work either. For most people I knew, I don't recommend it.
That's some of our experimental budgets. Sometimes it does great. It doesn't always make money. If you're starting out and can't lose anything, don't risk it on that. Don't start that.
Anton, this has been fantastic. I truly appreciate your time. For our audience, I hope you've enjoyed it as well. If you did get your lazy butt on to iTunes and send me a review, please.
I read every single one of them and I love to read them. It's one of the ways that you can let me know that this has impacted you.
You can also send me an email to AskBrad@BaconWrappedBusiness.com. Anton, thanks for joining me. For our audience, I'll see you on the next episizzle. Talk soon.
Anton Kraly is a serial entrepreneur with over 15 years of experience building online businesses, including Drop Ship Lifestyle.
Voted “Best eCommerce Course” by Shopify, Drop Ship Lifestyle was created to give students the knowledge and tools necessary to create freedom through entrepreneurship.
Listen closely as Brad asks a series of specific and actual questions that get to the heart of a successful dropshipping business.